William Hill to review profitability of Australian subsidiaries
News on 15 Jan 2018
News on 15 Jan 2018
In a trading update Monday morning online and land gambling group William Hill plc predicted that its FY 2017 operating profit should be up 11 percent vs. 2016 at around GBP 290 million, driven by growth in the UK and USA, stronger gross win margin and the benefits of its transformation programme.
But the part of the report that made the most headlines was the company’s note that tougher taxation and regulatory requirements in Australia has prompted it to undertake a review of operations by its subsidiaries in that country.
William Hill’s Aussie business faces a threat to profits from a federal government ban on bookmakers offering lines of credit as part of a major crackdown on problem gambling. That has been exacerbated by advertising and promotional restrictions, and at provincial level, the widening application of a 15 percent point-of-consumption tax based on GGR.
“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure and therefore we are undertaking a strategic review of our Australia business,” the William Hill trading update revealed.
The company said that the Australian business was affected by reduced credit betting volumes in the past nine weeks, but noted that overall retail and online gross wins were ahead of expectations and “significantly” ahead of the same period in 2016 thanks to favourable football and horseracing results.
Wagering growth rates slowed but group net revenue was “very strong”, the company reported, adding that gaming growth rates continued to accelerate in online operations but eased in retail. The United States delivered strong double-digit growth, the bookmaker revealed.
“We have delivered a strong result in 2017, reflecting our focus on rejuvenating online, growing the US and building an attractive omni-channel proposition,” said chief executive Phil Bowcock.
“We are excited about the opportunities ahead in 2018 – a World Cup year – with our competitive position reasserted in the UK and with the potential for sports betting to open up in the US.”
