William Hill’s Australian arm incurs big decline in operating profit

UK bookmaker William Hill suffered a 19 percent decline in operating profit in the first quarter due to a new point of consumption tax in the UK, with the company’s Australian arm hardest hit.
Operating profit for the first quarter of the year was down £16 million ($24 million), compared to the same period last year following an additional £20 million cost from Point of Consumption Tax and increased rate of Machines Games Duty, which now stands at 25 percent.
William Hill’s online and Australian operations incurred operating profit declines of 38 percent and 39 percent, respectively. The Australian division saw a 22 percent drop in sports betting amounts wagered.
The company said it successfully migrated Sportingbet customers to williamhill.com.au though the reshaping of its client base affected wagering levels.
“Wagering reduced 20%, primarily affected by the reshaping of the client base following the increases in race field fees in July 2014. Net revenue fell 8% as the improvement in the gross win margin from 8.7% to 10.2% did not fully offset the wagering decline and free bets increased as planned following the launch of the William Hill brand.”