William Hill report 40 per cent fall in FOBT revenues following stake cut

William Hill are the latest bookmaker to reveal that revenues from FOBTs in their betting shops have fallen by around 40 per cent since the stakes on the controversial gaming machines were cut to £2 on April 1.

The impact of the changes had been "in line" with expectations, William Hill said on Wednesday as they released a trading statement for the first four months of the year.

Paddy Power Betfair recently said the government crackdown had reduced revenues towards the top end of their previous guidance of 33 per cent to 43 per cent, while independent operators had revealed similar figures.

William Hill have previously guided that the cut in stakes would reduce their profitability by £70 million to £100m and lead to up to 900 betting shops closing.

The firm said it would be several months before any "meaningful conclusions" could be drawn, chief executive Philip Bowcock adding: "The impact of the introduction of the £2 stake limit has been in line with our expectations. We are confident in our plan to manage this major change, and will update more fully at the half year."

Asked by analysts if revenues had been affected at a similar levels to the 40 per cent mentioned by rivals, Bowcock said: "I think the 40-odd per cent...is again broadly where we expected it to be and where we are at the moment."

William Hill have written to around 1,800 landlords asking for rent reductions, on which Bowcock said there had been a "degree of progress", while he added "a handful" of shops had closed so far this year

Overall, William Hill said group net revenue for the 17-week period was up two per cent on 2018.

Online net revenue rose eight per cent thanks to the acquisition of Swedish firm Mr Green but was offset by the impact of increased customer due diligence.

Retail net revenue was down seven per cent overall with sportsbook net revenue up two per cent and sportsbook wagering up five per cent, with a strong performance in football.

Gaming revenue in the bookmaker's estate of betting shops was down 15 per cent during the period thanks to the FOBT stake change, which only came into force for the final month.

In the United States total net revenues rose 48 per cent in the year since the lifting of the federal ban on sports betting.

Bowcock said: "Online continues to show good momentum as we focus on growing our mass market customer base, while retail has begun to adapt to the new £2 machine gaming stake limit.

"Just one year on since Paspa [the Professional and Amateur Sports Protection Act] was overturned William Hill has doubled the sports wagering it handles in the US, seen record performances at the Super Bowl and March Madness, is live in all seven states to have allowed sports betting and expects to enter further states soon, with Indiana and Iowa the most recent states to pass bills to legalise sports betting.

"As anticipated enhanced customer due diligence measures impacted revenues in our online business in the period, while gross win margins returned to more normal levels. There were record actives for Cheltenham and the Grand National reflecting positive underlying customer trends, and we expect that the Mr Green performance will drive further progress in online performance later this year."

Bowcock added that William Hill, who have launched a "Nobody Harmed" safer gambling campaign, were "encouraged" by industry collaboration in the area.

Analysts at Davy stockbrokers said William Hill's performance in 2019 was "a reminder of the challenges — both external and internal — facing the business at present".

They added: "However, many of these are well understood and no worse than feared."

William Hill's share price ended Wednesday down 3.65p at 134.65p.

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