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Coronavirus Eats into William Hill’s Annual Profit

William Hill

2021-04-06

Eddy Cheung

2020 was undoubtedly the most challenging year in the recent past. Businesses and individuals incurred losses accruing to billions of dollars. One such entity is the British online and retail gambling giant William Hill. After releasing the numbers in January and the results aren’t so good. This casino and sports betting giant saw its earnings plummet by a massive 16%. The primary reason? Covid-19, at least!

Coronavirus Eats into William Hill’s Annual Profit

Overall Loss but Growth in Online Gambling

William Hill’s final 2020 earnings report came with little surprises, considering the company closed most of its betting shops in 2020 due to the pandemic. According to the report released in January, the 52 weeks of 2020 saw the company earn £1.324 billion in revenue. Now, this is a 16% slump from the £1.582 billion posted at the end of December 2019.

Also, William Hill announced that it had to live with a £29.5 million operation loss. This is despite the 35% reduction in operating cost that was mainly due to store closures. The company announced that the revenue collected from its retail business fell by at least 30%, which isn’t a surprise

When it comes to the online gambling category, the operator was happy to declare that the 2020 revenue rose by 9% (£802.8 million). That includes £503.2 million from its domestic sports betting and gaming sites during the second half of the year. The company also added that the annual pre-tax profit went up by at least 35.6%, which is around £51 million.

High Street Blues

Remember that William Hill currently operates at least 119 betting shops in England. Globally, the company employs more than 12,000 people, with 7,000 of those in the UK. But in August last year, the company announced plans to recede its presence in the town centers and High Street areas due to the Covid-19 menace.

But placing all the blame squarely on Covid-19’s feet will be a lie. Even before the pandemic shook the market, betting shops were no longer an attractive venture due to the law changes regarding FOBTs (fixed odds betting terminals). FOBTs are devices that closely resemble slot machines and allow punters to bet on events and games with fixed odds.

In 2019, the maximum wager a player can place on an FOBT was slashed down to £2 all the way from £100. As a result, most UK bookmakers closed shops. William Hill, for example, had 2306 operational betting shops in 2019’s first half. But after closing 119 shops and selling its other branches in the Isle of Man and Northern Ireland to BoyleSports, the company is now only left with 1414 operational betting shops.

Plans to Strengthen its Offshore Position

In other news, William Hill said that its objective of Customer, Team, and Execution paid dividends in the challenging year. Compared to 2019, when 24% of its gross revenue came from outside the UK, things were different in 2020, with the percentage jumping to 36%.

The company is already planning an ambitious expansion across other jurisdictions. During the press release, Ulrik Bengtsson, William Hill’s Chief Executive Officer, announced their successful partnership with Mr Green, a Stockholm-listed online casino and sportsbook operator.

Also, the company announced plans to continue its US expansion, where its 2020 net revenue increased by 32%, translating to £167.3 million. This was after the opening up of five additional gambling jurisdictions in the US.

Bengtsson Remarks

He said: “We began the year well and finished the year even stronger, highlighting the traction generated by our strategic focus on customer, team, and execution. In what was an extraordinary year, I am immensely proud of how the group has responded and the resilience we have seen in our performance.”

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AUTHOREddy Cheung

I remember the first time I saw Kai Tak, Hong Kong's gambling city, I thought I was in a fairy tale. All the lights blinking, the music and the monumental buildings, what 9-year-old wouldn’t think they’ve come to a magical place? It was my father who brought me, dragging me along and when inside I was hit by the smell of frying duck. As soon as I hit 21 I returned to Kai Tak, A bit nervous to see if my mind had embellished the memory, but it hadn’t. Kai Tak was still a magical place. I decided I wanted to spend as much time as I could at this place, so I did. For the next coming years I lived and breathed Kai Tak. Now I am married with kids, and they have become a part of my life too. That’s why I started exploring online casinos to create a better work-life balance and I couldn’t be happier!

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