Hot Features
Premium
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
888 will face multiple challenges as it looks into acquiring William Hill’s operations outside the U.S. Read on about the proposed UK gambling changes.
888 Holdings Plc. shareholders saw their share prices rise by nearly 25 percent in April 2022 when 888 announced that it was acquiring William Hill for a lesser price than what it had earlier agreed to. 888 were set to pay around £2.2 billion which was agreed to in 2021 to acquire William Hill’s operations outside the United States.
In April 2022, 888 announced that it was now going to acquire William Hill for around £2.05bn or under which caused the shares to spike. The main reason for this drop in price was due to the changes in gaming regulations as well as macroeconomic changes. The UK Gambling Commission (UKGC) which is the gaming regulator in the UK announced that it was looking into William Hill’s license details after it found that the operator had provided incorrect data.
Caesars which is selling William Hill to 888 offered to pay out a max of £150mn to 888 as an indemnity based on the UKGC review.
UK Gambling Laws Could See Significant Changes
The UK is currently in the process of making a significant overhaul to its archaic 2005 Gaming Act which has come under fire for not being robust enough to protect UK players from gambling harm.
A Special Commission has spent months reviewing the existing gaming regulations, studying the current market conditions and taking feedback from stakeholders to make changes to gaming regulation. A whitepaper of the proposed changes was set to be published earlier this year but has once again been delayed due to multiple circumstances.
According to Bloomberg, impending inflation and a forecast of increased interest rates have eroded people’s inclination to take risks. Meanwhile, the UK government’s policy document revision (which is expected to be announced in a matter of days) is expected to shake things up in the betting industry. Considered to be one of the biggest reforms in the past decade and a half, a number of benchmarks, which include:
- a maximum stake between £2 and £5, for online casinos
- more scrupulous checks on customers’ income levels
- ban on free bets, 50 free spins casino bonuses and VIP packages for players battling problem gambling
The above-mentioned restrictions are but a few of the recommended measures announced by Culture secretary Nadine Dorries.
Gambling Regulatory Changes Will Be Further Delayed
The UK is also going through a political upheaval as PM Boris Johnson resigned in early July after more than 50 ministers put in their resignation calling for the PM to step down. The flurry of resignations also included members from the Department for Digital, Culture, Media and Sport who had a role to play in getting the whitepaper published on the 2005 Gaming Act review.
The whitepaper is likely to be further delayed until the political situation in the UK gets more stabilized. Also impacting the 888-William Hill deal will be the financial part.
Banks Now Finding It Difficult To Finance 888 Bond Deal
888 and William Hill are two of the biggest gambling brands in the UK market and an acquisition of this size always comes with its set of challenges. The latest challenge that 888 is facing in completing a successful acquisition is over the banks finding it difficult to finance the 888 bond deal.
JPMorgan and Morgan Stanley are two of the main bank that are leading the loan backing and £1bn bond deal. The banks usually underwrite the debt and later will sell the debt to specialist funds. The top banks have recently incurred significant losses on debt sales and we will have to wait and see how things play out with the 888-William Hill acquisition.
