William Hill US Revenue Rises 45 Percent, Poised for PASPA Repeal
Posted on: May 8, 2018, 01:00h.
Last updated on: May 8, 2018, 10:06h.
As the US stands on the cusp of legal sports betting, British bookmaker William Hill announced Tuesday that its US operations enjoyed the biggest growth of all divisions across the whole group during Q1.
The bookmaker said revenue for William Hill US grew by 45 percent, year on year, with a 17 percent jump in bets placed stateside, thanks largely to a number of major US sporting events falling in the first 17 weeks of the year. The Super Bowl, Masters, and the NCAA’s March Madness all boosted US revenues, as did the introduction of in-play betting on tennis and a jump in wagering on hockey.
With 109 sports books and betting kiosks in Nevada, William Hill is the market leader in the only US state to permit full-scale sports betting, with around a 55 percent market share.
But the company is betting big on the likelihood that the US Supreme Court will overturn PASPA, the federal law that prohibits sports betting in all but the handful of states who legalized it prior to the bill’s enactment.
Roma Does Bookies a Favor
SCOTUS is expected to overturn PASPA, and with a decision guaranteed before the end of June, William Hill believes it is uniquely positioned to benefit and is poised to cash in.
“We are continuing to invest ahead of the Supreme Court’s decision to prepare for potential early regulation by certain states,” William Hill CEO Philip Bowcock told the analysts during an earnings call on Tuesday.
Elsewhere, despite poor performances in the UK retail betting market, Bowcock said profits had been helped by an “unprecedented” run of bookmaker-friendly results, exemplified by Roma’s 3-0 defeat of Barcelona in soccer’s Champions League.
The run had led to “unusual wagering and gaming trends,” said Bowcock, acknowledging that these would “normalize over time.”
William Hill’s online operations helped to offset the slump in retail betting. Online sales increased 12 percent compared with the corresponding period of 2017, with revenue from sports betting up 17 percent and casino 8 percent.
Word of Warning
Having divested itself of its poorly performing Australian business earlier this year, William Hill will be bracing its retail operations for another battering, to be inflicted by the UK government’s impending reduction of stakes on fixed-odds betting terminals. Meanwhile, it will be looking forward this summer to the World Cup and, it hopes, the opening up of the US market.
But Nicholas Hyett, equity analyst at Hargreaves Lansdown, has a word of warning on the US.
“It’s worth bearing in mind … that the group is still feeling the effects of the last time it rolled the dice on international expansion and lost,” he told financial website This Is Money.
“The Australian business has now been sold, but has been a source of repeated downgrades in recent years. Having cost the group something in the region of £500 million, the group will be glad to see the back of it, even at today’s sale price of a little over £170 million.”