William Hill has well-established foundations in the US and is moving quickly to capitalise on the opportunities presented by newly-regulating states.
Our history in the US, starting in Nevada
William Hill became the leading sports betting operator in the US in 2012, when we merged three businesses based in Nevada to form William Hill US. By the end of 2018 we had grown to reach a market share of 32% in terms of revenues and 57% by number of outlets. We now have sports books in about 115 of the total of 190 casinos across Nevada, in addition to offering mobile betting via an app. We continue to focus on expanding our product range including in-play opportunities, developing the mobile app and redeveloping the sports books, which are all branded William Hill.
The US market
The US market has been transformed by the decision of the US Supreme Court in May 2018 to overturn the Professional and Amateur Sports Protection Act (PASPA). Since 1992 this federal law had effectively banned sports betting except in four states, principally Nevada. The Supreme Court's decision opened the door for each state to decide for itself whether to legalise and regulate sports betting. Several states moved to allow sports betting by the end of 2018, others have followed in 2019 and there are potentially up to 27 states due to go live in the first three years.1
The US opportunity has the potential to be truly transformative for the gambling industry worldwide. It is too early to forecast precisely, but Americans' appetite for sports betting is clear: Americans watched 2.2 trillion minutes of sports and 11,000 live sports events were aired last year, dwarfing the UK on a per capita and absolute basis.2 Recent independent market estimates of future total US sports betting revenues range from $5bn to $19bn by 2023.3
Gaining access to new markets
Market access will be crucial as the US opens up to sports betting on a state-by-state basis. States can choose to permit remote registration, a model similar to what we have in the UK, where accounts can be opened online without visiting licensed premises. An example of this model is New Jersey. Alternatively states can permit sports betting only at licensed retail premises, as is the situation in Mississippi. A third option is to allow mobile sports betting but only where accounts have been opened in person at licensed premises. This is the system of registration, sometimes referred to as “tethered mobile”, used in Nevada and expected to be used in Iowa until 2021. There are further variations possible on these models, such as in states that run sports betting partially or entirely through the state regulated lottery. William Hill intends to offer sports betting as far as possible in all states that permit it, adapting its model to fit the regulatory demands in each state. Following its partnership deals with Eldorado Resorts, Golden Entertainment and IGT it initially secured access to 17 states and where potential further states are likely to regulate we will look to find ways to gain market access there.
Following the PASPA decision, Delaware became the first state to take advantage of the ruling. They had been one of the few states to offer a sports betting product under PASPA, but this was only accumulator betting; in June 2018 for the first time Delaware began offering a full sports betting service, working in partnership with Scientific Games and the state lottery, and with William Hill as exclusive risk manager.
Rapidly following Delaware came New Jersey, the state that successfully challenged PASPA and where William Hill had already constructed a purpose built sports book at Monmouth Park. The facility, which was established following an agreement back in 2013, began taking the first legal sports bets in the state on the morning of 14 June. We have since opened an additional sports book in the Ocean Resort Casino in Atlantic City, bringing sports betting to the resort in southern New Jersey with a 7,500 square foot sports book in the heart of Ocean’s gaming floor. We also opened a sports book at the Tropicana casino in Atlantic City under our partnership with Eldorado, and in September 2018 we launched an app to enable mobile betting across New Jersey.
Mississippi, West Virginia, Pennsylvania and Rhode Island also all regulated in 2018, bringing the total number of states that had legalised and regulated sports betting to seven by the end of 2018. William Hill is currently live in each of those seven states, and has plans to launch in other states in 2019. New Mexico, Indiana, Iowa, Montana and Tennessee have passed legislation and are expected to put in place regulations that allow their first in-state sports bets in 2019.
Building our brand profile outside Nevada
Over the years since the William Hill brand launched in Nevada in 2012 it has grown to become the leading sports betting brand across the state.
In states that follow a retail-based model, it is expected that retail presence and expertise combined with operational capability and relatively modest marketing investment will all contribute to supporting a strong competitive offering.
However, in states that allow mobile sports betting accounts to be opened remotely, as in New Jersey, significant investment is expected to be required in marketing to build brand awareness and compete effectively. William Hill is recognised as a dedicated sports betting brand and began marketing in the first months after mobile betting was first allowed in New Jersey, which led to brand awareness growing rapidly. Marketing in the US Expansion states is delivered by our new US marketing team based at our New Jersey digital hub. Marketing as well as promotional work, including with sports organisations, is expected to be a key factor in customer acquisition and retention. Recent official sponsorship deals include those with the New Jersey Devils ice hockey team and the NHL.
Delivering operational excellence
William Hill has experience operating business-to-consumer, business-to-business and business-to-government models in the US, so we are well placed to work in a variety of locations with different partners to deliver sustained growth in our sports betting business in the US. We have a US leadership and operational team that understands the US market, that we continue to invest in, and that has a long track record of success in Nevada.
We are investing in a new proprietary technology platform to support the scalability of the US business. The aim is to deliver a technology stack that will be market leading across US sports betting, supporting efficient entry into new states, future product innovation and high levels of operational performance. This technology will be flexible to suit different operating models, and enable us to adapt to state by state requirements for the US market tailoring our offering to each specific market.