Sportsbook giant William Hill (WIMHY) is looking to merge its U.S. gambling business with the online casino operations of Caesars Holdings (CZR).

A deal would bring together two betting organizations that are already closely aligned into a single entity that could potentially generate $700 million in annual revenue and provide a competitive challenge to industry leader DraftKings (DKNG 0.80%).

Casino chips and dice on laptop keyboard

Image source: Getty Images.

The odds favor a deal

Bloomberg reports William Hill just completed its acquisition of Cantor Fitzgerald's sports betting unit CG Technology and now has designs on Caesars business. The casino operator, which already owns 20% of the U.K.-based operator's sportsbook in the U.S., was recently acquired by Eldorado Resorts.

William Hill has run Eldorado's sportsbook exclusively since 2018, and anticipated the casino operator would acquire its rival.

William Hill CEO Joe Asher told Bloomberg, "We've been riding on their coattails as they've been growing. Clearly, we bet on the right horse."

Yet Caesars is amenable to the matchup, with CEO Tom Reeg quoted as saying in July the union would result in "gathering all our mobile assets, both sports and online. That would be ideal."

The merger could value the combined operations at around $7 billion. DraftKings is currently valued at $13.5 billion. While analysts believe it's possible Caesars could acquire William Hill, the betting money is on a publicly traded joint venture.

Following Eldorado's acquisition of Caesars, William Hill will be responsible for 170 locations in 13 states.