William Hill PLC, Britain’s largest bookmaker, was licensed to operate Thursday by the Nevada Gaming Commission, which unanimously supported its acquisition of three sports book companies.
William Hill last year agreed to pay $55 million for American Wagering Inc., which owns Leroy’s; Brandywine Bookmaking LLC, owner of Lucky’s, and Club Cal-Neva’s sports book business in Northern Nevada. The company will control 55 percent of the Nevada sports book market, less than 11 percent of total revenues and less than 1 percent of total gaming revenues.
“The plan is to consolidate the businesses to make it a financially viable business,” James Henderson, director of retail operations at William Hill, told the five-member commission.
The three race and sports book operations will be operated under the William Hill brand. Henderson said the company sees Nevada as an “entry point to other opportunities in the U.S.”
William Hill plans to spend $3 million in improvements before the start of the National Football League season in September. Henderson said the company has set aside $10 million to invest in its Nevada operations in the next 18 months.
Joe Asher was named CEO, and Vic Salerno will be chairman and chief technology officer of William Hill’s Nevada subsidiary, William Hill U.S. Holdco Inc.
The bookmaker posted $441 million in profits in 2011, with more than 90 percent of its business done through 2,370 betting shops in the United Kingdom. It has more than 1.4 million active online customers, and processes more than 1 million betting slips a day.
“We are U.K.-centric. Ninety-two percent of our revenue comes from the U.K.,” said Ralph Topping, CEO of William Hill. “We see the opportunity to expand to other regulated markets, and the U.S. is the most important and interesting to us.”
The publicly traded company operates in seven countries, including Italy and Spain.
Topping said the business has three divisions, the largest being a retail operation that controls 25 percent of bookmaking in Britain. He said the betting shops generated $1.3 billion in revenue and more than $300 million in earnings last year.
William Hill’s telephone business generated $29 million in revenue, while its online division, established in 2008, earned $500 million in revenue and $171 million in profits in 2011.
Nevada regulators questioned Topping and other executives about their partnership with Playtech Ltd. The Israeli software company was founded by Teddy Sagi, a Tel Aviv-born businessman convicted of fraud and bribery in 1996.
Commission Chairman Peter Bernhard asked about Sagi’s involvement in William Hill Online, a division that is being vetted for a Nevada gaming license.
Topping assured the commission Sagi is only a shareholder. William Hill owns 71 percent of the online business, while Playtech owns 29 percent. William Hill has the opportunity to buy out Playtech’s stake in December and again in 2014.
Thomas Murphy, William Hill’s chief counsel, reminded the commission that Playtech was a publicly traded company with dozens of owners. Topping described it as an “investment relationship.”
Commissioner Joseph Brown asked if Sagi’s shares will be bought out.
Topping said William Hill has been “looking at this issue,” but declined further comment.
Contact reporter Chris Sieroty at email@example.com or 702-477-3893.