According to William Hill’s H1 figures, the UK-based bookmaker has cited a regulatory clampdown in the UK and cost of its US expansion efforts as the main reasons behind a year-on-year drop in operating profit.
The company’s net revenue for the last six months ending 2 July 2019, amounted to £811.7m ($985m), up by 1% from the £802.9m generated the year prior.
In the US, William Hill’s Nevada operations generated £38.5m in revenue, up 4% on 2018’s revenue. William Hill’s wider US operations outside of Nevada generated £14.5m in revenue, up from £900,000.
Operating expenses in the US also saw an increase, from £495.4m to £547.9m. This shouldn’t come as a surprise to anyone as the bookmaker has continued its aggressive expansion into several US jurisdictions.
Highlights from the H1 report
Although William Hill’s US operation is still making a loss, the company has continued to reinvest all profits made into growing the business.
According to William Hill’s report, the company handled over $1bn in sports wagers in the US just in H1. Mobile wagers accounted for 67% of all the wagers placed in the first half of 2019.
Phillip Bowcock, William Hill’s Chief Executive said: “We continue to expand rapidly in the US, both in Nevada and in the new states, with over $1bn wagered with us in the first half. We are now live in eight states and will expand into at least two more states in H2.”
The report also shows that William Hill currently holds a market share of 27% in the US. This could increase in the coming months as both Indiana and Iowa are poised to launch sports betting in time for the start the football season.
Joe Asher, the William Hill’s US CEO, said: “Sports betting is starting to grow rapidly across many parts of the U.S. and that’s going to continue. Nearly a dozen states will have sports betting by year end and the trend towards legalization is clear.”
Trouble at home
Despite the promising outlook of the company’s US operations, the UK-based bookmaker is feeling the effects of a regulatory crackdown in its home country.
Last year, the UK government reduced the maximum stake on fixed-odds betting terminals (FOBTs) from £100 down to £2. As a result of this, many high street bookies have seen a dent in their revenues.
To help offset the financial losses of the FOBT stake cute, William Hill announced it will be closing down 700 of its UK betting shops.
Bowcock said: “In retail we took the tough decision to announce a consultation process over the proposed closure of around 700 shops to protect the long-term future of the business following the introduction of the £2 stake limit.”