UK betting giant William Hill posted has a £74.6 million ($104 million) pre-tax loss for 2017, due in large part to the write-down of its Australian operations.

William Hill Australia write-down

William Hill has a strong presence in Australia where it sponsors the Australian Open, but recent regulatory changes Down Under pushed the entire group into the red last year. (Image: William Crossling/AAP)

William Hill Australia has been negatively impacted by the country’s ban on credit betting, which came into force earlier this month.

This has led the group to dramatically reassess the value of its Australian assets, reporting a £238 million ($333 million) impairment charge. Also known as a book-value reduction, this is a non-cash charge that is nevertheless reported as an expense, thereby reducing net income.

The bookmaker showed a £221 million($308.6 million) loss in Australia last year, before interest and tax.

Chief Executive Philip Bowcock said during an earnings call on Friday morning that the Australian business “took a higher level of bets using credit than others.”

William Hill Australia Sell-Off?

The company said in a note to the UK’s FTSE 100 last month that it would consider selling its Australian arm, although an alternative would be to seek consolidation with another Australian-facing company.

The prohibition of in-play betting, as well as new taxes and advertising rules, have also damaged business in Oz. Meanwhile, the likely implementation of a point-of-consumption tax has added an extra layer of bleakness to the horizon.

“If you go back in time to 2013 when we acquired the business, Australia was a different place,” rued Bowcock.

William Hill entered the market through the £460 million acquisition of Sportingbet’s regulated assets, and shortly afterwards it absorbed Australian brand Tom Waterhouse.

“This has been a very disappointing acquisition for shareholders,” Stifel analyst Jeffrey Harwood told the Financial Times on Friday.

US Sports Betting Would Be Boon

The picture was rosier closer to home, with a significantly improved year-on-year performance, particularly in its online operations. But with a government review expected to significantly reduce the maximum stakes of fixed-odds betting terminals (FOBTs), the retail bookmaking sector is likely to be squeezed hard in 2018, despite the World Cup this summer.

One silver lining for William Hill is the potential opening-up of the US sports betting market. The company operates over 100 full sports books and betting kiosks in the state of Nevada, including some at mostly off-Strip smaller Las Vegas casinos. Hill would be a natural partner for other gaming venues across the country if the market were to expand beyond the Silver State.

“We are a leader in sports betting in the US and are well-positioned to benefit should more states start to regulate if the pending Supreme Court decision is positive,” Bowcock emphasized during that earnings call.