William Hill has reported a giant loss in the first half of 2019.
The leading UK bookmaker revealed this week that it made a loss of £64 million in the first half of 2019 after the UK government reduce the maximum stake on fixed-odds betting terminals (FOBTs) from £100 to £2.
William Hill has coped worse than its rivals since the cut as revenue from its high-street betting shops dropped 12%. The bookmaker also reported a 25% slump in revenue from its FOBTs.
According to reports, William Hill would have made a £51 million profit but the stake cuts resulted in the giant loss. This has resulted in the company announcing plans to close 700 around the UK, affecting an estimated 4,000 jobs.
Despite the drop in revenue, William Hill’s overall revenue rose 1% due to the acquisition of Mr Green, a popular online casino. Still, the firm’s online services faced a 9% decline in profit due to customers making smaller bets.
Rising costs also impacted William Hill’s overall as the UK government increased the duty on online betting to 21% to compensate for the loss of tax on FOBTs.
It’s been reported that before the change William Hill made more money from its FOBTs than sports betting. Competitor bookmaker Flutter Entertainment, previously known as Paddy Power Betfair, made more money through sports betting than FOBTs.
However, Flutter also reported a drop in revenue after the stake cut, with a 4% drop. Ladbrokes Coral, meanwhile, suffered a 10% revenue drop.
Several of William Hill’s rivals have also announced job closures and reported losses. Ladbrokes revealed that it would be closing 900 shops, affecting around 5,000 staff members. Betfred, meanwhile, suggested it may close 500 shops, cutting 2,500 jobs.
It’s estimated that the combined total of 2,100 shops represents 25% of the country’s betting shops. These closures will affect around 12% of the people currently employed in the UK gambling industry.
Over the last few months, William Hill has managed to break into the US and expanded rapidly throughout the country following the overturn of a ban on sports betting from last year.
Philip Bowcock, William Hill’s Chief Executive, said in a statement: “We are making good progress against the five-year strategy we outlined last year, delivering strong revenue growth in the US and other international markets and positioning William Hill well for future growth.
“In retail, we took the tough decision to announce a consultation process over the proposed closure of around 700 shops to protect the long-term future of the business following the introduction of the £2 stake limit.”
He added: “The response of our colleagues has been incredibly professional during this difficult time and I would like to thank each and every one of them for that.”