Gambling taxes weigh heavy on William Hill’s profits

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William Hill’s third quarter operating profits slumped 39 per cent as it warned full-year profits would be near the bottom of the analyst consensus range of £290.9m to £312.1m.

Net revenue was down nine per cent in a “tough quarter” for the betting firm, which also took a £23m hit from the new gambling duties. Operating profits at its retail division were down 31 per cent while online fell 37 per cent.

The firm was hampered by comparisons to a bumper third quarter last year, aided by huge gambling activity during the football World Cup, said William Hill chief executive James Henderson.

“Q3 was always going to be a tough quarter given last year’s World Cup and very strong gross win margin, allied to £23m of additional gambling duties this year,” he said.

“The quarter also featured weaker than expected sporting results impacting retail, the US and Australia, and the drag effect of the non-core market decline in online. The growth in online’s core markets - the UK, Italy and Spain - remains strong for both betting and gaming.

“Whilst good operating cost discipline has partially offset the weaker than expected results and non-core market impacts, the board now expects full-year operating profit to be around the bottom of the analyst consensus range.”

Yesterday, rival bookmaker Ladbrokes also revealed higher gambling taxes and the costs of a marketing campaign ahead of its proposed £2.3bn merger with Gala Coral had pushed its third-quarter profits down 57 per cent, while sales saw a marginal 0.7 per cent rise.