William Hill expands into online lotteries market with £16m investment
William Hill has acquired 29.4% of online lottery software and services provider, NeoGames for $25m (around £16m).
The Group, which employs around 3000 staff in Yorkshire, has an option to buy the remaining shares after 3 or 5 years.
"The emergent online Lottery market is an exciting new opportunity in the gambling sector and NeoGames is a disruptive technology operator offering customers a great experience and lottery rights holders a compelling alternative to established retail lottery operators,” explained James Henderson, chief executive officer of William Hill.
“This agreement gives William Hill good optionality in a new market that is increasingly attractive to gambling customers."
Neogames is primarily focused on the USA. Founded in 2005 it developed its online scratch card business into a full range of online lottery products and services to ten lotteries worldwide.
The shareholding will mean that William Hill can nominate 2 representatives to the NeoGames Board. It has also agreed to fund a $15m working capital facility if required.
"We are excited by this strategic investment and partnership with William Hill which, apart from being a strong vote of confidence in our company and future expansion plans by one of the leading players in the gambling world, also opens up promising areas for synergies between our companies in the online lottery market, bringing William Hill's expertise and excellence in areas such as sports betting and omni-channel growth,” added Ilan Rosen, chief executive of NeoGames.
William Hill also announced its interim results today. The Group was hit by an additional £44m in gambling duties, following tax changes to online betting and fixed-odds betting terminals. Pre-tax profit was down 35% year-on-year to £78.7m.