William Hill profits plunge 47% as it plans to axe thousands of jobs
Profits have almost halved at William Hill (WMH.L) after the bookmaker was hit hard by a UK government clampdown on betting machines dubbed the ‘crack cocaine’ of gambling.
The company had already announced last month it will close around 700 branches, blaming the reforms as it put 4,500 jobs at risk.
The betting firm saw its profits slide 47% before tax to £50.8m in the six months to July, with significant investment in US expansion also denting earnings.
The government slashed from £100 to £2 the maximum stake on fixed-odds betting terminals earlier this year.
Several bookmakers have become reliant on the machines for a significant part of their profits in recent years, but they have come under fire over claims they are highly addictive and allow users to rack up enormous losses.
READ MORE: Shocked staff in tears as William Hill announces huge cutbacks
One staff member fought back tears after the closures were announced in July as she told Yahoo Finance UK she feared central London branches like hers could be most at risk because of higher rents.
But several customers at two London branches said at the time they welcomed efforts to prevent gamblers becoming hooked and limit their losses, despite their sympathy for staff.
John Eckles, speaking outside the William Hill on Hatton Garden, said: “I think those machines were designed from the beginning to rip people off. They should have capped stakes long ago, nipping it in the bud before it started.
“A lot of men lost their wives, families, homes - they even rob their own children. I’ve met a couple of guys who’ve fallen into debt.
“I play just 20p a spin, but I’ve seen some people lose £8,000 in a day. But I feel sorry for the staff.”
READ MORE: One bookmaker is bucking the trend by not closing stores
The figures from William Hill come days after Flutter, created after the merger of Betfair and Paddy Power, said it was confident it could capitalise on the clampdown as it had been hit less hard than rivals.
Flutter said on Wednesday it would “take advantage” of the storm facing UK bricks-and-mortar bookmakers, expecting to snap up market share.
The company said its earnings from betting on sports events were double those of its rivals, helping it survive on UK high streets while it expects competitors to announce yet more store closures.
Philip Bowcock, chief executive of William Hill, said on Friday: “We are making good progress against the five-year strategy we outlined last year, delivering strong revenue growth in the US and other international markets and positioning William Hill well for future growth.
“In retail we took the tough decision to announce a consultation process over the proposed closure of around 700 shops to protect the long-term future of the business following the introduction of the £2 stake limit.
“The response of our colleagues has been incredibly professional during this difficult time and I would like to thank each and every one of them for that.”
READ MORE: Grieving dad calls for crackdown on online betting adverts
