William Hill is prepared to quit the Australian market in the face of regulatory pressures, the company said on Monday.
Recently enacted gambling laws in the country have already seen the prohibition of credit lines and in-play betting and, with state-by-state point-of-consumption (POC) tax looming, the UK bookmaker’s Australian arm is beginning to feel the pinch.
In a note to the FTSE 100 on Monday, the UK bookmaking giant said that, despite a “solid year” across all its operations, it was considering a sale of William Hill Australia, although an alternative would be to seek consolidation with another Australian-facing gambling company, a source told the Financial Times.
“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure and therefore we are undertaking a strategic review of our Australia business,” the company said.
Credit Dries Up
Last year, the Australian Treasurer Scott Morrison announced his intention to introduce a “nationally consistent” POC in order to “harmonize” the taxes gambling companies pay across the country.
This would mean online bookmakers would pay a 15 percent tax to each individual state on all bets taken from players within each state. Currently, they pay a percentage of gross gaming revenue to the state where their operations are licensed and based.
Most online sports betting operations are currently based in the Northern Territories, which has carved out a niche for itself as low tax regime.
Meanwhile, William Hill admitted that Australia’s credit betting ban has already dented revenues, although this was largely offset by favorable sports results elsewhere. The ban was introduced last year as part of a sweeping reform package designed to combat problem gambling.
‘World’s Biggest Losers’
William Hill entered the market in 2013 when it acquired homegrown bookie Sportingbet’s regulated assets for $460 million, absorbing Tom Waterhouse, another Australian brand, shortly afterwards.
The market, at the time, was one of the most liberal, and lucrative, in the world. But liberality has been replaced by alarm and a strong political push to keep it in check has emerged.
Australians were dubbed “the biggest losers in the world” after a study by H2 Gambling Capital asserted that the country had the highest volume of betting losses per capita, some US$990 a head last year.
Despite regulatory headwinds Down Under, William Hill said adjusted profits across all operations came in above forecasts and were 11 percent better than last year.
The company’s Australian arm represents about 7 per cent of its overall revenues, £1.6 billion ($2.2 billion) in 2017.