Joe Asher has been in the wagering business for more than 20 years. He was appointed CEO at William Hill US in 2012 and has been growing the company in Nevada since then. William Hill now operates more than 170 sports books in the state and offers a state-of-the-art mobile platform as well. May’s Supreme Court decision opens up an incredible amount of opportunity for William Hill in states that decide to legalize sports betting. Asher outlines what will attract his company to those states and why casinos should consider hiring William Hill or any other sports betting company to operate their sports books. He spoke with GGB Publisher Roger Gros at the William Hill offices in Las Vegas one week after the decision. To hear a full podcast of this interview where Asher discusses the “integrity” fee, the economics of sports books to casinos and more, visit GGBMagazine.com.
GGB: Were you surprised about the clarity and decisiveness of the Supreme Court decision?
Joe Asher: No, I wasn’t. I wasn’t surprised. I was in the courtroom in December when the case was argued, and obviously, anyone in the courtroom, on our side, had a pretty good feeling that day. But you never know. So, while I thought this was the most likely outcome, and that’s what we’ve been saying internally, you’re really reading tea leaves, and trying to determine votes by questions and the like. So, surprised, no. But obviously happy to read it.
What will be the immediate impact first on the industry, and then on your company?
Clearly, just about everybody in the industry is now focused on sports betting. Before the decision, it was one of those things that was a priority among a lot of other priorities that folks had. But now, it obviously went to the top of the pile. Folks that we’ve been having discussions with over the last couple of years were on the phone that day asking us what they needed to do now. So, it certainly crystallized attention, and people now will go forward and make the investments that are required to be made.
On our side, we’ve been doing a lot of work and spending a lot of money in anticipation of the ruling. Not because we were certain what the ruling was going to be, but because we felt we had to invest in order to be ready in the event of a positive ruling. But, clearly, there were some things that we were deferring, pending the outcome—long-term leases for additional office space, contracts with other operators, those types of things. Now we’re comfortable pulling the trigger on those sorts of things.
Now we’re looking at states considering legislation. It seems as though a lot of the politicians don’t have a realistic view of the business model for sports betting. Is that your impression?
Obviously some are more informed than others, clearly, as is the case with every issue. But it is so important to have a tax structure in place, and a regulatory environment in place, that is going to allow us to be competitive with the black market. If you look in Nevada, we pay the gross gaming tax, which caps out at 6.75 percent. And there’s a well-developed regulatory system.
Contrast that with Pennsylvania, where the bill that passed requires a sports book operator pay $10 million up front, for the privilege of then paying 36 percent at the state and local level. And of course, that’s in addition to quarter of a point of handle tax you pay to the federal government, which is about another 5 percent of revenue.
How in the world can the legal market possibly compete with all of the bookies, in Philly and Pittsburgh and other places? An illegal bookie can offer a 25 percent rebate on all your losses, and he’ll still have a 16 percentage point advantage over us. And he hasn’t paid the $10 million up front. He doesn’t have all these infrastructure costs that you see if you come to our office. He doesn’t have a compliance department. He’s not paying payroll tax. We really haven’t spent a whole lot of time in Pennsylvania, because of the tax issue. So, that is going be an absolute critical aspect of all of this.
What do you bring to the table when you go into a casino to run their sports book?
This is our little niche of the world. You know, I’ve been around the gaming industry my whole life, and if you want to talk to me about slot machines or table games or hotel rooms, I can have a very superficial conversation with you. But, if you want to talk about sports betting, that is the tiny little sliver of the world that we happen to know an awful lot about, and that’s where we focus our efforts.
For casino operators who have a whole bunch of other things on their plate, outsourcing it to William Hill is a great option. They’re going to have a better product; they’re going to make a lot more money because they’re not going to have all the costs associated with doing it. And it will be attractive to their customers. So, that’s really the proposition, and they can rest assured that they’re dealing with a company that is licensed and a known commodity, has good relationships with regulators, and is going to do things in the proper manner.