British bookmaker William Hill (Hills) has formally exited the Australian market with the sale of its struggling sports betting division to online sports betting operator CrownBet Holdings Pty Ltd.
The Financial Times reported Hills has agreed to sell its Aussie business to a unit of CrownBet for an equity value of AUD313.7 million (US$243.65 million), while the enterprise value is around AUD300 million ($233.09 million).
The deal comes a week after The Stars Group announced that it had acquired a 62 percent stake in CrownBet from Australian casino operator Crown Resorts for US$117.7 million. The Stars Group announced Tuesday that it has since increased its CrownBet stake to 80%. Combined with the Hills’ acquisition, the aggregate purchase price for both deals is US$315 million.
CrownBet now becomes the third largest sportsbook in Australia, just behind Tabcorp and Paddy Power Betfair’s local brand Sportsbet.
In January, Hills put its Australian business under review as the costs linked to running the division become increasingly onerous.
The UK-listed firm pointed out that doing business in Australia became tougher after state governments decided to impose new levies on gambling revenue—one that mimic the UK’s point of consumption tax—in addition to the passage of new national restrictions on credit betting and in-play wagering.
Hills’ Aussie division had FY17 turnover of AUD2.55 billion ($1.98 billion), revenue of AUD201 million ($156.17 million), and an operating profit of just under AUD30 million ($23.31 million).
Initially, four companies—CrownBet, Ladbrokes, Bet365, and Sportsbet—had expressed interest in buying Hills’ unit in Australia, which serves around 284,000 customers and made up 7 percent of the British bookmaker’s total revenue.
The competition for Hills’ assets was whittled down to a rivalry between CrownBet and SportsBet last Thursday. Both companies were given confidential information about Hill’s Australian operation.
CrownBet will now have to deal with a rebuke from its Northern Territory-based regulatr for the potentially “systemic” failures of the Hills’ unit to comply with responsible gambling regulations, according to The Sydney Morning Herald.
The complaint against Hills was brought to the Northern Territory Racing Commission just before the company announced the unit sale. An unnamed problem gambler accused Hills of allowing him to re-open one of his accounts and place more bets despite his decision to be self-excluded.
“It appears that there were a number of failures on behalf of the bookmaker to adequately discharge their responsibilities,” said Andrew Maloney, the racing commission’s presiding member, according to the news outlet. “Having failed once may be contributed to human error, however, to fail again, and in the similar circumstances, raises questions to the combination of errors being systemic.”