William Hill PLC has reported ‘rapid progress’ in the US in its trading update for the unaudited 17 weeks and 43 weeks to October 23 2018 (H2 to date and year-to-date (YTD)). The headline figures revealed online net revenue ahead by four per cent year-on-year, with sportsbook yield and gaming up eight per cent and one per cent respectively. The firm’s Nevada activities were also reported as delivering strong growth with net revenue, year-on-year, up by 36 per cent in local currency.
Taking some of the gloss off those figures, however, was the prediction by William Hill that operating profit will land somewhere between £225m and £245m by the end of the year, compared to operating profit of £291.3m for 2017.
A snapshot view of Hill’s US expansion shows good volumes in early months’ performance, with approximately $200m wagered. The figure was described by the bookie as “…in line with our expectations”. It also confirmed that it is taking sports bets in Delaware, New Jersey, Mississippi and West Virginia, with iOS and Android apps launched successfully in New Jersey.
Additionally, the company noted that market access has now been secured in 17 states with partnership deals signed with Eldorado Resorts, Golden Entertainment and IGT.
Philip Bowcock, CEO, commented: “It has been another busy period for William Hill, with significant progress made on our plan to capitalize on the emerging US sports betting opportunity following the Supreme Court’s decision to overturn PASPA in May. I’m pleased to report that we’ve built on our market leading position in Nevada to make rapid progress in other states as they legalize sports betting, and are the only company to be taking sports bets in the first five states to have regulated.
“Our goal is to be in every state. Supported by the extensive experience of our US existing business in Nevada, we’re building a network of market access agreements, including our strategic partnership with Eldorado, expanding our relationship with Golden Entertainment and exclusively partnering with IGT for sports lottery opportunities.
“We’ve opened 18 new sports books and launched our initial mobile offering in New Jersey. We’re also progressing a new technology solution to go live in 2019, incorporating the newest elements of the group’s existing platform and a bespoke Player Account Management system from NeoGames, whose solution is more feature-rich than any sports betting platform currently live in the US.”
SBC Americas Analysis:
William Hill will doubtless be kicking its heels in response to a strong start to its post-PASPA US adventure, and the prospects for further growth as more states go legal with sports betting. The prediction of lower operating profits this year will be less welcome though. With its UK high street business blighted by tough trading and damaging legislation, investors will be focusing more intently than ever on what move the firm will make next stateside. We expect more will be revealed in the firm’s capital markets day event where it will talk in greater detail about its US aspirations, including the drive to grow EBITDA from its current value of circa $50m to $300m in 2023.