- Bookmaker says online account suspensions accelerated markedly
- Shares fall as much as 14% as profit set to miss estimates
New rules making it easier for online gamblers to take a breather from their betting accounts are hurting profit at William Hill Plc, and the pain is set to intensify.
Britain’s biggest bookmaker said Wednesday that profit for the year will be below analysts’ estimates, weighed down by a “marked acceleration” in the number of accounts being suspended at the holder’s request. Losses incurred at last week’s Cheltenham horse-racing festival are also contributing to the projected earnings shortfall. The shares fell as much as 14 percent to the lowest in four months.
Late last year, the U.K. Gambling Commission started forcing online gaming companies to let gamblers exclude themselves from their account via the website, rather than having to contact a call center. Timeouts have increased 50 percent since the start of the year, with about 3,000 accounts a week being affected, Chief Executive Officer James Henderson said on a conference call Wednesday.
The suspended accounts have so far cut profit by about 2 million pounds ($2.8 million), Henderson said, though the bookmaker expects them to reduce earnings for the year by as much as 25 million pounds.
William Hill shares fell 12 percent to 324.5 pence at 1:12 p.m. in London.
The Cheltenham event was costly for bookmakers, with many winning favorites making it a week to forget for the odds-makers. The industry as a whole lost about 60 million pounds, and William Hill was down on all four days, Henderson said.
The impact was felt most in the company’s online business, where gross win margins are 1.9 percentage points below expectations, William Hill said.
The bookmaker forecast 2016 operating profit of 260 million pounds to 280 million pounds, compared with analyst estimates of about 308 million pounds.
Separately, William Hill also said it’s in advanced talks to invest in OpenBet, a gaming software provider.