There is currently 1 person viewing this thread.
Bookmaker posts £820m loss and warns crackdown will have long-term consequences
William Hill blamed the government’s clampdown on (FOBTs) as it warned that up to 900 betting shops could close, putting 4,500 jobs at risk.
The bookmaker reported a loss of £820m in the first six months of the year, as the decision to slash maximum stakes on FOBTs from £100 to £2 forced it to record a £915m accounting charge. Stripping out the one-off cost, it made a £96m profit, down 13% on last year.
The bookmaker warned that the curbs on FOBTs, which the government described as a “social blight”, would reduce its high street revenues by up to 45%, rendering 38% of its shops unprofitable.
It predicted costs of up to £60,000 per shop closure, or more than £50m, with operating profits likely to decrease by up to £100m a year. Each bookmaker employs about five staff, meaning about 4,500 jobs are at risk if 900 shops close.
The gloomy prognosis sent shares in the bookmaker sliding, closing down more than 8% at 287p, the biggest faller on the FTSE 350 on Friday.
But William Hill said it had been encouraged by its nascent US operation, which has been growing fast since the supreme court overturned a longstanding ban on sports betting earlier this year.
With William Hill’s UK network of high street bookmakers set to shrink, its chief executive, Philip Bowcock, said the company’s US operation could surpass its domestic business. “In time, yes, depending on regulation, our US business could be bigger than the UK,” he said. “The US population is seven times that of the UK and they like to gamble more, I think. Gambling is seen as part of everyday life, you’re not a social pariah if you enjoy it.”
William Hill announced plans for further expansion in the US, where states are drawing up gambling regulations, mostly demanding that gambling firms do deals with casinos if they want to enter the market.
The firm has already struck sports betting deals with 11 casinos in Mississippi and one in West Virginia, giving it a presence in six states, with discussions taking place in 14 more.
Bowcock said he believed William Hill was better placed to conquer the US than rivals such as Ladbrokes’ owner GVC, which announced a tie-up with casino owner MGM Resorts earlier this week.
He refused to be drawn on whether certainty about FOBTs and US sports betting could trigger a consolidation in which William Hill becomes a buyer or a target, but admitted that “everybody is talking to everybody.
Ivor Jones, an analyst at broker Peel Hunt, said the company was seizing its US opportunity because it has to, with its UK retail business “on life support”. He said: “William Hill is one player among many which hope to profit from the US sports betting market as it develops.
“We forecast a period of intense and expensive competition as new states regulate and success with regulation [multiple states regulating quickly] will lead to a higher spike in competition and startup losses. It will be hard to know the right time to buy into William Hill’s US story, but we are sure this isn’t it.”
The company was fined £6.2m by the Gambling Commission in February for failing to protect customers and prevent money laundering.
It said it was restructuring its compliance functions and closing a number of customer accounts, which could affect its second-half performance. The regulator had found that 10 customers were able to deposit money linked to criminal offences.
William Hill blamed the government’s clampdown on (FOBTs) as it warned that up to 900 betting shops could close, putting 4,500 jobs at risk.
The bookmaker reported a loss of £820m in the first six months of the year, as the decision to slash maximum stakes on FOBTs from £100 to £2 forced it to record a £915m accounting charge. Stripping out the one-off cost, it made a £96m profit, down 13% on last year.
The bookmaker warned that the curbs on FOBTs, which the government described as a “social blight”, would reduce its high street revenues by up to 45%, rendering 38% of its shops unprofitable.
It predicted costs of up to £60,000 per shop closure, or more than £50m, with operating profits likely to decrease by up to £100m a year. Each bookmaker employs about five staff, meaning about 4,500 jobs are at risk if 900 shops close.
The gloomy prognosis sent shares in the bookmaker sliding, closing down more than 8% at 287p, the biggest faller on the FTSE 350 on Friday.
But William Hill said it had been encouraged by its nascent US operation, which has been growing fast since the supreme court overturned a longstanding ban on sports betting earlier this year.
With William Hill’s UK network of high street bookmakers set to shrink, its chief executive, Philip Bowcock, said the company’s US operation could surpass its domestic business. “In time, yes, depending on regulation, our US business could be bigger than the UK,” he said. “The US population is seven times that of the UK and they like to gamble more, I think. Gambling is seen as part of everyday life, you’re not a social pariah if you enjoy it.”
William Hill announced plans for further expansion in the US, where states are drawing up gambling regulations, mostly demanding that gambling firms do deals with casinos if they want to enter the market.
The firm has already struck sports betting deals with 11 casinos in Mississippi and one in West Virginia, giving it a presence in six states, with discussions taking place in 14 more.
Bowcock said he believed William Hill was better placed to conquer the US than rivals such as Ladbrokes’ owner GVC, which announced a tie-up with casino owner MGM Resorts earlier this week.
He refused to be drawn on whether certainty about FOBTs and US sports betting could trigger a consolidation in which William Hill becomes a buyer or a target, but admitted that “everybody is talking to everybody.
Ivor Jones, an analyst at broker Peel Hunt, said the company was seizing its US opportunity because it has to, with its UK retail business “on life support”. He said: “William Hill is one player among many which hope to profit from the US sports betting market as it develops.
“We forecast a period of intense and expensive competition as new states regulate and success with regulation [multiple states regulating quickly] will lead to a higher spike in competition and startup losses. It will be hard to know the right time to buy into William Hill’s US story, but we are sure this isn’t it.”
The company was fined £6.2m by the Gambling Commission in February for failing to protect customers and prevent money laundering.
It said it was restructuring its compliance functions and closing a number of customer accounts, which could affect its second-half performance. The regulator had found that 10 customers were able to deposit money linked to criminal offences.
sort by:
Show
per page
Replies: 138
|
By:
so they were talking a load of crap when they claimed they didnt open all these shops to get more machines on the high street
|
|
By:
All of which goes to prove indisputably they WH are no more than a bunch of useless one arm bandit peddlers who could not make a book on anything more complex than a ten "runner" cartoon race. William Hill must be spinning in his grave. Not a bookmaker in sight in senior "management".
|
|
By:
Absolutely, Gazo. One opened in my local High Street very close to Ladbrokes long established shop. Shut down within 2 years. Only people ever seen in it were the OAB saddos and a sour faced manageress whose job it was to refuse any horse bets from anyone with an IQ over 90.
|
|
By:
When 50%+ of turnover (reported in general for the shops) is machines and not actual betting, then the shops are not needed in the first place. Plenty of shops have opened solely to get machines in, and ALL of the firms have forgot what bookmaking is. Their business model was get punters addicted to the machines and not take on punters. Now that will be coming to an end they are f00ked, but they have brought it all on themselves.
Not good for the staff who will lose their jobs, but this is only happening due to the clueless top brass in their firms. It will be 1.01 none of them will be out of pocket either and if they do walk away it will be with a massive golden handshake and pension.... |
|
By:
as I posted yesterday lads corals over 1000 shops will be shutting
the truth is when gvc took over there did not want the shops omly online and the brand. have a good day regards Ronnie. |
|
By:
hope they close the lot they dont take bets anymore
|
|
By:
horse racing must be such a small part of their revenue streams these days and the government totally
over reacting with these stupid minimum amounts per spin, should of let this new generation of customers lose their money, just like the customers of the past who only bet on the horses/dogs/football ect. another dumb stupid decision by this government. |
|
By:
If millions of pounds are no longer pumped into machines then they will be spent elsewhere thus securing other jobs.
|
|
By:
You say that Ron but C/Lads have just spent a fair few bob on refurbishing the call centre.Not quite sure what is going on
 |
|
By:
Amount of money they spent trying to avoid the max per spin reduction gives a good indication of the panic at Billy's HQ.
|
|
By:
sounds like the boy who cried wolf imo
they are a business ffs, if they are unprofitable they close, if they are profitable they stay open bookies need to grow a pair imo & also stfu |
|
By:
Bowcock said betting shops were suffering with the rest of the high street, but that racing's performance was a concern.
He added they would wait for an announcement on a date for the implementation of a £2 stake before making a decision on shop closures, although they were looking at lease renewals as they came up. "We can't get over the fact there will be shop closures," he added. I can.  |
|
By:
Sica Dan 04 Aug 18 09:59 Joined: 06 Oct 00 | Topic/replies: 2,886 | Blogger: Sica Dan's blog If millions of pounds are no longer pumped into machines then they will be spent elsewhere thus securing other jobs. correct |
|
By:
Had my account closed down by these charlatans, wasn't even allowed access to my betting history for that day's accounts. They said they would send me the figures for that day...for a £10 administration charge!
|
|
By:
900 shops not enough,,,poor bookies
 |
|
By:
Good news , we need to replace them bookmakers shops with pound or charity shops imho
|
|
By:
Last time I was in one (Newmarket July meeting) I was blatantly lied to by a manager who was clearly embarrassed to be lying but he stood his ground,was only wanting to bet on a horse race which they'd fully priced up with the rest of the 'betting' fraternity but on the phone their traders insisted there were no prices for the shareholders will be scratching their heads.
|
|
By:
Bookmakers ? Casino Managers more like !
If they're having to close shops because of FOBTs then it proves they're only there to take money from hapless individuals addicted to playing the machines. In which case , close them, closedown the lot. Good riddance. FOBTs - the crack cocaine of betting. |
|
By:
Bad news for the high st...where can you go for a piss now?
|
|
By:
@Facts -- Bookmakers ? Casino Managers more like !
If they're having to close shops because of FOBTs then it proves they're only there to take money from hapless individuals addicted to playing the machines. Of course they are. And of course it is evil. And of course the forumites' fantasy over the years, that axing FOBTs will mean betting shops once again lay lumpy bets at standout prices, will be shown up as the wishful thinking it always was. |
|
By:
That's fine too Ramruma for me as long as they don't have it all ways.
|
|
By:
"The bookmaker reported a loss of £820m in the first six months of the year, as the decision to slash maximum stakes on FOBTs from £100 to £2 forced it to record a £915m accounting charge. Stripping out the one-off cost, it made a £96m profit, down 13% on last year".
Anyone understand their accounting?? The key point here is the drop in trading profit of 13%. The £915m hit presumably reflects projected future losses? To use their figures, shop closures is about 54m and operating profits will be down by 100m a year. What is the rest? Perhaps Mrs Hill doth protest too much. |
|
By:
Of course bookies will shut a lot of shops. I have two Coral betting shops within a mile of me. If anyone wants to place a bet with Corals either shop is easy to get to and have plenty of parking.
The only reason they have two within a mile of each other, is because of the 4 machine limit. Go into either and they're all taken. With the machine addicts gone they wont need the two shops. |
|
By:
Not only do they lock the toilets here in South East London but they have ultra violet lamps in the gents as well.
|
|
By:
blackbarn very creative accounting imho
|
|
By:
dealer - I can understand them taking a hit that offsets future losses, but I don't understand the number, unless they are milking the problem with the intention of making future accounts look better. Surely not
 |
|
By:
100%
|
|
By:
These accountants seem to be able to confuse most of us with terms such as "accounting charge" of £915 million. What on earth is that supposed to mean?
|
|
By:
It predicted costs of up to £60,000 per shop closure
dont get that figure either for turning the key, unless they are tied into a lot of long term leases. one things for sure any redundancies will be a minimum and they will just stop recruiting when people leave |
|
By:
It's about the same as what I charged Marty.
|
|
By:
^^
|
|
By:
£2 max per spin is coming in April 2020 !
A good eighteen months plus to form a new business model ! Phillip Bowcock ( < how apt ) talks a load of bo*locks ! |
|
By:
Hey Mr retail Bookmaker..
the internet is here ! FFS ! |
|
By:
Horse Racing, Football, Numbers & Sports Betting is enough....
controlling costs is the key ! Amen . |
|
By:
wimmins T20
|
|
By:
^ Forgot that Germaine .
|
|
By:
|
|
By:
 |