William Hill Closes 900 Betting Shops in the United Kingdom
William Hill plans to close up to 900 betting shops over the next 2 years, a move which could cost up to 4,500 jobs in the United Kingdom. William Hill said it is concerned about new UK gambling laws and tax rates, which come into effect on April 1 of this year.
The biggest impact will be a maximum bet limit of £2 on fixed-odds betting terminals (FOBTs). The current bet maximum is £100. High rollers will stop using FOBTs, while even mid stakes gamblers will not bet as much as they once would have.
Another key factor in the William Hill closures is a tax rate increase in overseas wagers. Chancellor of the Exchequer Philip Hammond announced in late 2018 that the Point-of-Consumption Tax (POCT) would increase from 15% to 25%.
While the tax increase does not directly affect the William Hill betting shops which dot the landscape in the United Kingdom, it does affect the bookmaker company. With fewer revenues from overseas betting, William Hill must marshal its resources better than it did in the past.
William Hill Closes 900 Betting Shops
William Hill currently operates about 2,300 betting shops throughout the UK, so it is closing approximately 40% of its entire network of betting shops. Each shop has 5 employees staffing it, so thousands of jobs are at risk.
Last year, Ladbrokes announced a similar downsizing. Paddy-Power Betfair bought Ladbrokes in the spring of 2018 and instituted a number of changes to streamline the UK’s oldest bookmaker company.
William Hill UK announced disappointing revenues in the second half of 2018, so its own downsizing was long expected.
William Hill vs. American Sports Leagues
Meanwhile, William Hill US is experiencing a surge since the U.S. Supreme Court struck down a federal ban on sports betting: the Professional and Amateur Sports Protection Act (PASPA). William Hill had a direct role in the landmark Supreme Court case which led to the repeal.
In October 2014, Monmouth Park race track in Oceanport, New Jersey teamed with William Hill US to partner on a land-based sportsbook. The announcement led to a lawsuit by the NFL, NBA, MLB, NHL, and NCAA. The sports leagues won a decision in US District Court and two decisions in the US appellate court system.
When then-New Jersey Gov. Chris Christie appealed the decision to the US Supreme Court, many thought the SCOTUS would reject the appeal — like it had with a 2014 sports betting appeal by Gov. Christie. Instead, the SCOTUS agreed to hear the case on Dec. 4, 2017. On May 14, 2018, the Supreme Court ruled 6-3 to strike down the PASPA ban.
William Hill US Surges
Since then, William Hill US has been one of the most aggressive sports betting operators in signing strategic deals and acquiring new sportsbooks. Recently, William Hill signed a deal to operate seven more sportsbooks in Nevada, bringing its total of Nevada sportsbooks and betting shops to 115 of the total 128 bookmakers in the state.
Philip Bowcock, the CEO of William Hill, said of the Supreme Court decision and its aftermath, “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 11 casino agreements. The team continue to engage in discussions that cover a further 14 states.”
Bowcock has said that William Hill plans to focus its sports betting business on the United States in the years ahead. With the United Kingdom and Australia creating higher tax rates and more restrictions, the idea is to grow in what is potentially the world’s largest sports betting market.
Effect of Brexit on William Hill
None can say what role the possibility of a hard Brexit might play on William Hill’s decision to focus on the United States. There is a possibility that the United Kingdom leaves the EU without a deal at all. That could make operations in Europe troublesome for William Hill.
It also might make operating out of Gibraltar troublesome or costly, if a reasonable Brexit deal for Gibraltar does not materialize.