Bookmaker William Hill, parent firm of William Hill US, has adopted a bullish stance in its 2020 Q2 financial update, acknowledging inevitable losses arising from the ongoing COVID pandemic but asserting to the market that it will emerge much stronger, particularly in the fast-developing US sports betting space.
The firm cited a stable performance in the North American market and said it was looking forward to the restart of major sports, describing it as the ‘last piece in the puzzle’. “We are confident with our position in the US,” said CEO Ulrik Bengtsson. “Following the merger of Caesars and Eldorado we now have a 29% market share in real money sports betting in the US. That clearly makes us America’s number one sportsbook.”
Turning to the headline figures, a lack of major sporting activity has taken its toll on Hill’s bottom line, with net revenues showing a 32% shortfall to $727.3m versus $1.1bn year-on-year. The decline was, however, partially offset by favorable sports results and a resilient gaming performance, with online gaming increasing by 1% from $481.9m to $484.5m.
Online activity, accounting for 67% of operations, has performed robustly despite the worst effects of the pandemic. While the UK saw declining stakes due to a diminished sporting calendar, online international net revenue increased by 10% to $188.7m against $160.6m year-on-year.
Pre-tax profit for the six-month period amounted to $185.1m, compared to a loss of $83.3m in the corresponding period in 2019, due largely to a one-off $264.5m VAT refund.
Underlining William Hill’s current US market status, Bengtsson told investors: “We are confident with our position in the US. But there’s much more to come. We have a lot of work ahead of us. We are moving away from the building foundation stage into the execution phase.
“Just as we speak right now our US teams are using our CBS partnership to acquire customers in a more efficient way. They are using the broadcasting feeds, the digital assets and the fantasy data base which is one of the largest in the US to do so.”
On state developments, he added: “We have gone live in Colorado. We’ve gone live in Illinois and we’ve gone live in DC. We have also launched our proprietary retail technology in West Virginia and we’ll roll that out in further states. And we will imminently launch gaming in New Jersey.
“On top of all of that we are gradually taking over all of the Caesars sportsbooks – more than 50 sportsbooks across the country and ultimately in 16 states. On top of that we have US sports returning and we can see already that it’s a welcome change in the landscape in the US and our US customers are very pleased to see baseball, basketball and ice hockey back.”
CFO Matt Ashley also offered a stateside perspective. “The opportunity for William Hill in America is really quite exciting,” he noted. “Once you understand how people understand and use technology in America you understand the passion for sport and then you understand our positioning. I thought it was a golden opportunity for us to create a lot of value.
“North America was stable as we were waiting for major sports to commence – which isn’t in the period but of course is just beginning to happen now. We think we’re in pretty good shape now. We’re very excited that the American sports are back – that was the last piece of the puzzle.”
On current market conditions, he stated: “We’ve only had a few days trading in the US and we’re very happy with how that appears to have taken off. However this is a very unusual period. We need to understand a bit more about the level of trading. I think the mobile channels are looking really strong which is very very pleasing but the retail business, particularly in the US, is going to take a little bit longer to come back so we need a better line of sight on that.”
Analysis: William Hill says it will emerge much stronger from a period that will undoubtedly reshape and redefine the betting and gaming genre. And on the evidence of its current US market position it would be hard to argue against that. Having already ridden the storm of UK retail closures and mammoth regulatory changes affecting its business model, the US opportunity is looking increasingly strong as major sports return to business.