How William Hill is Blazing a Trail for iGaming in the UK

Posted by Harry Kane on Tuesday, April 13, 2021

Few gambling brands have endured as much disruption as William Hill in recent times, with both 2019 and 2020 serving as challenging and transformative years for the organisation.

However, the company continues to go from strength to strength in 2021, despite reporting a net revenue decline and dwindling retail sales throughout the last 12 months (we’ll have a little more on this later in the piece).

In this post, we’ll appraise William Hill’s performance further, while asking how the firm is blazing a trail for other iGaming brands to follow in the current marketplace.

William Hill – What Challenges has it Faced in Recent Times?

William Hill has faced a multitude of channels over the course of the last three years, starting with the decision of the UKGC to sanction the brand with a £6.2 million fine back in February 2018.

This followed a detailed investigation during the two years through August 2016, which revealed that the business failed to spot clear and obvious signs of problem gambling amongst its players.

As a result, the brand also breached the Commission’s anti-money laundering and social responsibility regulations, becoming one of the first targets for such a financial sanction as the UKGC looked to take additional precautions and safeguard vulnerable players.

Around the same time, William Hill was also impacted by the government’s decision to slash the maximum FOBT wager from £100 to just £2. At the time this was confirmed, the operator announced a potential loss of more than £820 million over the coming years, while widespread store closures and job losses were also projected through 2019 and beyond.

This has been borne out in part, with the operator pledging to close 700 high-street outlets while potentially culling up to 4,500 jobs as they re-evaluated their existing business model in order to optimise profitability.

Similarly, the brand posted an official loss of £64 million alone during the first half of 2019 (the cap was finally rolled out for real in April of that year), with high-street bookies seeing their cumulative FOBT revenues decline by a whopping 25% during this brief six-month period.

As a multi-channel operator, William Hill was also hit by the proposed 6% hike in Remote Gaming Duty (RGD), which is applied to online casino games like poker and blackjack and operators that market themselves in the UK market.

A form of consumption tax, the rate of RGD in the UK has now increased to 21% overall, while this was also rolled out in April 2019 with a view to fill the Treasury void left by the decision to slash FOBT wagering.

As one of the unfortunate brands to be impacted adversely by both measures, there can be no doubt that the operator has endured a torrid few year since the beginning of 2018.

However, it has also been proactive in creating an agile business model that has reacted quickly to change, potentially blazing a trail for other brands to follow in the near-term.

How Did William Hill Fare in 2020?

At first glance, it could be argued that William Hill continued to endure a difficult year through 2021.

After all, the continued the H1 closure of its UK retail betting estates at the beginning of the year, recording a full-year net decline in revenue to £1.3 billion. This was down by 16% on the corresponding 2019 results of £1.5 billion, highlighting the challenges being faced by the brand in the UK market.

However, the brand lauded the strong operational progress of its online gambling division, which maintained its huge growth momentum in delivering a 9% net revenue increases to £802 million (up from £738 million in 2019).

Online growth was driven at least in part by the operator’s proactive decision to transition for its business online in the wake of the FOBT cap, while it has also responded to the increased regulatory challenges in the UK with a similarly forward-thinking mindset.

More specifically, the group executed key upgrades to its group-wide technology platform, creating greater financial efficiencies while moving to operate its William Hill Online and Mr Green brands from a centralised hub in Malta.

These factors also contributed to a particularly strong financial performance during H2 of 2020, as William Hill’s online division delivered adjusted operating profits of £122 million. This was up by 3% on 2019 comparisons of £119 million, highlighting the brand’s immense capacity for growth even during a series of draining economic challenges.

The operator’s sustained expansion into the North American market has also created a lucrative revenue stream for the brand, with this cemented by the decision of Caesars Entertainment to acquire William Hill for a fee of $3.7 billion.

This deal will strengthen William Hill’s burgeoning presence in the US, while enabling Caesers to branch into a sports betting market that’s becoming increasingly lucrative with every passing month.

Of course, William Hill was one of the first brands to breach the US marketplace, which has enabled it to achieve sustained and consistent growth since the Supreme Court sought to strike down the PAPSA bill in May 2018 (this had previously prohibited sports betting at a federal level stateside).

Thanks to its proactive efforts, William Hill was quick to launch in 10 of the first 13 states to subsequently legalise sports betting, including relatively small but lucrative entities such as Rhode Island.

The Last Word

William Hill isn’t the only multi-channel brand to experience significant challenges between 2018 and 2021, but they’ve definitely showcased the most robust response to issues such as the FOBT cap and increased regulation in the UK market.

The question that remains, of course, is whether other brands can follow William Hill’s example and display similar growth in the near and medium-term?

The good news is that Paddy Power have achieved similar growth to their rivals, having followed an almost identical template by moving aggressively into North America and creating a less vulnerable revenue stream in a largely uncompetitive marketplace.

Certainly, William Hill is blazing a trail for other iGaming brands to follow in the current economic and regulatory climate, as there’s no doubt that operators who move into international markets and increase their online presence will fare better than others in 2021 and beyond.