{"id":149622,"date":"2020-09-22T09:53:33","date_gmt":"2020-09-22T16:53:33","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=149622"},"modified":"2020-09-22T11:45:28","modified_gmt":"2020-09-22T18:45:28","slug":"caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/","title":{"rendered":"Caesars Offers ‘Transformational Value’, Sports Betting Spinoff Possible Before Year End"},"content":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) is likely in advanced talks with William Hill (OTC: WIMHY) on a joint venture that would see the operators spin off a combined online casinos and sports wagering business, perhaps as soon as this year, according to an analyst.<\/p>\n

\"Caesars
The sportsbook at Caesars Palace Las Vegas featuring William Hill branding. The two companies could be close to a major announcement on the fate of their sports wagering operations. (Image: Twitter)<\/figcaption><\/figure>\n

Roth Capital analyst David Bain says the two companies have been in talks for \u201csome time\u201d on a 50\/50 partnership that would combine Caesars’<\/a> iGaming and sports betting segments with William Hill USA. The Caesars Palace operator already owns 20 percent of the British bookmaker’s US operations.<\/p>\n

Checks cite negotiations for ownership structure\/splits are in advanced stages, with a mindset of a likely spin off before the end of this year,\u201d said Bain a note to clients. \u201cOf course, there are risks to the time line, including delays in the final throes of talks and overall market conditions.\u201d<\/p><\/blockquote>\n

The analyst adds that even if the transaction is pushed out to the first quarter of 2021, that time would still beat investor expectations and be a \u201ctransformational catalyst.\u201d<\/p>\n

Bain rates shares of Caesars \u201cbuy\u201d and has a $75 price target on the name, implying upside of about 33 percent from where it currently trades.<\/strong><\/p>\n

Unlocking Caesars’ Big Value<\/h2>\n

Talk of Caesars separating its online gaming and sports betting segments dates back more than a year. Soon after revealing a takeover offer for Caesars, then Eldorado Resorts CEO Tom Reeg noted a spin-off of those units was possible because markets didn’t fully appreciate those businesses, and such a move would unlock shareholder value.<\/p>\n

Reeg now runs the \u201cnew Caesars.\u201d On the combined company’s first earnings conference call last month, he said a decision<\/a> on the fate of the iGaming and sports wagering units could be announced before the end of 2020.<\/strong><\/p>\n

\n

This idea of a joint transaction with William Hill is gaining momentum for multiple reasons, including the UK-based company running all of Caesars’ domestic sportsbooks, it’s status as the third-largest player in the fast-growing US online sports wagering market, and the notion that the investment community doesn’t adequately value<\/a> William Hill’s US business.<\/p>\n<\/div>\n

Bain, the Roth Capital analyst, believes a separation of Caesars’ online casino and sports betting units is worth $38 a share, and internet gaming alone is compelling for investors because, in a more equal partnership, William Hill could profitably leverage the more than 65 million Caesars Rewards members, potentially converting some of them into online customers.<\/p>\n

Fantastic Earnings Forecast<\/h2>\n

Bain projects a total addressable market (TAM) of $9 billion for US sports betting and $4 billion for iGaming in 2025. The analyst acknowledges that market share and valuation discount assumptions for Caesars in these arenas relative to rival DraftKings (NASDAQ:DKNG) \u201ccould prove conservative.\u201d<\/p>\n

Excluding a spin-off, the analyst says Caesars stock is worth $73, citing better-than-expected business trends and strength in the company’s regional portfolio.<\/p>\n

\u201cWe forecast 3Q20 regional earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (<\/span><\/span>EBITDAR)<\/span> at $397 million versus consensus of $372 million, and Las Vegas at $66 million versus $76 million consensus,\u201d <\/strong>said Bain.<\/p>\n

He says Caesars’ ability to outperform peers in the current quarter is being driven by consistent customer demand and cost-cutting initiatives, as well as Total Rewards members driving Las Vegas occupancy rates higher compared to other Strip operators.<\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars Entertainment (NASDAQ:CZR) is likely in advanced talks with William Hill (OTC: WIMHY) on a joint venture that would see the operators spin off a combined online casinos and sports wagering business, perhaps as soon as this year, according to an analyst. Roth Capital analyst David Bain says the two companies have been in talks […]<\/p>\n","protected":false},"author":46,"featured_media":149624,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,32093],"tags":[],"acf":[],"yoast_head":"\nCaesars, William Hill Close to iGaming, Sports Spinoff, Says Analyst<\/title>\n<meta name=\"description\" content=\"Highly anticipated news of a Caesars\/William Hill joint venture and subsequent spinoff could arrive in the coming months.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Caesars, William Hill Close to iGaming, Sports Spinoff, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Highly anticipated news of a Caesars\/William Hill joint venture and subsequent spinoff could arrive in the coming months.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-09-22T16:53:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-09-22T18:45:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/09\/czr2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"801\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/\",\"name\":\"Caesars, William Hill Close to iGaming, Sports Spinoff, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/09\/czr2.jpg\",\"datePublished\":\"2020-09-22T16:53:33+00:00\",\"dateModified\":\"2020-09-22T18:45:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Highly anticipated news of a Caesars\/William Hill joint venture and subsequent spinoff could arrive in the coming months.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/caesars-william-hill-close-to-igaming-sports-spinoff-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/09\/czr2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/09\/czr2.jpg\",\"width\":1200,\"height\":801,\"caption\":\"The sportsbook at Caesars Palace Las Vegas featuring William Hill branding. 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