William Hill Withdraws From Australian MarketTia Winter | 7 March 2018
William Hill crossed the threshold of the Australian market back in 2013 when it acquired Australian interests in Sportingbet, a sports betting company, offering telephone, online and mobile sports betting services to approximately 284,000 Australian punters in the Australian sports betting market.
Considering that the revenue income to be had from this section of the sports betting giant’s business endeavours only made up 7% of its total portfolio, it’s not that difficult to understand the motivation behind the decision, especially when considering the tightening effect that the newest Australian gambling legislation is bound to have on the Australian sports betting market in the near future.
Running At A Loss
It hasn’t been a walk in the park for the bookmaker in Australia. This ultimately resulted in William Hill having had to accept a £238m deficit charge on the total value of its interests in the Australian market, which resulted in the unsavoury business of the bookmaker having had to report a £75m loss during the pre-tax season.
When the 2017 set of financial statements went public, the explanatory notes indicated that the company had taken the decision to review all of its business interests as well as whether or not it was feasible to continue, firstly at all, and secondly, to what extent.
The extreme and immediate nature of a decision of this magnitude almost always follows a proposed shift in the market, and it proved to be true in this case as well, with Australia having proposed a 15% point of consumption tax on all betting activities. This would have had a major detrimental effect on the business portfolio of William Hill, had they elected to continue trading in Australia.
Weighing Up The Options
When a major business decides to part with a large section of its existing portfolio, as was the case here, the question always begs, what now? And where to from here? It seems that in the case of William Hill, two options stand out as being viable.
They could either elect to expand their hold on the market in the United States, a country that is currently experiencing a major surge in the sports betting market, or they could turn their attention to the United Kingdom, where they have existing operations.
The company has cited the recent credit ban as well as the proposed introduction of the 15% point of consumption tax as the combined reason for their decision to exit the Australian market.