Betting firm William Hill today predicted lower full-year profits for 2018, despite efforts to take advantage of the legalisation of sports gambling in many states in the US.
Operating profit is predicted to come in between £225m and £245m by the end of the year, compared to operating profit of £291.3m for 2017.
The firm's share price fell by over five per cent in early morning trading.
While online revenue is up four per cent for the year to date, betting shop sales are down four per cent, William Hill said in its trading update.
It blamed weaker football and racing betting margins, including three loss-making horse racing weeks over summer, while its betting shops have suffered similar high street blues to other retailers.
The company’s strongest growth came from the US, where net revenue was up 36 per cent for the year so far after the US Supreme Court struck down legislation banning betting on football, baseball, basketball and other sports in most states earlier this year.
The decision could legalise sports betting nationwide as individual states draw up their own legislation, and William Hill is one of a number of British firms to head stateside to take advantage.
So far it has opened 18 new sportsbooks in the US and launched a mobile app in New Jersey, with a new sports betting platform to go live in 2019.
“Our goal is to be in every state,” said Philip Bowcock, chief executive. “Supported by the extensive experience of our US existing business in Nevada, we're building a network of market access agreements, including our strategic partnership with Eldorado, expanding our relationship with Golden Entertainment and exclusively partnering with IGT for sports lottery opportunities.”
While online accounts are up 11 per cent for the year to date compared to the same period last year, regulatory and tax changes are set to weigh on digital profit growth this year and next – reducing profit by £20m this year and £25m in 2019.
“We are continuing to experience a period of significant change for our industry and have already made important changes over the last two years to transform our digital business, broaden the management team and enhance our financial flexibility ahead of key regulatory changes,” said Bowcock.
He pointed to William Hill’s proposed £242m acquisition of Mr Green to help diversify the company’s income and become a more digital and international business.
The proposed acquisition of Mr Green will accelerate the diversification of William Hill into a more digital and international business. At today's Capital Markets Day, we will lay out our medium- and long-term strategy to respond to the latest challenges and opportunities and to successfully build William Hill into a digitally-led, diversified and sustainable gambling business."