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The Stars Group And William Hill U.S. Could Expect Strong Revenue Bumps During Virus Crisis

Mar. 10, 2020 11:22 AM ETThe Stars Group Inc. (TSG), WIMHY12 Comments


  • It's early days but one thing is clear: The virus contagion could produce "shut-in" gambling bursts to online platforms globally. TSG and William Hill are two companies to watch.
  • Flutter's acquisition of 55% of TSG won't close until late this year: Could a new bidder show up with a bigger premium?
  • Both TSG and William Hill have a strong existing footprint in the US regional gaming space.
  • Looking for a portfolio of ideas like this one? Members of The House Edge get exclusive access to our model portfolio. Get started today »

Theory of the investment: Online gaming platforms will see volume bumps during duration of coronavirus outbreak.

The Stars Group Inc. (NASDAQ:NASDAQ:TSG) and William Hill US (OTC:OTCPK:WIMHY) online gambling platforms are poised for strong quarters ahead in the teeth of the ongoing coronavirus epidemic. Both companies are the logical home of gamblers scared off by regular visits to casinos during the crisis. If the spate of current cancellations of public events, shows and the massive hit to travel-related companies continues, the logical move will be to bet online or open new accounts online. Either way, these two leaders in the online space have a story for investors now. Note below that TSG is holding near the Flutter buy in premium and not impacted by virus fears.

The American Gaming Association research shows that 124m Americans were expected to visit a casino during 2020, an estimated 20% spike from 2019. That number represents roughly 49% of the adult US population. Of this number, Las Vegas alone was expected to welcome more than 42 million visitors. These forecasts clearly will be dramatically impacted by the severity and duration of the spreading virus threat. At this point there's no reliable answer to the most burning of all questions: How long and how deep will the virus dominate global health and economics? Until the answers become clearer, we will continue to see draconian precautions mount in all businesses which live and breathe on places of public gathering. The specter looms of pro sports games being played before empty arenas, deserted movie theaters, cancelled concerts and cruise ships sitting in ports, along with empty casino floors. (Below: The AGA's sports betting map. Up to 20 states possible in next two years. Source:AGA)

For casual seekers of gaming entertainment, staying home poses little disruption of

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This article was written by

Howard Jay Klein profile picture

Howard Jay Klein has 30 years of experience as an executive and consultant in major casino operations. His background includes: Ballys, Trump Taj Mahal, Mohegan Sun, and Caesars Palace in Las Vegas. He is a value investor first, using management quality to inform his investment ideas. Howard is the leader of the investing group The House Edge where he shares actionable research for investing in the casino and entertainment industries.

Features of include: actionable analysis on gaming companies, news and interpretation for the latest trends in gaming, a regular newsletter, buy-sell-hold or accumulate recommendations, chat. Learn More.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (12)

Howard how long can William Hill stay in business with out revenue? do you see private equity coming in to help?
William Hill

Wasn't posted here but happened day before the article came out.


Billionaire brothers Fred and Peter Done, who co-founded bookmaker Betfred in 1967, announced on Monday that they have purchased a 3.03% stake in rival betting operator William Hill.

According to some analysts, the fact that the Done brothers bought a stake in William Hill through Betfred’s main retail subsidiary (Done Brothers (Cash Betting) Limited) could be a precursor to a potential offer by Betfred to acquire William Hill’s betting shops chain.

The Betfred spokesperson declined to comment on whether the Done brothers might be interested in acquiring some of William Hill’s business or the entire company.
Added massively on 80 GBX. That price is an insult. Likely to triple in three years.
The cancellation of sports globally is a BIG hit to all bookie operations. No clear visibility though I believe this temporary dip in business can be advantageous to those starting positions now. You may have caught the bottom.
does a Blackstone or someone else not buy them out?
Howard, At the current price you are getting Hill USA for free. How
stocks321 profile picture
Howard, as always, I enjoyed reading your article. I own ERI at an average price of $52.50. When it was almost $70 two or 3 weeks ago, I almost sold, but didn’t. Can you please comment on if you feel ERI will get back towards $70 level or at least mid $50’s level this year (or, as soon as this virus goes away —which will be soon, hopefully). Thank you in advance.
Actionable Conclusion profile picture
Are you planning trips to the casino anytime soon?

Hanging out at the slots with the cig smokers and the re-circulated air... mmmm sounds like a good way to spend the day... or not...
Howard Jay Klein profile picture
Hill USA HAS A ROSY FUTURE AS LONG AS STATES CONTINUE THE RAPID FIRE LEGALIZATION OF SPORTS BETTING. At some point downstream I think an IPO makes great sense. We'd have to see at least two years of net profit first.
William Hill USA
to the author. why wouldn't William Hill just spin off it's us division into an ipo. Also isn't a take over candidate?
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