Profits for Tom Waterhouse's William Hill Australia plunged in the first six months of 2017 and its results could be further affected by pending regulatory changes, the group's global owner revealed.
Operational profit for the Australian arm of the London-listed William Hill, headed by Mr Waterhouse since his eponymous betting company was acquired by William Hill in 2013, fell 85 per cent to only $1.1 million in the six months to June compared with the previous corresponding period.
The result was despite a 28 per cent rise in the amount wagered by Australian punters with the group to $1.48 billion.
William Hill management described the local performance as "disappointing" in a statement to the market on Wednesday afternoon Australian time, and admitted the wagering growth "did not translate into the expected revenue growth [due to] weaker gross win margins".
The Australian performance was also hit by an end to the controversial "click to call" in-play online phone offering, which was banned by the Northern Territory gambling regulator last year.
Costs for the local business, which accounts for about 7.7 per cent of William Hill's global revenue, also increased as William Hill shelled out an estimated $5million-$10 million for exclusive digital vision rights to NSW horse racing.
It also spent more on marketing and offered more free bets in the first half of the calendar year to support its Australian Open tennis sponsorship deal.
"We expect performance to improve, benefiting from the additional content and product innovations we launched in the first half," William Hill said. "In the second half, we are also launching new products that gamify the betting experience and increase the frequency of betting opportunities."
The company also said it expected better results from its daily enhanced betting odds service Price Pump, and the William Hill Rewards program, for which points are redeemable as bonus bets and Velocity frequent flyer points.
William Hill management said the mooted end to credit betting – part of the federal government's review of the Interactive Gambling Act – will hit the business, revealing that about 30 per cent of amounts wagered in Australia come from customers betting on credit.
"If the IGA Amendment were passed into law with this new proposal, companies currently offering credit would be given a six-month transition period to wind down their credit betting activities," William Hill said. "We are focused on ways to mitigate the effect of this change through alternative funding methods."
