Analysts believe that better times are coming for British bookmaker William Hill after regulatory pressure in the UK has eaten into its profits, and that the company’s US expansion campaign could present an even better opportunity for its UK stocks than originally thought.
According to Jefferies analysts, William Hill’s shares could more than double as it enters more and more US states where sports betting is legal.
The investment bank believes that with more states legalizing the practice faster than what it had initially anticipated, the US opportunity for William Hill’s stocks is larger than previously thought.
The May 2018 ruling of the US Supreme Court that struck down a federal ban on sports betting caused what can easily be described as stampede that has so far been joined by more than a dozen of states and more are expected to follow suit this year.
Jefferies analysts think that legal sports betting creates a $5 billion profit opportunity in the US and that the legalization of online casino-style gaming in more and more states could be “the next logical step which will add another material opportunity.”
According to the investment bank, William Hill is “well-placed in the US” and that even with a modest 10% market share, its shares are worth 400p.
US Sports Media Deal Boosts Shares
The market reacted positively to a report by The Sunday Times that the London-listed gambling operator is close to inking a sports media deal with American broadcasting giant CBS Sports. William Hill shares went up 2.1% this morning to 176½p.
A partnership between William Hill and CBS Sports could provide the gambling operator with the opportunity to advertise its brand to an estimated 42 million people who visit CBS Sports’ website every month.
News about ongoing negotiations between the gambling operator and the broadcaster first emerged in January. But it was reported later that talks have fallen through. The Sunday Times reported over the weekend that the deal is now imminent. It is to be seen what the partnership between William Hill and CBS Sports will involve.
Prior the SCOTUS ruling from May 2018, William Hill operated sportsbooks in Nevada, the only state where sports betting was legal. The company has grown its estate in the Silver State over the years and now operates the largest sportsbooks chain there with betting facilities at a number of premium casinos in Las Vegas and the rest of the state.
In 2018, William Hill formed a partnership with Reno, Nevada-based casino operator Eldorado Resorts that enabled it to increase its presence across states where betting is legal and its partner runs casinos.
If a deal between William Hill and CBS Sports is indeed announced, the bookmaker will become the latest British operator to have joined forces with a US sports media group to spearhead its expansion in the nation’s sports betting field.
GVC Holdings and its US partner MGM Resorts International last year teamed up with Yahoo Sports. In addition, Flutter Entertainment will soon have an established partnership with FOX Sports through its recently announced merger with The Stars Group.