UK bookie William Hill has acquired the operations of Australian online bookie Tom Waterhouse (pictured far right) in a deal potentially worth as much as A$110m (US $100m). The agreement, announced in Melbourne on Friday, calls for Hills to pay A$34m upfront and assume $6m of Waterhouse debt, with up to A$70m more to be paid on a sliding scale depending on TomWaterhouse.com hitting earnings benchmarks of between A$10m and A$30m in the 12 months ending Dec. 31, 2015.
Rumors of the deal first surfaced early last month, following earlier rumors that Hills’ European rivals such as Ladbrokes and Bwin.party were also sniffing around young Tom’s property. The price is significantly less than earlier estimates had placed on Waterhouse’s operations, but that was before the brouhaha over Tom’s live-odds pimping on Aussie television, which led to the cancellation of Waterhouse’s sponsorship deal with the National Rugby League (NRL), although Waterhouse’s deals with Channel 9 NRL broadcasts and Channel 7 Racing were unaffected.
As part of the deal, Tom will stay on as managing director of TomWaterhouse.com and will also join William Hill Australia’s management team. In November, Waterhouse had brushed off suggestions he was looking to sell out, saying he preferred to keep his company under Australian ownership. But Tom claims to have found the “right strategic partner” in Hills, who not only bring “knowledge and support” but also “trust the local management to carry out the plan.”
Hills CEO Ralph Topping (pictured above left) issued a statement saying he was “delighted” with the deal, which further established Australia as Hills’ “second home.” Hills already has a significant Aussie presence following the acquisition in March of the Sportingbet and Centrebet brands and Topping said the acquisition “gives us a rapidly growing business that appeals to a wider customer base.” JPMorgan Cazenove analysts estimate Waterhouse’s site currently holds a 5% share of the country’s online sports betting market.
During his post-earnings call with analysts last week, Topping suggested brand consolidation plans were in the works for Hills’ sprawling Australian operations due to the “imperfections” in the various companies’ marketing programs. Topping shocked many with his revelation that the cost of acquiring an Australian customer was seven times the amount needed to secure a European customer. The addition of Waterhouse’s operations to the mix will likely add urgency to these consolidation moves, which could involve substantial employee redundancies.
XENOPHON DEMANDS BORDER FENCE
In a stunningly predictable response, Independent Sen. Nick Xenophon has found something about the gambling business he doesn’t like. Besides being annoyed by the fact that Waterhouse was “laughing all the way to the bank,” Xenophon felt a duty to warn Australians of the new evil plaguing the nation’s betting biz: foreign control. Between Hills, Paddy Power, Bet365 and Betfair, Xenophon says over 50% of the local online biz is now in the grimy grip of foreigners, which can only lead to “more and more Australians losing their shirts.” Xenophon has promised to to reintroduce legislation to ensure tighter national control of these Northern Territory-licensed online gambling sites.
A shirtless Xenophon would be a rare sight indeed, but the senator is prone to losing his temper over pretty much anything to do with gambling. This year alone, Xenophon has called for a ”suspension on sports betting in this country,” proposed legislation banning election wagering, praised a ban on live-odds promotion on television and accused free-play social casino apps of “grooming” children for a lifetime in gambling purgatory. Just so we’re clear on where he stands.
