William Hill Forecasted to Exceed 2017 Profit Expectations

William Hill Forecasted to Exceed 2017 Profit Expectations

By Daniel Smyth | January 31st, 2018

A strong year both in the United Kingdom and the United Sates has seen bookmaker William Hill predict better than expected year-on-year profits. According to a trading statement released on January 15, 2018 the British betting company has forecast an 11% increase in year-on-year profit.

Although the final results for 2017 won’t be released until February 23, William Hill’s board is confident that higher than anticipated earnings will result in a full-year adjusted operating profit of £290 million for 2017.

Helping to improve the bottom line in 2017 was strong wins in the retail and online sectors during the nine weeks following its November 20, trading statement. As well as taking more money than expected in the lead-up to Christmas, the operator noted revenue was significantly higher than during the same period in 2016:

“We have delivered a strong result in 2017, reflecting our focus on rejuvenating online, growing the US and building an attractive omni-channel proposition. At the same time, we are continuously improving how we enable customers to gamble responsibly.”
Philip Bowcock, CEO of William Hill

Looking Forward to a Profitable Summer

In addition to a strong performance in 2017, William Hill executives are confident of another profitable summer in 2018. With World Cup betting fever predicted to generate a plethora of action across high street betting shops and online sites, William Hill stands to see healthy revenue.

According to a Market Watch report back in 2010, experts expected more than £3 billion to be wagered on that year’s World Cup in the UK alone. With sports betting, especially online, now more popular than ever, Bowcock is confident in his company’s ability to capitalise on football’s biggest event. Bowcock explained:

“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."

Changing Landscape Down Under

However, while the latest trading figures have proven positive, it may not be smooth sailing all of 2018. Continued action from the Australian government may mean that WH is forced to exit the market. Sports betting is worth AU$23 billion/£13 billion per annum in Australia, and the government is tightening its grip on online operators.

In addition to a blanket ban on free bets and bonuses, officials have also put a stop to in-play betting. In recent years, operators such as William Hill have been able to bypass local laws forbidding in-play wagers online by offering a phone service. However, with that system outlawed, remote operators have started to suffer.

What’s more, a new point of consumption tax also looks set to roll out across Australia throughout 2018. Although the levy will be subject to state-by-state approval, it could see operators paying 15% on a customer’s bets in regions where the tax system is in place. It was introduced in South Australia last year, with Western Australia, Queensland and Victoria following with similar measures.

Between this and the recent restrictions placed on operators, William Hill is now considering its position in the Australian market. A January statement to the London Stock Exchange read:

“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."

Looking to the US

Without a presence in Australia, William Hill’s overall profits would suffer. However, the potential revenue from the 2018 World Cup should help to offset this in the short term. Looking forward, the possible liberalisation of the US market could compensate for the break from Australia.

Although it’s far from a done deal, New Jersey Governor Chris Christie has garnered a wealth of support for his sports betting movement. By invoking a state’s right not to be commandeered into a federal law, Christie is hoping to negate the Professional and Amateur Sports Protection Act in New Jersey.

Should he succeed, other states could quickly follow and that in turn could give William Hill a network of new revenue streams. With a long-standing presence in Nevada (where sports betting is legal), William Hill looks likely to be able to move into any newly regulated US markets more quickly than its British competitors.

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