William Hill is hit by regulatory and tax changes

Betting giant William Hill today revealed that regulatory and tax changes hit its online growth and amid ongoing tough conditions for its high street betting shops.

William Hill has provided a trading update. Photo: John Stillwell/PA Wire
William Hill has provided a trading update. Photo: John Stillwell/PA Wire

Shares fell 5% after the group said full-year operating profit is now expected to be in the range of £225 million to £245 million.

It reported underlying operating profits of £291.3 million for 2017.

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William Hill said regulatory and tax changes would reduce online profits by £20 million in 2018 and a further £25 million in 2019.

But it said net effect would be helped by an otherwise strong underlying performance in online gambling - with accounts up 11% in the year to date - and the division set to return to robust earnings growth from 2020 onwards.

It was also knocked by weaker football and racing results, including three loss-making weeks on horseracing during the summer and customer-friendly football results during the international break in October.

This offset a boost from the later stages of the World Cup in the second half of its financial year.

Chief executive Philip Bowcock said: “Looking at the second-half performance so far, we have benefited from the later stages of the World Cup but otherwise football and racing margins have been weaker than expected.”

He added: “Retail continues to be challenged by the wider high street conditions and we have seen gaming as well as sportsbook revenues decline in the period.”

The company reported a 5% fall in online net revenues in the second half so far, while retail sales were down 4%.

In the overall year to date, there was a 4% rise in online net revenues for the 43 weeks to October 23, while retail net revenues fell 4%.

William Hill is among gambling firms set to be hit by the Government’s crackdown on fixed-odds betting terminals, limiting the maximum stake to just £2 from £100, which will take effect in October next year.

But the company is looking to provide alternative gaming options as well as refocusing its estate to offset the hit from the regulation.

It is also taking advantage of the legalisation of sports gambling in many states in the United States.

Net revenues in the US jumped 36% for its year so far.

Mr Bowcock said “our goal is to be in every state” across America.

William Hill is also acquiring elsewhere, last week splashing out £241 million for Sweden-based online betting firm Mr Green & Co.

It said the takeover of Mr Green will increase its share of revenue and profits from online as well as from outside the UK, and reduce exposure to the UK market.