Ready for a Caesars makeover
Last month, Caesars Entertainment completed its long-awaited acquisition of William Hill in a deal worth around $4bn. Tom Reeg, CEO of Caesars Entertainment, has this week shed some light on the operator’s plans following that takeover.
the online offering will go by the name Caesars Sports
Speaking with investors during the company’s Q1 earnings conference call on Wednesday, Reeg confirmed plans for a complete rebrand of William Hill’s retail and online sports betting operations. The company’s brick-and-mortar sportsbooks will take the name Caesars, while the online offering will go by the name Caesars Sports.
Caesars intends to complete the rebrand before the launch of the new NFL season in September, according to the CEO. Once the company has rebranded its sportsbooks to Caesars, it intends to merge both its apps on William Hill’s platform with a single wallet solution. Reeg also said that the sports betting business will tie into the Caesars Reward database.
High ambitions in sports betting
Reeg detailed various other aspects to the William Hill takeover during Wednesday’s conference call, expressing confidence in the company’s chances of sports betting success.
$100m in free cash flow currently generated by Caesars each month
Sharing plans for betting expansion, the chief executive described a “great correlation” between spend and market share. He pointed to the $100m in free cash flow currently generated by Caesars each month, some of which will go towards sports betting expansion in multiple states.
Reeg also noted the benefits of existing content deals with various sports organizations and media companies. He said Caesars will utilize these agreements, such as its partnership with the NFL signed last month, to further its goals in US sports betting.
Prepared to offload non-US assets
Upon receiving Nevada approval for the William Hill acquisition in March, Reeg described Caesars as a “domestic company”, affirming the operator’s commitment to US sports betting. As a result, the chief executive outlined plans to sell William Hill’s international assets once the deal reached completion.
During Wednesday’s conference call, Reeg confirmed that the company will go ahead with those plans in the next two months. The casino giant will search for a suitable buyer over the rest of the year with the intention to close a deal within 12 months. Caesars expects to raise an estimated $2bn through the sales.
I can deploy that capital into business that I know will drive better returns to shareholders.”
Explaining the decision to sell, Reeg told investors that Caesars’ strength does not lie within non-US digital business. “I can tell you that there are almost certainly people out there that will do it better than us and see opportunity there,” he said. “And I can deploy that capital into business that I know will drive better returns to shareholders.”
Vegas casino sale to go ahead
It’s not just William Hill’s assets that could go up for sale. Since completing its $17.3bn merger with Eldorado Resorts in July 2020, Caesars officials have backed plans to sell one of the operator’s eight casinos on the Las Vegas Strip. On Wednesday, Reeg confirmed that the operator still intends to follow through on this.
The CEO suggested that the sale could go ahead at some point next year, but explained that the company intends to wait until the market rebounds following the COVID-19 pandemic. He said: “We remain convinced that it does not make sense for us to market an asset until we can market it off the cash flow that we’re doing with it, not off a bridge to what we think we can do with it.”