The British gambling operator William Hill has asked the landlords of its premises to cut the company’s rents value by half in order to help it offset the negative impact of the upcoming crackdown on fixed-odds betting terminals (FOBTs).
As first revealed by Property Week, William Hill sent an open letter addressed to about 2,000 landlords, asking them to reduce their rents with immediate effect, in order to help the gambling giant avoid the closure of up to 900 of its betting shops. For the time being, the betting operator has about 2,300 betting outlets on the territory of the UK.
As explained by the company, the planned change in the existing regulations will equal a significant cost increase for a large number of its betting shops. At the same time, revenues are expected to decline by more than 50% in many cases.
After a lengthy process of research and consideration over the controversial machines which have been responsible for the provision about 50% of the bookmakers’ retail betting shops revenues, the UK Government finally decided to slash the maximum betting stake allowed from £100 to £2. The new rules regarding the fixed-odds betting terminals are to be enacted at the beginning of April.
FOBT Crackdown to Hit Hard William Hill’s Performance
As mentioned above, the upcoming legislative changes in terms of FOBTs have forced William Hill to ask its landlords for help in order for the company to be able to keep its positions as a leading high-street gambling operator in the UK. According to the gambling giant, a rent reduction would help its high-street betting outlets maintain their viability and high-quality customer service.
The company once again raised a red flag that the reduction of the machine’s maximum stake could seriously hurt its performance, so the open letter sent to its landlords has come as part of its efforts to offset the negative impact of the UK Government’s crackdown on the industry.
If the gambling operator’s landlords agree to the request, the rent reductions will be backdated to March 25th.
William Hill has not been the first gambling operator that has sought rent reductions from its landlords to deal with the upcoming measure that is to hit its brick-and-mortar operations. Other gambling companies have also warned that their performance would be affected by the crackdown, as well as by the rising popularity of the online gambling sector.
For some time, the larger gambling companies have managed to remain partially unaffected by the massive shift to online gambling thanks to the large revenue generated by their fixed-odds betting terminals. FOBTs have been a highly-profitable part of the business but their maximum stake is set to be seriously cut from £100 to £2 under the new policy of the UK Government – a step that is expected to cause a disruption in the company’s performance.