The UK's biggest bookmaker has seen profits melt away after it was hit by £44m of new gaming taxes.
William Hill said pre-tax profits fell by 35 per cent to £78.7m, on flat revenues of £808m. The No 1 UK operator also revealed that it had spent £16m buying 29.4 per cent of an online lottery firm operating in the US and in some European sectors.
William Hill said that buying Luxembourg-based Neo Games would take the firm into online lotteries, which are expanding rapidly in the US.
There are no plans for a UK product from NeoGames, which started with online scratch cards but increasingly runs lotteries for authorities, including four US states. William Hill has the option to buy the remaining 70.6 per cent stake after three or five years.
The gambling sector is facing tough new rules in its main UK market that have applied a 15 per cent tax to online gambling and new duties on fixed odds betting terminals in shops.
At the same time, the gaming sector is changing rapidly with many people preferring to use their mobile phones to place bets rather than going into high street betting shops.
The industry has responded to the changes by consolidating, with William Hill’s main rival Ladbrokes announcing a £2.3bn deal to buy Gala Coral last month.
James Henderson, the chief executive of William Hill, said that the company had no need to do a deal, but that it would look carefully at acquisitions if it could accelerate its growth. “We are very confident we are doing the right thing. If the opportunity presents itself [to do a deal], of course we will look at it, but right now we are ploughing our own furrow,” Mr Henderson said.
Earlier this year, William Hill tried unsuccessfully to buy online gaming group 888 Holdings, which is now itself battling rival GVC to buy betting group Bwin.party. 888 and Bwin agreed a £900m deal last week but GVC yesterday came back with a slightly higher offer which Bwin said it would evaluate.
William Hill is investing in improving its betting technology, particularly its mobile phone site.
The company has launched the gambling industry’s first technology incubator programme, which has attracted 240 applications from developers keen to work on projects for William Hill.
Eight successful applicants will be chosen in the next few weeks.
William Hill reported its worst ever week in January earlier this year, when a combination of results went in favour of gamblers. Mr Henderson said that there had been nothing similar since.Reuse content