William Hill in £25m profit blow as punters walk away

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The City bet against the UK’s biggest bookmakers today after William Hill admitted that hundreds of online punters were walking away from the firm every day.

William Hill — which lost around  £9 million at a dreadful Cheltenham festival for the industry — said customers taking self-imposed “time outs” from gambling under new regulations could hit online profits by up to £25 million this year.

The shocking profit warning — Hill’s second in six months — sent the shares down more than 13% or 49.85p to 320.95p. Rival Ladbrokes, whose online business is smaller, sank 5.5p to 115p or 5% while Paddy Power Betfair was also hit, down 180p to 9060p.

Under new rules introduced last October to curb problem gambling, online customers can click to take a “time out” for up to 42 days, while punters can also self-exclude for up to five years. 

Chief executive James Henderson said up to 400 customers a day were opting out so far since the changes were introduced. 

The average “time out” is 35 days while customers are self-excluding for an average of three and a half years so far.

The William Hill website has  2.7 million active customers but the trend threatens to put a major dent in the profitability of the online operation, which made £126.5 million in operating profits last year. “It’s a small amount but if it continues on the trends that we are seeing at the moment, the cumulative impact is why we’ve guided the market today,” Henderson said.

Following the departure of the bookmaker’s previous online chief, Hills also admitted UK growth had been softer because of huge numbers of lower spending customers it signed up in its drive to claim 15% of the online market. 

“We believe now is the right time to go from a volume to a value business,” Henderson added.

The Cheltenham festival meanwhile cost the bookmakers around £60 million as a host of favourites romped home. 

The only long priced winner was a 28/1 shot in the last race of the festival, which Henderson admitted was “too little, too late”.

One industry insider said: “William Hill is to an extent the victim of  its own success because it’s so big online it’s where rivals will take customers from. 

“But it priced crazily at Cheltenham, offering best price on every horse. It feels like they rolled the dice on having a good festival and got caught out.”

Source Article from http://www.standard.co.uk/business/william-hill-in-25m-profit-blow-as-punters-walk-away-a3210021.html

March 24, 2016 |
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