119 Betting Shops to be closed by William Hill
Announcing its interim results for the first half of the year, William Hill has revealed that 119 of its betting shops will not reopen following the lockdown. However, figures show that the gambling operator has weathered the pandemic well, and will continue to expand both online and in the emerging US sports betting market.
Most Jobs Will Be Saved
Leading British bookmaker William Hill has revealed plans to close 119 of its high street shops permanently. During the coronavirus pandemic, the lockdown left retail shops closed for months and many customers shifted their betting online. Now William Hill plans to combine its retail and online operations, in a bid to streamline costs.
While the company is closing down a portion of its shops, it has in fact recovered well following the lockdown. The return of sporting fixtures, such as horse racing and the Premier League, finally gave punters something to bet on and many loyal customers have been excited to return to their local bookies.
William Hill says that this strong recovery means that it will be able to repay £24.5 million of furlough funds that it received from the government to pay its staff of 7,000 during the lockdown. Announcing the changes, the company’s chief executive Ulrik Bengtsson remained positive. Speaking in a media release, Bengtsson said:
“I am delighted with William Hill’s performance in these extraordinary times. Our team has been remarkable, supporting each other and our customers throughout the pandemic, and I would like to thank them for their continuing efforts. We are pleased with the moves we have taken to further strengthen customer protection, sending over 1.2 million player safety messages, and we are fully supportive of an evidence-based approach to the review of the Gambling Act, as suggested by the recent House of Lords report.”
Despite the betting company’s positive recovery, footfall is still down on the high street due to the pandemic. Around 300 employees are affected by the closures, although William Hill has said that only 16 will lose their jobs, as other affected staff are to be transferred to different roles.
The news came William Hill revealed its interim results for 2020. In summary, the results reported the trading was strong before COVID-19 hit and costs were controlled well during the lockdown. It reported a 32% drop in revenue to £554.4 million during the first half of year. Its profit before tax was at £141.1 million against a loss of £63.5 million the previous year.
This was in part due to a VAT refund worth an estimated £200 million. In May, a tribunal ruled in favor of bookmakers seeking compensation for being overcharged on VAT from revenue earned on fixed-odds betting terminals. Bookmakers like William Hill had been overpaying on taxes for at least eight years.
That tax refund could not have come at a better time for William Hill, which would otherwise have suffered a loss of £14.2 million before tax. Despite the announced closure of some retail locations, William Hill’s interim results resonated well with shareholders. Following its media release, shares went up by 2.5%, although overall shares are still low against the same period last year.
Further US Growth
William Hill has a workforce of 12,000 staff spread over ten countries. 7,000 of these employees are based in the UK, although, that split could change in the coming years. The gambling firm has been focusing on expanding its operations in the US, where the sports betting market is opening up, state by state.
Becoming the first bookmaker to open shop in states that have newly legislated for sports betting, would put William Hill at an immense advantage. This year, it plans to launch operations in Colorado, Illinois and Washington DC.
All of this is due to the overruling of PASPA, the Professional and Amateur Sports Protection Act of 1992. In May 2018, the Supreme Court sided with New Jersey in the ‘Murphy v. National Collegiate Athletic Association’, ruling that the act conflicted with the tenth amendment. Since then, individual states have been allowed to decide for themselves if they want to introduce sports betting. Uptake has been gradual, but consistent and many more states are expected to follow.
While the US sports betting market promises new opportunities, the situation in the UK is rather different. In 2018, the UK market was responsible for 85% of William Hill’s profits. Now the UK only accounts for 61% of the company’s profits. During the last two years, the UK has seen a crackdown on gambling operators, as the Gambling Commission has grown stricter in enforcing regulations.
Decisions like the stake limit on fixed odds betting terminals and the credit card gambling ban have also had an impact on operators. While the government’s upcoming review of the 2005 Gambling Act could reinforce player protections and help to safeguard vulnerable groups from gambling harms, it may also drive some UK operators further into the arms of markets in Europe and the US.
Last year saw William Hill close 700 of its retail locations, after stakes at fixed odds betting terminals were cut from £100 to £2. Now the number of physical betting shops will shrink again, and it can be expected to decrease further in the coming years. Undoubtedly, the coronavirus pandemic has been the biggest challenge to gambling firms in recent times. While many have weathered the lockdown better than other businesses, it has certainly hastened the overall shift to online gambling.