William Hill, Caesars failed £6 billion merger

William Hill and Caesars Entertainment held talks over a potential merger last autumn, it has been reported. A deal would have seen the US casino giant buy the British bookmaker to create a £6 billion gambling powerhouse.

A report in the Sunday Times claim that the two companies held detailed discussions about a cash-and-shares deal. However, discussions eventually ended due to price.

A number of British bookmakers have set their eyes on expansion in the USA, where the Supreme Court struck down last May a federal ban on sports betting, thus paving the way for the legalizstion of the practice in multiple states.

UK gambling operators are facing a massive crackdown on the highly controversial fixed-odds betting terminals and other regulatory pressures. On 1 April the UK Government implemented a reduction of the maximum bet on the gaming machines to just £2, previously £100. The move will hit operators’ profitability significantly and is widely-expected to see many betting shops close.

William Hill has been struggling with ailing profitability in recent times, and the FOBTs clampdown will only make things worse for the second largest chain of betting shops in the United Kingdom.

Shares have plummeted since the company announced a pre-tax loss of £722 million for 2018, down from a £146.5 million profit in the previous year.

Last year GVC Holdings purchased Ladbrokes Coral, the owner of the largest number of betting shops in the UK, in a deal worth more than £3 billion. Ladbrokes Coral itself was the result of a multi-billion merger between Ladbrokes and Gala Coral back in 2016. Two more large-scale deals took place that same year – GVC’s takeover of bwin.party digital entertainment, and the merger of Paddy Power and Betfair.

Earlier this year, William Hill purchased online gambling group Mr Green & co AB (MRG) for £242 million.