William Hill Blames Tax And Regulation Changes For Lower Profits In Coming Year
Blaming tax and regulation changes, William Hill announced on November 6 that they are expecting their 2018 profits to come in about £20 million lower than the previous year with another drop of £25 million forecasted for 2019. The gaming operator attributed a large portion of the financial downturn to the recent increase in the UK’s Remote Game Duty.
CEO Philip Bowcock said, “Adverse regulatory and tax changes will impact Online profit growth in 2018 and 2019, including enhanced customer due diligence processes and an increase in Remote Gaming Duty to 21%. The net effect in 2018 is expected to be lower given the offsetting positive impact of Online’s otherwise strong underlying performance, and from 2020 onwards the Online business is expected to return to strong operating profit growth.”
Paddy Power Betfair announced one week earlier that they expected to see their own profits fall by about £ 155 million per year because of increasing taxes and changing regulations around the globe.
Growth Is Steady, Even With Profits Down
Although overall profits are expected to fall over the coming year, William Hill is showing strong signs of steady growth.
The operator showed a 4% year to date increase in online net revenue compared to 2017. Gaming was up by 1% and their sportsbook revenue increased by 8% even though the amounts wagered there fell by 3%.
Bowcock was happy to share some other statistics as well, saying, “Our greater mass market focus is successfully driving new accounts growth, up 11% year to date. As expected average revenue per user is 19% lower, reflecting the more sustainable customer base we are building, with mass market actives up 28% year to date.”
Showing their commitment to this strategy, the company announced a recent offer of £242 million to acquire Swedish operator MRG (Mr Green) with the intention of geographically diversifying their business as well as further boosting online growth.
They’ve also been putting a lot of effort and attention into the sports betting market in the US during 2018. With the repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA) in May, several states have already legalised and regulated online sports betting with more to come over the next few years. William Hill is currently taking sports wagers in New Jersey, Mississippi, West Virginia, and Delaware.
Bowcock explained that the operator’s plans for the US casino market are only just beginning to get underway. “Our goal is to be in every state. Supported by the extensive experience of our US existing business in Nevada, we’re building a network of market access agreements, including our strategic partnership with Eldorado, expanding our relationship with Golden Entertainment and exclusively partnering with IGT for sports lottery opportunities,” he said.
Getting into more concrete developments, he added, “We’ve opened 18 new sports books and launched our initial mobile offering in New Jersey.
“We’re also progressing a new technology solution to go live in 2019, incorporating the newest elements of the Group’s existing platform and a bespoke player account management system from NeoGames, whose solution is more feature-rich than any sports betting platform currently live in the US.”