William Hill Sportsbook will be closing its doors in the not-so-distant future. Per Caesars’ Q1 Earnings Report, the expectation is that William Hill’s brand will be totally disbanded by the fall of this year. However, it is unlikely that this move will be ready for football season, according to CEO Tom Reeg. When asked about plans for the William Hill brand, Reeg said:
“We’re going to rebrand our books as Caesars, our app as Caesars Sports, and tie our business into our Caesars Rewards database.”
Caesars closed on its acquisition of William Hill on April 22, 2021, and now expects to rebrand within a year of completing the purchase. William Hill has a well-known brand in the United Kingdom, including hundreds of retail betting shops, but Caesars plans to sell that wing of the business. Clearly, the $3.7 billion purchase of William Hill will not be the end of the sports betting related M&A activity for Caesars Entertainment.
Caesars is taking a page out of the DraftKings Sportsbook marketing playbook — citing big spending on customer acquisition. Analyst Steve Wieczynski brought up that Caesars Entertainment had $100 million in free cash flow per month. When asked if this is a fair expected reinvest number, Reeg said that this could be a fair expectation.
Reeg said, “We understand that we’re going to need to invest in this business, both on the tech and the customer acquisition side.” He continued, “We are throwing off over $100 million a month of free cash flow to invest in this business as aggressively as we need to going forward.”
Caesars is preparing to join DraftKings as a major player in the customer acquisition phase of the sports betting business.
DraftKings, BetMGM, And Caesars Spending Big On Customer Acquisition
With Caesars expecting to drop big money on sports betting, they repeatedly mentioned the MGM model as something they want to replicate. Caesars is looking to build their brand loyalty, which they think is “bar none” the best in the industry.
With an already loyal brand, combined with the acquisition of William Hill’s clients, and big customer acquisition spending — Caesars is preparing to be huge players in the sports betting world. By bringing in William Hill’s clients, Caesars thinks their brand loyalty will only grow stronger.
DraftKings Sportsbook spent $300 million in marketing in Q3 last year alone. If Caesars’ projection of $100 million in market spend, per month is true — it would be outspending even DraftKings’ budget.
Today, Caesars updated their massive William Hill purchase by putting themselves in an arms race with BetMGM and DraftKings. Caesars did not give a goal market share number for its rebranded Caesars Sports platform. However, they want to be major players in the industry.