Australia’s sports-betting scene has shifted in appearance with the acquisition of William Hill Australia by Canada-based The Stars Group (TSG).
TSG announced the deal in required financial disclosures on 6 March, at the same time as it announced the furthered expansion of its majority stake in another Aussie sports-betting brand, CrownBet.
The cash-and-shares deal is valued at an aggregate US $315m. Of that, $234m is an all-cash payment for the William Hill Australia business.
The remaining $89m comes in the form of 3.1 million newly-created TSG shares, payable for the 18% interest in CrownBet also acquired by TSG in the deal. That bloc expands TSG’s ownership in CrownBet from 62% to 80%.
As a result of the William Hill Australia deal, TSG will acquire a customer base comprised of several former Australian brands.
William Hill was recently fined £6.2m by the UK Gambling Commission after it failed to employ anti-money laundering and social responsibility regulations.
Online Australian poker push?
William Hill acquired Sportingbet and tomwaterhouse.com back in 2013, also picking up Centrebet and another brand owned by Matthew Tripp, now the CEO of CrownBet.
All of those brands were previously merged into the William Hill Australia entity just acquired by TSG, with those brands’ customers migrated over to the William Hill Australia platform.
It was just a week prior that news broke regarding TSG’s acquisition of a majority stake in CrownBet, the online sports-betting arm of James Packer’s Crown Resorts empire.
Australian finance outlets noted TSG’s ownership of global online-poker market leader PokerStars, which along with all other regulated poker brands was forced from the Australian market about a year ago due to changes in Australia’s online gambling laws.
Those financial outlets have suggested that TSG’s investment in the Aussie sports-betting sphere is part of a push to re-legalize online poker – and PokerStars – in Australia. However, TSG itself is increasingly a multi-service operator, and its BetStars brand has grown prominently in Europe and elsewhere around the globe.
With its Australian sports-betting acquisitions to add to BetStars and its casino brands, 2018 may well be the year that online poker drops to less than half of TSG’s total global revenue.
Rafi Ashkenazi, Chief Executive Officer of TSG, said: “These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there.”
“With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
‘Leading market force’
Matthew Tripp, Chief Executive Officer of CrownBet, said: “I am excited to partner with The Stars Group.
“We believe the acquisition of the William Hill Australia business gives us the scale and customers to become a leading force in the market and the tools we will need to prepare for potential positive regulatory movement in other jurisdictions.”
Mr Tripp remains at the head of the CrownBet management team which will remain at the helm of the combined business, though TSG also acquired the rights to seat a majority of the combined entity’s board of directors.
A statement issued by TSG projects that the cost savings realized by combining the various brand’s entities into a single corporate entity will save as much as AUD $50m per year, following, of course, all the expenses associated with the transition.
CrownBet’s management team, including Mr Tripp, also picks up some bonus compensation and performance incentives for continuing to do a good job.
According to TSG: “The management team of CrownBet will be entitled to an additional payment of up to approximately $182m in 2020 subject to certain performance conditions and payable in cash and/or additional common shares at TSG’s discretion.”
All of the transactions remain subject to approval in multiple jurisdictions, though no unusual difficulties are expected and the firms involved expect the deals to be finalized by April.
All of the sports-betting brands involved are regulated by Australia’s Northern Territory Racing Board. Since TSG is based in Toronto, Canada, the deal must also be approved by both Australia’s Foreign Investment Review Board and Canada’s own Toronto Stock Exchange, where TSG is actively traded.