One of the largest bookmakers in the UK – William Hill – has warned that it expects lower full-year profits due to the crackdown imposed by the Government on fixed-odds betting terminals (FOBTs), as well as to the closure of a number of customer accounts to fight money laundering and problem gambling. According to the gambling operator, the tax increase and stricter regulatory regime imposed on high-street bookmakers were also some of the main reasons to blame for the lower results.
The company slashed its expectations for its full-year profit to between £225 million and £245 million, while analysts had projected an amount of £242.6 million. In comparison, William Hill posted an annual profit of £291.3 million in 2017.
According to the company’s estimates, the expected online profits in 2018 would be £20 million lower than initially expected, and £25 million down in 2019. The decline is due to William Hill’s decision to close some customer accounts in order to make sure such users are adequately protected against gambling-related harm. Another major reason for the decline is the increase which the UK Government decided to bring in the online operators’ gaming duty which is to rise from 15% to 21%.
The British bookmaker released a special trading update, revealing that this year’s World Cup had benefited the company’s results. On the other hand, William Hill saw three loss-making weeks on horse racing this summer, and some punters generated large winnings in football results in October.
The Chief Executive Officer of the company, Philip Bowcock, explained that the UK gambling industry is still going through some significant changes and some important game-changers have already been made over the last couple of years in order for the brand to transform its online gambling business, expand its management team and become more financially flexible ahead of major regulatory changes.
William Hill Set to Close Up to 900 Betting Shops in the UK
As mentioned above, William Hill blamed the stricter regime brought to local bookmakers by the UK Government and the new rules, forcing gambling operators to carry out more checks on users who bet online in order to prevent money laundering and help the competent authorities battle increasing gambling addiction rates.
Back in February 2018, William Hill suffered a massive financial blow after the UK Gambling Commission (UKGC) imposed it a £6.2-million fine due to failures to deal with illegal money laundering in the two years to August 2016. As a result of senior management and staff failures, ten online customers of the brand were able to make money deposits linked to criminal offences, so the gambling regulator punished the company.
The bookmaker further revealed that it plans to close up to 900 betting shops which have become unprofitable. This amount equals almost two-fifths of the total number of betting shops owned by the brand. The decision of William Hill came after the UK Government announced its decision to reduce the maximum betting limit allowed on fixed-odds betting machines from £100 to £2.