William Hill appears to be in sharp decline with the company’s future already having been in doubt before the coronavirus crisis that has played havoc with the fortunes of bookmakers.
Many businesses in the industry were feeling the pinch beforehand but the onset of a global pandemic has wreaked havoc on their efforts to keep revenues and profits on an even keel.
Indeed, the group that owns William Hill recorded a pre-tax loss of £37 million in their most recent financial figures. That was partly due to a change in the law that forced the company to close several hundred betting shops on the high street.
A focus on online betting has never been a strong suit for William Hill, which has a website that does not seem to have been updated properly for many years. While other bookmakers have embraced the internet – bet365 being a major success story in this sphere – William Hill did not.
So, with the future of the company severely in doubt, can William Hill survive coronavirus?
Pandemic has sharp impact on bookmaker businesses
Bookmaker businesses have been badly affected by the impact of the coronavirus. The postponement of major sporting events such as the Grand National and Euro 2020 have left gaping holes in the sporting calendar. With Wimbledon and the Olympics also not taking place this year, there is a large gap to fill for the bookmakers when it comes to their bank balances.
William Hill saw its share price fall by a quarter in a day last month despite chancellor Rishi Sunak announcing an ambitious raft of measures aimed at helping to keep companies afloat. Shares have since rebounded slightly but they are still worth less than half than they were just a few months ago, before the coronavirus started to spread around the world at a rapid rate.
The company behind William Hill was at particular risk of the outbreak due to the burden of debt – said to be over £500 million – that it accrued in a bid to expand into the United States.
America is seen as the next big growth market for online betting after the Supreme Court’s decision to legalise the industry last year, but William Hill has not yet been able to take advantage of the move. Finances have also been hit by the firm having to close the doors of its casinos in the US – it is unclear when they might be able to reopen their doors.
Why is William Hill in particular struggling in 2020?
William Hill’s problems are not just due to the coronavirus, of course. What is clear is that the arrival of the global outbreak has merely sharpened the issues already facing the company.
One theory behind William Hill’s struggles this year is that the company has not done nearly enough to push its online casino business, instead focusing on its old-school sportsbooks.
Ryan D. from Headlinecasinos.com says: “If William Hill allocated more resources into its online casino business they would be hit a lot less. Its left to be seen how they are going to survive 2020.” Of course, William Hill is not the only bookmaker finding life hard right now, but their lack of a coherent online casino strategy appears to suggest they have been hit worse than others.
As well as the loss of major sporting events like Euro 2020, the absence of the Premier League has reduced income spectacularly for William Hill over the course of the past few weeks.
What is William Hill doing to arrest the slide?
While it might now be too late to launch a world-leading online casino, strong measures are being taken by William Hill to try to protect the future of this classic bookmaker brand.
Last month, the firm announced it would be suspending the dividend until further notice, while measures such as reducing its variable cost base and other mitigating activities are ongoing.
Ulrik Bengtsson, chief executive of William Hill, said in a statement that the coronavirus crisis was resulting in an “unprecedented” situation for bookmaker businesses such as his own.
“People want to place sports bets and they will continue to do so where possible. In recent days we have seen betting on horses, greyhounds, international football and our well-established virtual sports,” he said.
Bengtsson also pointed out that William Hill has been operational for 86 years, with the company’s board doing all it can to ensure the company stays alive during the crisis. However, William Hill has warned the company might sustain a £110 million hit to its takings in 2020.
Whether or not William Hill goes to the wall remains to be seen, with the coronavirus crisis continuing to grow and posing particular problems for companies in the gambling industry.