William Hill announced this morning that it is significantly expanding its footprint in the US as the company loses ground in the UK. Earlier today, William Hill US confirmed that it has reached agreements with 11 casinos in Mississippi and one in West Virginia to provide sports betting risk management services and technology. William Hill US further noted it is in talks with casinos in an additional 14 states.
According to iGaming Business, William Hill US will provide these services to WaterView Casino, Treasure Bay, Palace Casino, Island View Casino Resort, Hard Rock Casino & Hotel and six others in Mississippi. In West Virginia, William Hill US has reached a deal with an unnamed casino to provide retail, online and mobile sports betting.
In a quote obtained by Gaming Intelligence, William Hill CEO Philip Bowcock commented on the development and also hinted at a timeline for the launch of mobile sports betting in New Jersey:
“It has been an excellent start for us since PASPA was overturned. We have built on our existing business in Nevada which is number one and growing and in Delaware where we are risk manager for the entire state.
“We are now the early market leader in New Jersey where our mobile app will launch within weeks and we expect to be market leader in Mississippi with these eleven casino agreements. The team continue to engage in discussions that cover a further fourteen states and they are doing a tremendous job.”
Losses in the UK, Growth in the US
William Hill’s expansion in the US market comes as the bookmaker loses ground in the UK. Just hours ago, William Hill reported pre-tax losses of £819.6 million in the six months ending June 27th, compared to £93.1 million profits over the same period one year earlier. The news sent William Hill shares down as much as 9% in morning trading.
The UK losses were linked to a UK Government decision to reduce the maximum bet on fixed-odds betting terminals (FOBTs) from £100 all the way down to £2. The decision lead to William Hill recording a one-time, £882.8 million non-cash impairment to its retail operations in the UK.
FOBTs have been the subject of frequent criticism due to their addictive nature and ability to fleece gamblers for significant sums of money in short order. FOBTs have often been referred to as “the crack cocaine of gambling” due to their ability to accept wagers of up to £100 every 20 seconds.
At last count, there were roughly 35,000 FOBTs in operation across the UK. Prior to the decision to reduce maximum stakes, each machine was estimated to generate an average income of £53,000 per year with UK gamblers losing an estimated £1.85 billion per year in aggregate.
After years of campaigns mounted against FOBTs, the UK Government moved to lower the maximum stake to £2 in May. UK bookmakers issued warnings in previous months that such a decision could lead the loss of thousands of jobs in the industry, but lawmakers were unmoved by the argument and pressed ahead with the plan.
Today, William Hill said the crackdown may result in the company closing as many as 900 betting shops and puts 4,500 jobs at risk. As William Hill faces an increasingly difficult regulatory environment in the UK, the US market becomes increasingly important for the company. Don’t be surprised to hear more from William Hill US over coming months.
Things are looking better in the United States, where William Hill reported a 50% increase in net revenue compared to the same period last year. Net revenues for William Hill US were up 50% for the six months ending June 27th.
As one analyst put it, William Hill has no choice but to go after the US market with its UK retail business “on life support.” The analyst went on to forecast “a period of intense and expensive competition as new states regulate and success with regulation will lead to a higher spike in competition and startup losses.”
That analysis sounds spot on. We’ve seen a spike in competition in the US market with major gambling operators announcing wide-ranging deals to target the United States. For instance, here’s a look at major developments this week alone:
- Monday: Parx Casino and GAN team up to offer retail and online betting in PA
- Monday: Caesars Entertainment announces major sports betting push in NJ and MS
- Monday: MGM Resorts International and GVC Holdings partner to target US sports betting and gaming markets
- Tuesday: MGM Resorts International becomes official gambling partner of the NBA
- Wednesday: First sports bets placed in Mississippi
- Wednesday: DraftKings launches mobile sports betting in NJ
- Thursday: Resorts Casino AC extends partnership with The Stars Group for online and mobile sports betting in NJ
- Friday: Paddy Power reaches deal with Boyd Gaming to extend the FanDuel sports betting brand across a further 12 states
The deals reported on today add to William Hill’s existing presence in the US. In Nevada, William Hill operates 100+ sportsbooks. In New Jersey, William Hill operates the sportsbooks at Monmouth Park and Ocean Resort Casino. In Iowa, William Hill operates the race book at the Horseshoe Council Bluffs Casino. And in Delaware, William Hill manages the sports betting operations for the state lottery at all three casinos.