Earlier this month, British bookmaker William Hill reported overall revenue of £1.6 billion for 2015, down one percent from the previous year.
In addition to subpar growth, business was hurt by £87m in new UK taxes on gambling.
Company executives blamed part of the lack of growth on issues with new technologies launched by William Hill’s online gaming division in Q4. As a direct result of that, the company is removing Andrew Lee as head of that division.
Crispin Nieboer, who formerly founded Gaming Media Group (best known for PokerHeaven.com and The Poker Channel) and currently works as William Hill’s Director of Corporate Development & Innovation, will take charge of the online division until a long-term replacement is found.
Traders found the news favorable, as William Hill shares were up in response to the announcement of the change.
Consolidation of competition could make 2016 even worse
Two separate merger agreements between William Hill’s competition could help rival operators gain an edge on the already flatlining bookie.
In December 2015, the Competition and Markets Authority (CMA) approved a merger between Paddy Power and Betfair, the result of which is a single entity with revenues of about £1.1 billion, and plenty of operating capital to increase marketing efforts compared to prior years.
The CMA is currently investigating an even larger merger between Ladbrokes and Gala Coral, each of which do business both online and via land-based betting shops. If the deal is approved, the new company would replace William Hill as the largest bookmaker in the UK.
Although company executives spoke positively of performance in their retail division, additional global market factors won’t make it easy for William Hill – or any online bookmakers – to excel in 2016. Several countries, including Greece this month, have recently expressed a desire to license and regulate online gambling. Any jurisdictions that follow through will create new operating expenses for online betting companies.
William Hill facing loads of trouble down under
In Australia, William Hill is one of the most noteworthy bookmakers currently operating under what some identify as a loophole in Australian gambling code.
The essence of the law is that placing most types of bets online is illegal, yet placing many of those same bets via a phone is legal. The law existed prior to the existence of smartphones, and William Hill’s smartphone app operates in a way which the company argues makes it compliant.
The company was reported to Australian Federal Police for this style of operation in mid-2015, but seems unlikely to be officially investigated in the near future. An investigation could still happen in 2016, and the results could cut off a significant revenue stream for the company – not to mention the potential legal and regulatory fees associated with fighting its case.
Today, Australia continues to cause issues for William Hill. Late in 2015, the company finalized a deal to sponsor the Australian Open, which is being played this week.
With rumors of match-fixing flying around the tennis world faster than tennis balls, Australian tabloid the Herald Sun printed a front page story attempting to tie William Hill’s sponsorship to the match-fixing scandal.
The headlines included “Federal Police Examine In-Play Tennis Betting” and “Government Fuming Over Gaming Deal.”
William Hill has demanded that the Herald Sun retract the story, the details of which they refute entirely. In a press release, a spokesperson defended the company vehemently and noted that no formal investigation has been launched by the Australian Federal Police.
Although most rational people will dismiss the story as false for coming from a tabloid, rumors such as these can easily have a negative effect on William Hill’s business. While William Hill looks forward to a positive 2016, external factors have thus far not made that a simple goal to achieve.