William Hill Plc, a U.K. bookmaker with about 2,350 shops, is betting Nevada gamblers will want to wager on whether Sarah Palin will be the next U.S. president or on contenders in the television talent show “American Idol.”
The company, which agreed this year to buy Nevada-based sports-betting companies Brandywine Bookmaking LLC, American Wagering Inc. and Club Cal Neva, expects the Nevada Gaming Commission to grant it a gambling license before the November 2012 presidential election, Chief Executive Officer Ralph Topping said. The regulator approved non-sports betting in February on condition each subject is cleared in advance.
Topping, 59, said in an interview on June 29 in London that novelty wagers “wouldn’t be big bets. It’s small bets, it’s $1, $2-type bets.”
William Hill’s bigger aim is sports wagers, which are only legal in Delaware, Montana and Oregon, as well as in Nevada, where Brandywine estimates the three companies are present in 119 of 192 casinos that offer sports betting. Online gambling transactions are illegal in the U.S., though states such as California and New Jersey are considering allowing web-based betting for their own residents.
“Once we get the license, that makes us the USA’s biggest bookmaker, of the ones we know transacting legally,” Topping said. The London-based company estimates less than 1 percent of the $380 billion wagered annually in the U.S. on sports is done within the law, he said.
Prince Philip, Romney
In Britain, William Hill offered bets on whether Prince Philip would fall asleep at the April 29 wedding of his grandson, Prince William. The company is currently offering U.K. gamblers odds of 6-1 on Mitt Romney winning the presidential election and 28-1 on Palin. Barack Obama is favored to win at 4- 9 odds.
William Hill Online reported a 26 percent increase in first-quarter net revenue from a year earlier, with sportsbook revenue jumping 54 percent. Revenue at the company’s betting shops gained 8 percent.
The Nevada purchases won’t “move the dial” on earnings for William Hill until more states or the U.S. government approve sports betting, said Nicholas Batram, a London-based analyst at Peel Hunt LLP.
“If that doesn’t happen, they’ve still bought an interesting group of businesses,” said Batram, who has a “buy” recommendation on the company.
William Hill rose less than 1 percent to 230.6 pence at the 4:35 p.m. close in London today, valuing the company at about 1.62 billion pounds ($2.6 billion). The stock has gained 35 percent this year, the best performance on the FTSE 350 Travel & Leisure Index, which is down 4 percent.
Getting Nevada’s approval would help William Hill get clearance from other government regulators as it seeks to expand in Latin America and other parts of North America, said Topping. The 40-year company veteran, CEO since February 2008, is leading a strategy of adding business overseas and online.
William Hill would prefer to grow outside the U.K. through acquisitions, possibly by purchasing a land-based business with little or no Internet presence, Topping said.
“Every day of the week, we’re looking at acquisitions,” he said, declining to be specific. “That’s why you’ve got the dosh in the bank.”
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