Caesars Acquires William Hill and Inherits 24.5% NeoGames Stake

Caesars Entertainment continues to make its mark in the online gambling sector, as it has recently confirmed the acquisition of William Hill, and it got a stake in the iLottery provider called NeoGames. Caesars Entertainment announced that it now owns 24.5% of the NeoGames’ shares, which translates to 6.12 million shares of the company.

The most recent closing price of NeoGames stands at $42.18, so it means that the total interest Caesars has in the company is worth a stunning $258.44 million, so it is a solid part of the $3.69 billion that Caesars spent to acquire William Hill.

NeoGames is a company that went public just last November, and it was up a stunning 42.64% in June.

What is next for NeoGames?

Usually, in a takeover like this, the purchasing company comes as a so-called activist investor when acquiring the other company. Those types of companies (usually some institutional investors) have a set-out plan to bring big changes aboard, such as spin-offs, selling off businesses that fall behind, and so on.

The SEC document Caesars provided shows with no intention of them being an activist investor in NeoGames, so any major changes can be definitely written out. Caesars runs sportsbooks, online casinos, and the like, it is not a company that is presented as a corporate raider.

NeoGames is seen as a company that has massive potential for an even bigger rise of Caesars. They provide lottery services to tons of players in the US territory and is the only operator of their kind in the country. At the moment, NeoGames has a strong presence in North Carolina, New Hampshire, Virginia, and it is also in the process of getting iLottery contracts in Alaska, Connecticut, Maryland, Missouri, Ohio, Oregon, as well as Massachusetts.

Besides the US, NeoGames can be found offering their services in Canada, as well as some countries in Europe, so the global reach of the company is stunning, to say the least.

This may not mean that an acquisition is in place

Have in mind that it doesn’t necessarily mean that a takeover will happen, just because Caesars owns a share in NeoGames. It may prove to be the case, but not imminently. It can be expected that in the long-term future we might see a takeover by Caesars.

At the moment, there are other priorities that dominate Caesars’ agenda. They have just purchased William Hill, and the first steps they will make go towards auctioning the international operations of the company, as well as structuring the cost-efficient strategy they promised upon the merger, during which they announced that a “new Caesars” has been created.

On top of it, the online casino is focused on the expansion of their iGaming and sportsbook products, as it has announced that they will spend more than $1 billion in the next few years, which will make them among the industry leaders if everything goes to plan.

So, for now, it seems unlikely that Caesars will acquire the majority of NeoGames’ share, but even if the potential takeover does not happen in the future, one thing is clear – Caesars is the company that will benefit as the shares in NeoGames continue to rise.