William Hill US hits breakeven as expansion costs offset Nevada profits

Operator has a 34% market share across the seven states where sports betting is regulated

William Hill’s US business was almost exactly breakeven in FY2018, as expansion costs were offset by profits from its existing business.

Adjusted operating profit from the existing business was up 84% to £32.6m, with revenues up 38% to £80m.

Meanwhile, expansion made a loss of 333.2m, on revenues of £11.8m,

Hills said its existing business saw wagers up 25%, with mobile up 42% and retail broadly flat, as favourable sports results saw margin increase 0.9pp to 6.7%.

The expansion business accrued revenues from operations in New Jersey and B2B deals in Delaware, Mississippi, Rhode Island, Pennsylvania and West Virginia.

The six states saw total wagering of c$430m, made up of c$212m wagered directly with Hills and c$218m via partners, with a margin of 10.4%

Operating costs from expansion were $56.9m, including investments in New Jersey to support the mobile launch and brand awareness.

“We have started delivering on our strategy with the expansion of our US business, being first out of the blocks in all states that have regulated sports betting,” said Hills CEO Philip Bowcock.

The firm has a 34% market share by revenue across all seven regulated states, putting it ahead of its stated plan to have a 15% cut of the regulated market.

“In New Jersey, our brand awareness has increased from 5% in September 2018 to 22% in February 2019,” the firm said in its FY18 report. “Our share of the mobile market has grown each month since launch to 12% in January 2019, ahead of improvements to the product and customer experience that will come when we launch our new technology platform, which is on track for later in 2019.”

Finance | William Hill US