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Britain’s Biggest Bookmaker Expands to US

Posted on April 21st, 2011

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William Hill, one of United Kingdom’s largest bookmakers has spread its wings out to the international scene. It has started to put into action its plan to be an international operation by acquiring two sports-betting firms in Nevada, the American Wagering Inc (AWI) and Cal Neva Sportsbook Division of Sierra Development Company. William Hill’s wager for the acquisition amounted to $39 million (£24 million).

The company is taking into advantage of the more tolerant approach of some states in the US on gambling. The company’s chief executive, Ralph Topping, revealed that they are on the lookout of acquiring further deals in various states in the United States. AWI is headed by Vic Salerno, a former dentist who ventured into gambling in 1978 while Cal Neva is owned by Steven Nightingale, a published poet and a veteran in sports wagering industry. “It’s the first time I ever sat down and talked business with a poet – sorry, sonneteer – and an ex-dentist,” Mr Topping said. The acquisition was more of a result of built relationship between the state and William Hill Executives.

Nevada is presently the biggest sports-betting market in the United States. The American Wagering Inc (AWI) and Cal Neva Sportsbook Division throws in 10 percent of all sports bets in the state. The gambling industry of Nevada generates annual revenue of $2.7 billion with a gross win of $151 million.
Introducing regulated betting has helped various states to increase their tax revenues for their local budgets. In 2009, when sports wagering was legalized in Delaware, it helped on to raise funds for the state’s $800 million budget deficit.

In contrary to sports gambling fate in the past few years where online sports betting were banned in the US and several UK online gambling companies were shut down, it is now taking the uphill climb as some states in the US are slowly being tolerant on the sports. Recently, the District of Columbia has expanded its state-run lottery business into online poker. The William Hill Company however, is not in a hurry to make sports betting in the US parallel to that in the UK as it would take 18 months to get licenses for the new acquisition. Nevertheless, they are heading for making more deals and acquisitions throughout the Americas for land-based sports betting. Online betting will follow but will move into a much slower pace.

To recall, in September 2006, an internet gambling ban was enforced in the US, the law prohibits banks and money institutions from accepting or paying funds to gambling sites such as internet poker, resulting to a shutdown of major online gambling operations in the US. At present though, a lot of Americans are engaged in online gambling. On April 15, 2011, three online poker companies were charged for violating the US laws that “prohibit the acceptance of any financial instrument in connection with unlawful Interne gambling, that is, Internet gambling that involves a “bet or wager” that is illegal under the laws of the state where the bet is made. The lawsuit alleges “that the companies used fraudulent methods to evade this law, for example, by disguising online gambling payments as purchases of merchandise, and by investing money in a local bank in return for the bank’s willingness to process online poker transactions. The companies argue that the poker is a game of skill rather than a game of chance, and therefore, online poker is not unlawful Internet gambling”

William Hill settles, for now, acquiring land-based sports betting. William Hill paid $9.4 million for AWI and $4 million for the company’s debt and $4.3 million in the form of a loan. AWI have 200 employees who work with 72 sportsbooks and Kiosks under the Leroy’s brand. Leroy’s business runs sportsbooks on behalf of various biggest casinos in Las Vegas. Likewise, William Hill paid $21 million for Cal Neva, with a total of 120 employees. This is just the start of William Hill’s plan to spread its operations outside the UK and be an international sports gambling company. Topping added that possible expansions into the Latin American territories is not far from reality.