William Hill Profits Suffer FOBT Change and US Expansion Costs
- Profits for William Hill decline by 12% following UK tax increase and US expansion costs
- Net revenue for the first half of 2019 up by just 1%
- Chief executive of the brand gave praise to the business and pointed out that they are still following their five year plan
The United Kingdom’s bookmaker giant William Hill is seeing a steady year-to-year decline lately, as they just revealed a 12% slump on their profits. The brand has cited their expansion in the United States and the recent crackdown on fixed-odds betting terminals (FOBTs) as the foremost reasons for this turn of events.
Despitethe resolve the chief executive of the brand, Philip Bowcock, remained optimistic and shared his perspective on the newly acquired clarity on the direction of the enterprise.
The Year So Far in Numbers
The six months up to July 2nd saw the bookmaker raise profits by 1% at £811.7 million, as compared to those from the first half of 2018, which stood at £802.9 million. This was attributed primarily to retail, which remains the foremost source of income for the brand and its recent acquisition of MRG – operator of the brand Mr. Green – proved to be a wise choice. Retail net revenue went up by 14% in comparison to last year and amounts to £367.3 million, which makes for 45% of the total revenue of the enterprise for the period in question.
Sportsbook revenue saw a 7% decline to £152.4 million and the April change in the UK rules on FOBTs also contributes to what may look like a bleak future perspective. However, gaming revenue rose by 37% at £214.9m and international business provided a strong backbone for the operation, spiking some 66% to £122.4m.
While prior to the implementation of the new rules on FOBS users could wager up to £100 at a betting terminal, now this amount has been limited to £2. Nonetheless, the bookmaker has already taken measures in light of the change, which – according to plans revealed just last month – entail the closing down of some 700 shops throughout the UK.
Promises West
The other main reason, cited for the results of the William Hill report, is the brand’s expansion on the US market. Seeing how last year the US government softened its positions on sports betting and online gambling, the only natural thing for a business to do is to go where business is.
Chief executive of William Hill, Phillip Bowcock, said “We continue to expand rapidly in the US, both in Nevada and in the new states, with over $1 billion wagered with us in the first half. We are now live in eight states and will expand into at least two more states in H2.” He went on to explain that William Hill is committed to responsible gambling and that despite everything the business is still following what was laid out in their five-year plan, revealed just last year.
Revenue from Nevada operations, alone, saw a rice of 4% at £38.5m, while the other operations of the brand, spread across the states, surged from £900,000 to £14.5 million. Of which William Hill US contributed 7% of the entire revenue for the first half.
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