Bet365 partners Empire Resorts to enter $1bn New York market
Bet365 is looking for a major slice of the potential $1bn (£781.3m/€885.1m) New York betting market after signing up to a 20-year strategic partnership with Empire Resorts.
The long-term deal will see Hillside (New York), a subsidiary of Bet365, develop a physical and online sportsbook for Empire Resorts’ Resorts World Catskills venue, located near the Catskills mountain range (pictured), when sports betting is launched in the US’s fourth most populous state, likely to be next year. The online offering is set to be powered by bet365’s proprietary platform, and use the operator’s brand.
“Bet365’s global expertise in effectively developing and executing world-class sportsbooks strongly complements Empire’s leadership in commercial casino operations in New York," Empire Resorts excutive chairman Manny Pearlman explained.
“This collaboration, which will enable Resorts World Catskills to be a leading destination for sports wagering in New York State, highlights our commitment to the continued growth of Resorts World Catskills, as well as our dedication to working with the best, most innovative pioneers in the industry to provide world-class gaming options.”
Empire and Hillside (New York) will split profits from the venture evenly once Bet365 has recouped its start-up and other costs.
The Bet365 subsidiary will acquire up to $50m of Empire common stock in two tranches, at a price of $20 per share. This will see it become the business’ second-largest shareholder after Kien Huat Realty, a subsidiary of Malaysian conglomerate Genting Group, which currently holds a 88.7% stake.
Kien Huat Realty has committed to purchase up to $126m of convertible preferred stock, again at a purchase price of $20 per share. This new investment strengthens Empire Resorts’ financial position, and highlights the growth potential of the business, the operator said.
Bet365 has been slower than many of its peers to move into the US following the repeal of PASPA in May, having to date only signed a market access agreement with Hard Rock Atlantic City in New Jersey.
However, Hillside (New York) president Simon Betteley said the development with Empire lays down a marker for its US ambitions.
Betteley said: “This landmark agreement, which combines Empire’s gaming operating skill with our expertise in providing best-in-class online sports betting, allows Bet365 to tap into what we believe will be one of the most significant online and sportsbook markets in the US.”
Bet365 and Empire talked up the potential returns from the partnership by pointing to research which suggests New York's betting market could be worth more than $1bn in annual revenue within five years of legalisation.
Ryan Eller, president and CEO of Empire Resorts, told iGamingBusiness.com that the 20-year length of the deal is illustrative of the casino’s confidence in the potential of the New York betting market and its new partner.
“The intent of the alliance is to create lasting value by working together over the long term to capitalise on what is expected to be one of the largest sports betting markets in the US,” Eller said.
“The 20-year term, along with the multiple options to renew, provides for a long-term commercial alliance designed to survive the tests of time and achieve and maintain a leading position in New York’s sports betting market.”
Eller’s confidence was echoed by investors, with Empire’s share price rising around 50% following Wednesday afternoon’s announcement.
The state’s casinos are expected to be able to offer sports betting when New York State Gaming Commission confirms regulations for the industry. Resorts World Catskills, the casino resort located closest to Manhattan, is the last of the four licensed venues to sign a sports betting partner after deals were signed between Del Lago and DraftKings, Tioga Downs and FanDuel, and Rivers and Kambi.
Hillside (New York) has now closed its initial investment in Empire Resorts, holding 4.9% of Empire’s outstanding common stock.