How a British company is changing the Nevada race and sportsbook landscape
William Hill nets half billion in profit despite US losses
Despite its U.S. operations posting a “modest” loss, William Hill Plc. expects net revenue for 2012 to be 12 percent higher than in 2011. The British bookmaker is expected to release its official fourth-quarter and full-year earnings on March 1.
William Hill said Tuesday its 2012 performance had been “strong” with operating profit expected to be approximately $519.6 million, helped in part by a 27 percent boost in online net revenues and a six percent rise in retail earnings.
Its U.S. bookmaking business, which operates in Delaware and Nevada, was adversely affected by weak results, especially from the National Football League.
In a statement, William Hill said its Nevada acquisitions were successfully completed on schedule in September. The company warned that its performance in the U.S. “was impacted by weak sporting results, particularly the NFL in November, and as a result delivered a modest operating loss.”
William Hill spent $49 million to acquire American Wagering Inc. and Brandywine Bookmaking LLC in Las Vegas, as well as Club Cal Neva’s sports book operations in Northern Nevada. The company operates 160 sports books and kiosks in Nevada and employs 400 people.
William Hill determines the product offering, sets the odds and point spreads and manages the risk for the Delaware Lottery through a partnership with Scientific Games. Sports betting in Delaware is limited to wagers on NFL games only using parlay cards.- C.S.
Michael Ciasco was quickly considering whom to bet on in the third race at Tampa Downs.
It was Friday morning, and Ciasco, who has bet on horse racing almost every day since he arrived in Las Vegas 36 years ago, took his seat at William Hill’s sports book at Terrible’s.
Armed with a small coffee, a pencil and the Player’s Edition of the Daily Racing Form, Ciasco was ready for his day at the office.
“I come here around 9 a.m., have breakfast, bet until about 1 p.m. and then I go home,” Ciasco said. “I do it every day. I only bet dollars on each race and I’m only a horse player.”
Ciasco said he isn’t comfortable betting more than $3 or $4 dollars per race. That adds up to $18 or $19 a day, making Ciasco a cautious if not thrifty gambler.
“Money management in this town is very important,” he said. “I don’t have a system of my own, so I’m pretty much picking horses at random.”
Sports bettors all have their own reasons for why they might put anywhere from $5 to $50,000 on a game.
“It’s exciting,” said Kandace Allman. “I watch every minute and really get into the game when I have money on it. Sometimes, I yell at the TV telling them what they should be doing.”
Allman sounds like a lot of people you meet at Las Vegas sports books.
“I win a lot,” she said. “I like to bet on NBA and NFL games, but I’ve started (betting) on hockey and college games. I’m really into betting on the Oklahoma City Thunder.”
Allman also likes to put a few dollars on the Golden State Warriors, Los Angeles Clippers, and Detroit Pistons. Both Allman and her friend, Connie Martin, took the 4 points and the Baltimore Ravens to defeat the San Francisco 49ers in the Super Bowl on Sunday.
As of Thursday, the over-under on the game is 47.5 points.
“I can’t predict the future, but I like the Ravens,” Martin said.
While it might be a marginal addition to Nevada’s total gaming revenues, gambling on sports is big business. In 2011, casino visitors wagered more than $2.8 billion on sporting events, with sports books taking home $140.7 million, according to the Nevada Gaming Control Board.
“It’s mostly football,” said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. “Football has declined though and basketball is gaining in popularity. That’s because the NCAA is getting a lot more attention than it did years ago.”
Schwartz said $57.3 billion has been bet on sports in Nevada since 1984, with sports books winning $2.6 billion.
It’s been a profitable career for Joe Asher, a former attorney turned bookmaker.
Asher founded Brandywine Bookmaking LLC in 2008. His company operated Lucky’s Race and Sports Books at Terrible’s and 15 other sports books statewide, and set odds for the Delaware State Lottery’s parlay bets on NFL games.
Today, Asher is CEO of William Hill U.S. in Las Vegas, overseeing the company’s 160 sports books and kiosks, 400 employees and an oddsmaking business in Delaware. Brandywine, along with American Wagering Inc. and Club Cal Neva’s business in Northern Nevada were purchased in June for $49 million by British bookmaker William Hill Plc.
“Without question, it was the right thing to do,” Asher said. “Brandywine had grown pretty rapidly since its start (in 2008), and I was trying to think about where we go from here.”
Asher said originally he wasn’t interested in selling, but William Hill made him a $15.7 million offer he couldn’t refuse.
“I was looking for a strategic partner who would invest in the business to give us some additional capital,” he said. “But from William Hill’s perspective, they came up with the idea of buying the three companies and didn’t seem to have that much interest in making a minority investment.”
William Hill, a publicly traded company on the London Stock Exchange, is expecting its investment to yield results.
Neil Cooper, group finance director at William Hill in London, recently told analysts the company “expects earning enhancement” from its first full year in Nevada. On Wednesday, William Hill said the company’s U.S. business was in the red, “impacted by weak sporting results, particularly the NFL in November, and as a result delivered a modest operating loss.”
William Hill spent $10 million upgrading sports books statewide and expanding its mobile and product offerings. The company is also investing in upgrading mobile sports betting applications and expanding its kiosks statewide.
“Mobile and kiosks are so important to the future of this business in Nevada because (we) need to keep up with technology,” Asher said. “Customers also want the convenience.”
At Terrible’s, the sports book has been remodeled and features William Hill’s blue, yellow, white and gray color scheme, and a dozen new chairs in front of a wall of 10 televisions showing sports. It also has separate televisions and a section of betting carrels dedicated to horse racing, while 12 televisions posting and updating odds on everything from NBA and college basketball games to European soccer matches.
A TV is also dedicated to “Future Bets,” with Team USA a 5-2 favorite to win the 2013 World Baseball Classic in March.
Asher said William Hill will continue to invest in its U.S. business.
“Now that the Terrible’s sports book has been entirely redone, work is under way at Buffalo Bill’s (in Primm) as well,” Asher said. “We are in the final planning stages of upgrades to the Plaza in downtown Las Vegas.”
Contact reporter Chris Sieroty at email@example.com or 702-477-3893. Follow @sierotyfeatures on Twitter.
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