illiam Hill has plunged into the red, and blamed the fallout from the anticipated introduction of a £2 maximum stake on fixed odds betting terminals (FOBT) next month. The bookmaker reported a loss of £722 million (USD 955 million) for 2018, compared with profits of £147 million (USD 195 million) the previous year. Revenue rose 2 per cent, from £1.59 billion to £1.62 billion (USD 2.14 billion).
The company said the loss was largely due to an exceptional charge of £883 million (USD 1168 million) linked to the government’s decision to reduce the maximum stake on FOBTs from £100 (USD 130) to £2. The government announced plans to tighten the rules around the betting machines, which have been dubbed the “crack cocaine of gambling”, last year in a bid to curb gambling problems.
However, the move was met with outcry from bookmakers, who said the tougher regulation would lead to the loss of thousands of jobs in the industry.
Meanwhile, William Hill is also facing problems with its business in the US, as the American authorities consider a ban on online betting. Philip Bowcock, CEO of William Hill, said 2018 had been a “busy and decisive year”.
“We know the next few years will require careful navigating and investment, but with a clear strategy and diverse, experienced leadership teams in place we are ready to capitalise on the opportunities available to us,” he added.
Emma-Lou Montgomery, associate director at Fidelity Personal Investing, said: “William Hill certainly wasn’t dealt a winning hand in 2018, with the introduction of the fixed odds stake limit in the UK and a threatened ban in the United States. But the gambling group now knows what it’s up against and has clear plans to turn this into a winner and double operating profits by 2023.”
“The US looks to be key for the group, where it has a clear lead. While in the UK time will tell how the fixed odds betting cap affects business. But Q2 is expected to be tough and the future of some 900 shops will hang in the balance until the full extent of the impact is known,” she added. Shares in the company dropped 2 per cent in early trading.