William Hill still losing money over problem gambling precautions
News on 17 Jun 2016
News on 17 Jun 2016
The spectre of lost business as a consequence of stringent problem gambling precautions has again arisen at the online and land gambling group William Hill plc, whose shares hit a three-year low Thursday on fears that the measures have put long-term earnings at risk.
Our readers will recall that in March this year William Hill warned that it was experiencing significant financial losses as a result of automatic self-exclusions and timeouts, which were introduced late last year.
After studying the problem, Investec Securities says that around 2,500 customers per week have been locked out of their accounts, each of whom had been losing three to four times more than the GBP 800 lifetime value of the average William Hill punter.
The investment bank forecast that the gambling group would lose GBP 12.7 million in revenue this year from self-exclusions, which last for an average of 3.5 years, and another GBP 15.4 million from automatic timeouts lasting between a day and a month.
The company has set its FY 2016 guidance low enough to achieve, but the cumulative effect of self-exclusions means that 2017 earnings forecasts look too high unless rates subside, said Investec.
