William Hill gaming gets slammed by Point of Consumption Tax (POCT)
It was confirmed earlier this week that bookmaker William Hill’s operating profit before costs, fell 19% during the first quarter, due to an increase in gambling duties. With a trading update covering 13 weeks from December 31st, 2014 to March 31st , 2015, William Hill operating profit dropped due to an additional $29.9 million dollars in duties, resulting thus from the United Kingdom point of consumption tax (POCT) which was introduced in last December with an overall increase in machine games duty costs introduced earlier in March 2015.
William Hill group revenue has improved slightly by 1%, while its retail operations remained down. The first quarter also revealed shocking losses for William Hill’s online and Australian entities, with operating profits falling 38% and 39% for each division respectively. The company was however able to record a slight increase in operations. Although its retail and Australia businesses having endured year-on-year losses of 2% and 11% respectively, the William Hill online division saw a visible revenue increase of 9% year-on-year while revenues from the company’s US market was up by 10%.
Chief executive officer of William Hill, James Henderson, commented: “As expected, group operating profit was impacted by a £20 million increase in gambling duties following the introduction of point of consumption tax (POCT) in December 2014 and the increase in the machine gaming duty rate in March 2015. “However, we are well positioned to benefit as the United Kingdom online market evolves following the introduction of point of consumption tax (POCT), with our ongoing technology investments expected to benefit both product and customer experience and with a substantial marketing commitment.
“William Hill United States continues to perform strongly, with wagering on a local currency basis 30% ahead of last year. “Looking forward, as the end of the football season draws closer, we have not as yet made up the shortfall arising from the £14 million loss in Week 3 given the relatively weak first quarter sports betting margin.
“Outwith sporting results, we are making good progress on our key projects for the year, including in-house development of our responsive design front-end through Project Trafalgar, an enhanced bonus engine to further increase the competitiveness of our proprietary Vegas casino platform and the completion of our Eclipse machine roll-out in Retail.”