The William Hill Company of Great Britain just completed a buying spree in Nevada that catapulted the company from zero to 60 in one month for U.S. operations. Chief Executive Ralph Topping announced in March that his 76-year-old company was acquiring American Wagering, led by gaming veteran Vic Salerno, its Leroy’s sports books and mobile technology, and the Northern Nevada outlets of Cal Neva Sports Books, led by Jeff Siri. One month later, Topping was back with the purchase of Joe Asher’s Brandywine Gaming and its Lucky’s sports books in Nevada, as well as participation in the Delaware sports books. Topping and the three leaders of the purchased companies met with Global Gaming Business Publisher Roger Gros at the Brandywine headquarters in Las Vegas in May to discuss the expanded company and what it means for legalized sports betting in the U.S. and beyond. To hear a podcast of the interview, with comments from the three other participants, visit www.ggbnews/podcasts.com.
GGB: Congratulations on your merger. Why did you begin to consider the U.S. for expansion?
Topping: We’ve been talking to these guys for a long period of time. We’re delighted that we have three quality organizations and management teams that are very good at what they do.
Many people said that the U.S. market was going to open up at some point. We didn’t see it, truthfully, but recently it began to change. I’ve always said if you’re going to enter a specific market, there are certain conditions you have to set, and one was that we wanted to be close to something that is in our William Hill makeup. We’re not a poker house. We don’t have casinos. We’re not a gaming company. We’re a good bunch of operators with a 76-year history in this betting business. We wanted to get into something close to what we know, and these transactions offered us that chance.
Sports betting in the U.S. grossed $2.7 billion last year, up a couple of percentage points over 2009. What does that figure tell you?
I think that’s tiny compared to what it could be and what is being wagered illegally. Sports fans are not shy when it comes to opinions. When you go to a bar in the U.S., it’s no different than a pub in the U.K. Everyone has an opinion on a sports match, whether it’s American football, soccer or college basketball. So people who love sports think nothing of putting down $10 or $20 backing their opinion on sports. I think that’s good and positive. The turnover is the tip of the iceberg.
By acquiring Brandywine, you are not only in the Nevada sports betting market, but also in Delaware.
That’s correct, and we feel very privileged to be able to assist the state of Delaware with gambling services in the future.
Some people consider online sports betting the “third rail” of online gambling. They say poker will be legalized first, maybe casino games second, but sports betting will take a long time. Is that because of the opposition of the sports leagues?
That sequence of events makes sense, but life can be strange. We’re bookmakers; we know that there’s no such thing as a certainty. Sports betting is pervasive. Take the NFL. Who would ever watch a game in the fourth quarter if it’s a blowout if you haven’t taken the over/under? If they really got what they wanted and every bookie was closed and every internet website were shut down, it would be a total disaster for the NFL. No one will watch; commercial revenue will decline.
I’d like to think that somewhere down the road there’s a conversation to be had with the major sports leagues about how to take a massive illegal, unregulated and untaxed business and turn it into a legal, regulated and taxed and profitable business for everyone.
The real damage that comes to sports comes through illegal wagering. If you look at India with the game of cricket, the risks caused by illegal operations are huge. It’s a free-for-all, and things can always go wrong.
In the U.S., legislators and regulators really need to see what’s going on, and not have the wool pulled over their eyes. We’ve been through it in the U.K. and betting is regulated, controlled and audited. Responsible people are running gambling responsibly.
What do you make of the online poker indictments that occurred in April?
I think you’re seeing a shakeout of the dot-com approach to betting to one that is controlled by states. It’s inevitable that you would have the U.S. authorities flexing their muscles, and it’s about time. We have always operated in regulated markets prior to the dot-com boom. We’re very comfortable operating in regulated markets and dealing with the various governments in states and territories. That’s our whole business model. As an organization, we have nothing to fear from regulators and governments. Only time will tell how the shakeout will develop.
What’s your U.S. strategy?
We’re really happy with the guys who run the businesses we’ve acquired. They know their businesses. I don’t. There’s not a lot we can teach these guys about their business but there’s a lot we can offer them in terms of a strong capital base and a willingness to invest in the businesses. We feel confident that we’ve got a management team from each of the three organizations and that when we meld it together, it will become an outstanding platform for growth in the Americas.
We’re positioned well to react to opportunities when they arise.