William Hill share price slumps as headwinds hit profit forecasts

William Hill's share price fell sharply on Tuesday as the bookmaker warned profits would be lower than expected in 2018 thanks to tougher regulation.

Full-year operating profit was expected to be in the range of £225 million to £245 million, Hills said, compared to £291.3m last year. Analysts had been expecting a figure of £243m this year.

Chief executive Philip Bowcock said the combination of regulatory changes involving more stringent checks on online customers and tax changes would hit profits in both 2018 and 2019 to the tune of £20m and £25m respectively.

Chancellor of the exchequer Philip Hammond last week announced remote gaming duty would increase to 21 per cent from 15 per cent in October next year, when FOBT maximum stakes will also be reduced to £2 from £100.

Hills have said they will close 900 betting shops as a result of that decision.

The company reported online net revenue for the year to date was up by four per cent. However retail net revenue has fallen by four per cent over the same period.

Chief executive Philip Bowcock said: "Looking at the second half performance so far, we have benefited from the later stages of the World Cup but otherwise football and racing margins have been weaker than expected, including three loss-making weeks on horseracing during the summer and customer-friendly football results during the international break in October.

"Retail continues to be challenged by the wider high street conditions and we have seen gaming as well as sportsbook revenues decline in the period."

New Jersey governor Phil Murphy places the first bet at the William Hill Sports Book at Monmouth ParkCredit: Dave Kotinsky

The United States, where the Supreme Court removed the shackles on sports betting earlier this year, remains an area for expansion for William Hill who reported that in the early months of trading around $200m (approx £153m/€175m) had been wagered, in line with their expectations.

Bowcock said "significant progress" had been made on their plan to capitalise on the emerging US sports betting market and that their goal was to operate in every state.

"I'm pleased to report that we've built on our market leading position in Nevada to make rapid progress in other states as they legalise sports betting, and are the only company to be taking sports bets in the first five states to have regulated," he added.

William Hill chief executive Philip BowcockCredit: Henry Thomas.

The bookmaker last week also announced plans to purchase Swedish-listed online gaming company Mr Green as part of their move to diversify away from the UK market and retail betting.

Speaking before making presentations to analysts and investors Bowcock added: "With more markets opening up to online gambling around the world – including the US – we can build on the heritage of the respected William Hill brand to take a leading position on the gambling world stage."

William Hill leave the betting ring after selling 82 racecourse pitches

Analysts at Goodbody described the update from William Hill as "disappointing", adding: "The performance in online suggests the group is losing share in the UK when compared to recent updates from Paddy Power Betfair and GVC."

Shares in the company fell by as much as nine per cent at one point before recovering to 201.70p - down 5.57 per cent - late on Tuesday afternoon.

Read industry editor Bill Barber for all the latest betting and gaming stories and analysis at racingpost.com/news