William Hill online revenues fall on tough comps and due diligence measures
London-listed operator reports a 12% dip in online sportsbook revenues as growth in the US continues
William Hill today cited enhanced customer due diligence measures as a major factor behind a 6% decrease in pro forma online net revenues for the 17-week period to 30 April 2019.
Gaming revenues remained flat on a pro forma basis, but sportsbook revenues fell by 12% as the London-listed operator blamed strong prior year comparatives from 2018’s “exceptionally” high gross win margin.
For comparison, Paddy Power Betfair online sportsbook revenues fell 10% in Q1 thanks to “unfavourable sports results”, primarily February racing and March football.
At Hills, UK net revenue was also down by 8% as international revenue dropped by 2%, while the recently-acquired Mr Green’s performance was overall “in line with expectations”.
Hills CEO Philip Bowcock
William Hill CEO Philip Bowcock said: “As anticipated, enhanced customer due diligence measures impacted revenues in our Online business in the period, while gross win margins returned to more normal levels.
“There were record actives for Cheltenham and the Grand National, reflecting positive underlying customer trends, and we expect that the Mr Green performance will drive further progress in Online performance later this year.”
Retail net revenue was down 7% following a 1% reduction in the number of shops following FOBT stake cuts, while sportsbook net revenue in retail was up 2%, with wagering up 5%.
Other significant events in the period saw Hills appoint a new head of retail responsible gambling and initiate a switch to brand-led marketing alongside brand ambassador Anthony Joshua.
Regulus Partners analyst Paul Leyland said the figures showed William Hill had a “material organic problem on its hands” in the UK.
“Some of the Q1 performance can be explained by regulatory change and tough comps, but it is hard to see market share gains being the result, especially online,” Leyland said.
“The MRG acquisition adds a grey market boost, but the extent to which this can drive material, sustainable growth is still open to question,” he added.
Elsewhere Hills reported “excellent growth” in its US division with total net revenue up 48% and total wagering up by 99% from the same period in 2018.
On the US opportunity, Bowcock said: “Just one year on since PASPA was overturned William Hill has doubled the sports wagering it handles in the US, seen record performances at the Super Bowl and March Madness, is live in all seven states to have allowed sports betting and expects to enter further states soon, with Indiana and Iowa the most recent states to pass bills to legalise sports betting.”