William Hill Plc, owner of William Hill US, has published its full-year 2019 results today, recording a 2% decline in group revenues to $2.05bn (FY2019: $2.07bn).
While the firm continues to count the cost of ongoing retail adjustments related to UK shop closures and redundancies, developments in the US business presented a more positive picture. By way of example, the bookmaker is currently taking one-in-four bets Stateside.
Updating investors, the company reported: “Throughout 2019 we made material progress towards our strategic objective to grow a business of scale in the US. There are currently 14 states where sports betting is live and we are operational in nine of them, having launched in New Mexico, Iowa and Indiana during the year, capturing 24% of the regulated nationwide market.
“We now have market access secured in 24 states, a purpose-built digital platform and a strong local team operating from East and West coast locations. The regulatory landscape is complex and changing as the US evolves towards what we expect will be a primarily online market in the long term. However, at the current time, only nine of the states that are live are online and William Hill US offers online wagering in Nevada, New Jersey, Iowa and Rhode Island.”
During 2019 William Hill US handled $2.9bn of gross amounts wagered, either directly or indirectly, and 55% was placed through online channels. It also committed to generating adjusted operating profit of $0m to – $20m in the combined US business across the trading period.
“We are pleased to report that the US performed ahead of expectations and delivered adjusted operating profit of $1.6m driven by strong wagering growth, disciplined investment and the gain generated from the sale of the equity interest in The Stars Group,” said the firm.
During 2019 Hill’s US existing business delivered its seventh consecutive year of growth, providing sports betting at 114 locations. “We saw amounts wagered grow 14% to $1.6bn of which 69% were placed through digital channels,” it noted. “Gross win margin normalized to 6.6%, 0.6 percentage points lower due to strong sports results in the prior year. As a result, net revenue grew 2%.
“We maintained market share of 32% across Nevada. Operating costs increased 17% as we expanded our Nevada base, primarily due to increased staff and property costs. As a consequence, adjusted operating profit fell 17% on a local currency basis.”
2019 also saw the firm’s US expansion business handle $1.3bn of gross amounts wagered, nearly half of the $2.9bn transacted across the whole of William Hill US. It noted: “In our capacity as a sportsbook operator we directly handled $655m of gross amounts wagered, an increase of more than 200% as we took sports bets in three new states and opened nine retail sports books.
“Gross win margin increased 0.4 percentage points to 7.1%. As a result, net revenue increased 224%, including the income from our service provider activities which increased 280%. The expansion business delivered a blended market share of 20%, with leading retail market share of 35% and number three digital market share of 9%.
“Our disciplined growth strategy saw operating costs increase 43% as we continued to grow the local team and expand our New Jersey presence. As a result adjusted operating losses decreased to $33.2m, an improvement of 21%.
CEO Ulrik Bengtsson summarized: “2019 was a year of transition during which we executed on our ambition to diversify internationally with the acquisition of Mr Green and the continued strong growth of our US business. The group delivered a strong operating performance, ahead of our expectations and against a challenging regulatory backdrop.
“We move into 2020 in a stronger position. Almost a quarter of revenue is now generated outside the UK compared to 15% in 2018. We made positive progress with our digital platform, launching our purpose-built platform in the US and product developments in the Online business in 2019.
“We will invest in our proprietary technology as we continue to improve the competitiveness of our customer offering. We have also made great progress embedding a culture of safer gambling across the group.”