William Hill blames tax changes as profits fall 35%

WILLIAM HILL on Friday reported a 12 per cent fall in profits for the first half of 2015, with the government’s increased tax regime on the gambling sector blamed for the drop.

MGT targets controversial fixed-odds betting terminals that allow gamblers to play casino games such as roulette and have been labelled as the “crack cocaine” of gambling by opponents, who say they are addictive and can easily allow punters to quickly lose large sums.

James Henderson, chief executive, said: “We have delivered a good operational performance in the past six months during a period of significant regulatory and taxation change for the industry”.

With profits down £21m, the new point of consumption tax and the increase in machine games duty were highlighted as major contributers, with the cost of both put at £44m.

Higher taxes on betting and gaming have sent profits at William Hill tumbling by more than a third.

He said his Project Trafalgar, to build up a proprietary online system and in-house expertise to rely less on third-party developers, was making excellent progress, but the company is still seen to be lagging rival Ladbrokes despite Hills’ claims to be the “leading UK online operator”. “In UK Retail, we anticipate some further impact from the £50 journey during the second half”.

William Hill also said it had bought a 29.4% stake in online lottery firm NeoGames for $25m (£16m).

Henderson added: “I am particularly pleased with our move into the emerging online lotteries market, which will support our global diversification”.

Interim dividend of 4.1p per share, up 2.5%, reflecting the Board’s continued confidence in the outlook for the Group.

William Hill has the option of acquiring the remaining 70.6% of NeoGames after either three or five years.