A combination of circumstances in Australia are serving to make the climate significantly harsher for gambling operators there. Several states have recently introduced new taxes on gambling, which is certainly one element, as is the ban on betting using credit and deferred settlement in wagering. According to a recent Financial Times analysis, a greater proportion of William Hill’s betting employed leverage than their major competitors in the market, meaning that these changes hit William Hill harder than most.
One example of this: Back in January, the biggest credit account in all of Australia was declared by Fairfax Media to be that of celebrity real estate mogul John McGrath, who allegedly owed over £16 million in gambling debts to William Hill.
Beyond that, the firm was very recently hit by a £238 million impairment charge, based on its belief that its business in Australia was worth less than at previous valuations. Paddy Power, Ladbrokes, and Bet365 all bid, but in the end the deal was sealed by online sports betting provider CrownBet Holdings.
Crownbet are quietly part of the mighty Stars Group, a firm notoriously hungry for acquisitions. The deal was signed off for £169 million in enterprise value, a massive hit for Will Hill which essentially amounts to several hundred million pounds in lost investment. The firm reported an annual loss of £75 million after slashing the value of its Australian business, as detailed above.
Several states have fallen in with one another in a wave of new tax regulations sweeping the country, the new “point of consumption” taxes which typically amount to 15% on digital gaming operators. These are levied according to the physical location where the bets are placed, rather than that of the gaming companies’ headquarters.
It looks likely that Will Hill’s next steps will include consolidating its offerings in the UK industry, its homeland. Beyond that, it looks to be wagering a good amount of its future direction on what gets decided in former New Jersey governor Chris Christie’s case against the NCAA; the Supreme Court’s decision on the case could kickstart a regulated sports betting industry over the pond. There’s been a huge black market in sports betting over there for years, which is a key argument being employed by proponents of regulation. What gets decided that day, whenever it is, looks to drastically affect William Hill’s short-term future, as well as that of countless other bookies and would-bes.
