US sports betting expansion may boost William Hill shares

After regulatory pressure in the UK ate into its profitability, analysts predict better days for British bookmaker William Hill. They also predict that the company's US growth drive may offer its UK equities an even better opportunity than initially anticipated.

Analysts at Jefferies believe that as William Hill expands into more US states that allow sports betting, its stock price might more than double.

The investment bank thinks that the US market opportunity for William Hill's equities is more than initially anticipated because more states are legalizing the practice more quickly than it was initially expected.

More than a dozen states have already joined the stampede that was started by the US Supreme Court's May 2018 decision to overturn a federal ban on sports betting, and more are anticipated to follow suit this year.

The legalization of online casino-style gaming in increasingly more states may be "the next logical step which will add another meaningful potential," according to analysts at Jefferies, who estimate that legal sports betting offers a $5 billion profit possibility in the US.

The investment bank claims that William Hill is "well-positioned in the US" and that its shares are worth 400p even with a meager 10% market share.

Deal with US Sports Media Increases Shares

The Sunday Times' claim that the London-listed gambling operator is close to signing a sports media agreement with American broadcasting behemoth CBS Sports received a favorable response from the market. This morning, William Hill stock increased 2.1% to 17612p.

William Hill and CBS Sports might collaborate to allow the gaming company to promote its brand to the 42 million individuals who are thought to visit the CBS Sports website each month.

The first reports of ongoing negotiations between the broadcaster and the gaming operator surfaced in January. Later, though, it was revealed that the negotiations had broken down. The sale is apparently imminent, according to a weekend article in The Sunday Times. What the relationship between William Hill and CBS Sports will entail is currently unknown.

William Hill ran sportsbooks in Nevada, the only state where sports betting was permitted, before the SCOTUS decision from May 2018. With betting facilities at several upscale casinos in Las Vegas and throughout the Silver State, the firm has expanded its real estate there over the years and currently runs the state's largest sportsbooks chain.

With the help of a relationship it established with Eldorado Resorts, a casino operator based in Reno, Nevada, in 2018, William Hill was able to expand its footprint in areas where gambling is permitted and its partner has casinos.

If a partnership between William Hill and CBS Sports is confirmed, the bookmaker will become the most recent British operator to team up with a US sports media organization to drive its growth in the country's sports betting market.

Earlier this year, Yahoo Sports partnered with GVC Holdings and its US partner MGM Resorts International. In addition, thanks to its recently announced merger with The Stars Group, Flutter Entertainment will soon have a solid relationship with FOX Sports.