US revenue growth offsets retail decline at William Hill
William Hill has put a year-on-year increase in revenue during the 17 weeks to 29 October down to its ongoing expansion efforts in the US, with its activity in the country helping to offset further declines in its retail business following the changes in UK fixed-odds betting terminal (FOBT) regulations.
Revenue for the period between 3 July and 29 October was up 1% on a year-on-year basis. Sportsbook wagers were up 2%, but William Hill also noted an 8% drop in net gaming revenue.
Online net revenue for the 17-week period was up 26%, but William Hill noted that on a pro-forma basis, adjusting for the acquisition of Mr Green, online net revenue was up 1% year-on-year.
The bookmaker said that its UK online business was responsible for two thirds of overall online revenue. On a pro-forma basis, UK net revenue was up 4% during the period.
However, online international net revenue was down 4% on a pro-forma basis. William Hill said that while the integration of Mr Green is well underway and the transaction has performed in line with expectations, its overall performance was harmed by certain regulatory headwinds, such as the closure of its Swiss arm and disruption to payment methods in other European markets.
William Hill is set to further expand its online business, with a number of new technology developments set for release. A new sportsbook front end for Italy and Spain will launch in the fourth quarter, replacing the current third party solution and a single wallet solution for Spain will roll out towards the end of the year.
In terms of retail, like-for-like net revenue fell 16%, which the bookmaker said was in line with expectations due to the ongoing impact of changes to FOBT rules in the UK. The maximum stake on FOBT machines was cut from £100 to £2 in April of this year.
Retail gaming net revenue was down 39%, but William Hill said this decline was offset by a 13% rise in sportsbook net revenue. The bookmaker also noted that gaming trends are improving as customer behaviour adjusts following the new £2 maximum staking limit.
During the period, some 700 UK shops were closed as part of the William Hill Triennial Review. The bookmaker's estate now consists of approximately 1,600 shops and, while William Hill said that it is too early to establish a trend, the underlying results are consistent with its existing guidance.
Looking at the US, net revenue was up by 60%, or 53% on a local currency basis. William Hill said that its US business continues to deliver on its retail and mobile strategy to be a market leader in the country.
Net revenue from launches in states that regulated following the May 2018 repeal of PASPA tripled during the period, driven by the opening of new states, while its Nevada business saw a 27% increase in revenue. William Hill went live in Indiana and Iowa in the period, meaning the bookmaker is now active in 10 states.
Key US developments in the 17-week period included the launch of a new digital platform ahead of the NFL American football season, as well as agreeing a new, exclusive partnership with Monumental Sports & Entertainment to open a sportsbook at the Capital One arena in Washington D.C.
In addition, in anticipation of Eldorado Resorts closing the acquisition of Caesars Entertainment, William Hill said it is preparing to bring operation of the existing Caesars sportsbooks into the William Hill network.
The US business was strengthened further by the acquisition of CG Technology's race and sportsbook assets, announced today (21 November). This sees William Hill US strengthen its position in Nevada, while gaining a foothold in The Bahamas.
Ulrik Bengtsson, who took over as chief executive at William Hill following the departure of Philip Bowcock, said he is pleased that the bookmaker remains on track to meet its full year expectations.
“In the US our business has gone from strength to strength,” Bengtsson said. “We have excellent market access, a valuable partnership with Eldorado and we are excited about the potential that is presented by the combination with Caesars.
“We have remodelled the UK retail estate, while the UK online business has benefited from a series of customer facing improvements evidenced in the stabilising market share in the last two quarters. In addition, we expect our international online business to benefit from a number of important product improvements that will be delivered over the coming quarters.
“We undoubtedly have great people and a shared vision at William Hill. Our job now is to push on and do even better in terms of customer focus and execution.”