Interview: Joe Asher CEO, William Hill US
Published 30th October 2015
It’s been just over three years since you received your license and begun integrating the businesses. What has been the most challenging aspect of building the unifi ed William Hill business in Nevada?
I don’t know there is anything I would single out, but there has been a substantial amount around of work around combining four companies together, three businesses that were acquired, plus William Hill. There was also an adjustment period, as you had people who were formerly competitors now working together, of integrating that into William Hill. I think there was also a period of adjustment around the cultural differences between American business and British business, the way business is conducted, that I, frankly, probably underestimated. I always had this view of American and the British that we had this war a couple of hundred years ago, but ever since then we’ve been best friends, with the special relationship. However, while we enjoy a common language, from a business perspective it’s quite different in several respects. We also moved into new office space, which was a big, important decision, and one I think was fundamentally important to the way things turned out, because it removed the issues that can arise from employees moving into an existing company’s space. The other thing worth mentioning is our moving away from the legacy issues of which employee worked for which company, as now half the people working for William Hill US did not work for one of the predecessor companies, so nobody thinks any more in terms of: “You worked for AWI, or you worked for Cal Neva or you worked for Brandywine”, whereas early on, that was something that was more relevant to people. Those are the types of issues we had to deal with as part of integrating four businesses, but the results show the team has done a good job in working through these.
What share of the overall Nevada sports betting business do you now hold, and how has this grown over the last three years?
In terms of the number of venues, I believe we have 104 locations, so we have around 55-60% of the market based on venues. In terms of share of win, we’ve gone from 12% of the market to 21%, so close to doubling our market share over the three years.
The Nevada business achieved strong growth last year, with amounts wagered up 21%, net revenue by 31% and operating profit by 98%. What would you pick out as the main factors driving this improvement?
Product, and technology, and I think also service and brand awareness. As far as the product is concerned, we have by far the deepest wagering menus offered in Nevada. In-play has gone from being miniscule to now about 20% of the handle. So the product side has expanded tremendously. And then, obviously, there’s been rapid growth in mobile, which is now roughly half of our handle. So, those are the big factors, along with the team doing a good job in remaining focused on customers, and on having an appealing offering. The mass growth in mobile has not in any way diminished the retail handle, so it’s been all incremental, because there has been no cannibalisation of retail handle. The system has evolved and grown to be able to handle it. The system today is far more resilient and reliable than it was three years ago. Now downtime is kept to a minimum and it’s continued to support higher and higher volumes of business.
You were poised last year to offer sports betting in NJ at Monmouth Park, only for the process to be put on hold by the injunction. How do you view the latest decision of the Appeals Court? Does this curtail the push for non-state sponsored sports betting?
The decision that came out earlier this week is very unusual. I think it’s fair to say it’s not over yet. The judge who wrote the opinion in the first case was the dissenting opinion this time. In effect, he said in his dissent: “No, this is exactly what we said they [New Jersey] could do.” I think there’s real confusion around the issue, so the next phase would be for the state to seek re-hearing before the entire Third Circuit, called a re-hearing en banc. Very few cases are heard en banc, but this would seem to be one that would have a pretty good chance of getting heard. So, I don’t think the show is quite over in the Third Circuit. There’s a little more to play out there. And then, clearly there’s going to be litigation in other parts of the country. The New Jersey decision applied to the Third Circuit, which is New Jersey, Delaware and Pennsylvania, but I think you will see litigation elsewhere, with the possibility of getting a different result from a different set of judges. So there will be continued activity in the courts. I am pretty comfortable with that. And then, clearly there’s going to be at some point an effort made in Congress to amend PASPA in light of the current realities. The sports leagues, the original proponents of PASPA, have obviously shifted their position led by Adam Silver and the NBA. And then of course you have the substantial attention that daily fantasy sports betting is receiving today. To me, I just don’t see how you can argue that one is OK, daily fantasy sports, but traditional sports betting is not. They are fundamentally the same thing. And yet you’ve got daily fantasy sports betting going on over the internet totally unregulated at the moment, and how is that sound policy? I think the daily fantasy evolution, the creation of daily fantasy sports betting, is certainly moving the conversation along in terms of the ultimate repeal or amendment of PASPA.
You’ve been publicly outspoken on the sports betting issue on occasions, once stating that you hoped Silver’s change of position signalled “a re-evaluation of a mindset that does not comport with 21st Century reality.” How do you as a company go about challenging the misconceptions and attitudes of the leagues and other opponents towards US regulated sports betting?
A lot of it is in done in the media, public relations campaigns pointing out everything that is happening, that despite the claims, daily fantasy sports betting is gambling. This whole idea because there’s skill involved it’s not, is a total smokescreen. There’s skill involved in a number of gambling games. Blackjack has skill involved, poker has skill involved, traditional sports betting has skill involved. There was a famous book written about a group of MIT students who won a lot of money playing blackjack. So the fact there’s skill, therefore it’s not gambling, is not a principle that I will ever agree to. I make my living in the gambling business, so I’m all for legal gambling. I think daily fantasy should be legal, just like traditional sports betting should be legal. Let’s not pretend one is OK, and the other’s not. I happen to believe that sports betting is best off when it’s properly regulated. I disagree with the view that daily fantasy sports were the biggest winner in the Third Circuit Case on Monday. The biggest winners were the illegal bookmakers, as now they don’t have legal competition. People are still betting with their bookmaker. So, in terms of trying to change attitudes, there’s a media/public relations component, and then there’s dialogue with the leagues. The NBA chief Adam Silver’s op-ed piece was obviously very well thought out. He didn’t just wake up on Tuesday morning and decide to write it. It was well-researched. I accept that one of the most important things for the sports leagues is protecting the integrity of the game. So who do you want helping you protect the integrity of the game? You are not going to get any help from the illegal bookmakers. The ones who are going to help you protect the integrity of the game are the legal bookmakers. That’s been the history in Nevada, it’s been the history in Europe, and who do you want working with you to protect the integrity of the game? Obviously there’s the political dialogue as well. We are on the board of the American Gaming Association. The AGA has created a sports betting task force, studying the issue. We are on the task force. I think those conversations have been useful and productive.
As well as your potential partnership with Monmouth Park in New Jersey, you are bookmaker to the Delaware Lottery. How do these presences in states other than Nevada play into your longerterm US strategy?
Our operations are currently confined to Nevada and Delaware. We are the number one bookmakers in Nevada, and our business is doing well. In Delaware, you can bet on NFL parlays through the lottery, and we are the risk manager for the lottery, and that’s a very important relationship for us. The Delaware business has grown substantially since it started in 2009. Then we have the deal with Monmouth Park. We have the rights to operate sports betting in Monmouth Park for a very long time, and our deal with Monmouth Park is that if sports betting is legal, we are going to run it for them. As a result of that relationship, we also sponsor the biggest race that they have, which is now called The William Hill Haskell Invitational. That was a big deal because American Pharoah made his first start in that race after winning the Triple Crown, which was very fortuitous for us, and we got great publicity and great value out of it. So, we’re doing what we can within the existing regulatory framework, and trying to position ourselves to be able to expand quickly when the opportunity arises.
The wider William Hill business obviously has huge expertise in other areas of online gaming. Why have you not looked to apply this in New Jersey, following the launch of iGaming there?
It was obviously something that we looked at and considered, and spent a fair time doing so, but decided for a variety of reasons to hold our fire and not do anything at this time. But I certainly wouldn’t rule it out. As you would expect with any business, we are always looking at opportunities, and at the end of the day, you decide to pool your assets and your time wherever you think you are going to get the best return.
“I think you will see litigation in other parts of the country, with the possibility of getting a different result from a different set of judges.”
“I think the daily fantasy evolution, the creation of daily fantasy sports betting, is moving the conversation along in terms of the ultimate repeal or amendment of PASPA.”
“I disagree with the view that daily fantasy sports were the biggest winner in the Third Circuit Case on Monday. The biggest winners were the illegal bookmakers, as now they don’t have legal competition.”