William Hill Suffers 57% Total Revenue Drop due to Covid-19
UK Bookmaker William Hill has announced a 57% total revenue drop due to the Covid-19 lockdown. Gambling revenue from UK operations fell by 33% between March and April. A lack of sporting events impacted sportsbook revenues with a 70% drop-off compared to pre-Covid-19 numbers.
Revealing the numbers in a trading update, William Hill did show an upturn of 6% for its gaming and casino revenues and a 5% increase for their Online International business.
William Hill did state that the decline in betting revenues wasn’t as bad as they initially feared, due to customers continuing to bet on other sports that haven’t been so badly hit. Some customers moved onto emerging markets such as e-sport betting, UFC and table tennis.
The closure of retail shops has severely impacted earnings with like-for-like revenue decreasing by 85% while social distancing measures have been in place. William Hill has stated that it is looking to introduce a staged reopening of its UK retail estate in the second half of 2020. The bookmaker also has substantial retail holdings in the US and states they are “carefully monitoring developments” in regards to those concerns.
William Hill, like many UK bookmakers, have aggressively targeted the lucrative American sports betting market. Previously illegal in most states, a decision by the US Supreme Court to overturn the Professional and Amateur Sports Protection Act (PASPA law), enabled individual states to decide their own gambling laws. Pennsylvania (November 2018), New York (July 2019), Iowa (August 2019) and Indiana (September 2019) have already legalised sports betting with many more expected to follow suit.
As gambling laws are still very restrictive in America compared to the UK, American consumers have limited sports and markets they can bet on, a fact underlined by Hills 90% revenue drop in US retail sportsbook operations.
Responding to the group’s figures, William Hill says they have accelerated their US product development and plan to launch a US-facing online casino during the second half of this year.
The CEO of William Hill, Ulrik Bengtsson, was upbeat despite the problems caused by the coronavirus. Stating he was “exceptionally proud” of his staff and the measures the company had taken to minimise the financial impact of the global pandemic.
He revealed that a focus had been on saving costs and reducing outgoings, and this was achieved by negotiating with suppliers, cancelling pay rises and executive bonuses and suspending the dividend. Bengtsson added:
We are taking care of our teams, securing as many employment opportunities as possible and we are ready to power up the business as soon as Covid-19 restrictions permit– Ulrik Bengtsson, William Hill CEO
Despite the sharp drop in revenues, many feel that William Hill’s strategy of growth has placed the company in a strong place to weather out the storm. Industry experts, Regulus Partners, said the results are slightly distorted as the reporting period included 12 days before the UK went into lockdown. Reflecting on the results, analyst Paul Leyland said William Hill’s mix of digital and retail outlets allows the company to shift its operational focus in a post-Covid world. Sentiments backed up by Peel Hunt analyst Ivor Jones who gives a buy recommendation for the bookmaker.