William Hill Succeeding In Overcoming Obstacles That Cause Ladbrokes To Stumble
The largest British bookmaker William Hill has just released their2013 earnings and the number show why they are the leading gambling company in the UK. As reported the two main challenges facing British bookmakers are the proposed offshore betting taxes and the imminent crackdown on fixed odds betting terminals or (FOBTs). The recently released 2013 figures for Britain’s second largest bookmaker Ladbrokes were less than impressive to say the least and have lead for calls for the CEO to be sacked if things don’t turn around by the Soccer World Cup in Brazil.
William Hill is still dependent on the revenues from FOBTs as they make up something in the region of 26% of their earnings which is a lot less than the estimated 40% of Ladbrokes. Instead of complaining William Hill have announced they will cut costs by up to 20% as part of their effort to minimize the impact of the new tax regime for offshore online operators. Estimates are that the loss of their current offshore tax befits will cost William Hill anything between 60-70 million pounds annually. Here again William Hill are choosing to look at the brighter side and believe that being the largest bookmaker in the UK will give them an advantage over smaller companies who will struggle to overcome the new tax bill regulations.
In a statement the company said,” While it will lead to a significant additional cost for the group … we do believe there is potential for larger-scale operators to benefit from increased market share as smaller operators may be squeezed out of the market by the additional tax burden.”
The operating profits of William Hill for 2013 were up 3% from 2012 to reach £335m. This is in stark contrast to Ladbrokes who lost a whopping third in operating profits for 2013 which they largely credit to the technical glitches in their online platform. The share price of William Hill rose 2.8% on the positive earnings to 385.5p. Another major factor in William Hill’s successful winning strategy is to focus on overseas markets like that of Spain and Australia which reduces their dependence on the UK market.