Higher demand for online gaming and a major push in the US helped increase the October revenue for British bookmaker William Hill.
Finding its future online
The bookmaker believes that its future lies in its online business. Its UK business was hurt when the British government decided to lower the maximum stakes on fixed-odd betting machines (FOBTs). The amount went down from £100 pounds to £2 overnight, hurting the prospects of the company significantly. The operator had to shut down 700 shops owing to the new rules.
Its digital strategy got a bigger push when it appointed Ulrik Bengtsson, its digital headman, to the role of chief executive about two months ago. The results have also been in the company’s favor. For the 17 weeks ending October 29, the company’s net revenue in online business jumped by 26%. Though it’s retail like-for-like net revenue fell by 16% during this time, it managed to get a 60% uptick in net revenue from its US business.
A happy ending for the year?
The company suggests that it is in line with meetings its full-year adjusted operating profit expectations given in August. This means that the company could earn a profit of £50 million to £70 million by the end of the year.
The company’s US operations are also faring well. It is already running mobile betting apps in 10 US states. Note that 19 states in the US have legalized sports betting and opened up their gaming industries, allowing companies like William Hill to play in a larger, untapped market. On Thursday, the company announced that it has acquired CG Technology sportsbooks. This acquisition includes the Bahamas and Nevada operations of the company.
Back home in the UK, the gambling industry is facing significant challenges. The UK Gambling Commission (UKGC) is making stricter regulations for operators, while lawmakers are suggesting even tighter rules. Recently, an all-party parliamentary group gave several recommendations for the gambling sector. Their chief demand was to stop the use of credit cards on gambling websites. They also want to impose an FOBT-style minimum stake on online betting.
If the government approves these two demands, the British gambling sector will become very hard to operate in. William Hill’s expansion in the US market becomes more critical in light of this situation. Though the US market makes operators pass through a patchwork of state regulations, it is still providing a new world of opportunities that William Hill may need.