International bookmaker William Hill has announced the sale of its Australian business to fellow Australian bookmaker CrownBet, in an A$313.7 million (£175.9m) deal, which ends Will Hills involvement in the Australian betting market.
William Hill first entered the Australian market in 2013, agreeing a £459m deal to acquire the Australian business interests of Sportingbet. The business operates telephone, online and mobile betting with around 284,000 customers throughout the Australian market. In 2017 revenue from the Australian segment of the business made up around 7% of William Hill’s total revenue.
However since then things haven’t gone to plan for the company, culminating in William Hill’s decision to accept a £238m impairment charge on the value of its Australian business which saw the bookmaker forced to report a pre-tax loss of £75m for 2017.
In its 2017 financial results, the company admitted it was “reviewing the future plans for the business, currently considering both organic and inorganic options.” A move which stemmed from the proposed introduction of a 15% point of consumption tax, introduced by many Australian states, a move which would have adversely harmed its profits.
It now looks as though this was the straw that broke the camel’s back for Will Hill, who could potentially reinvest the money into a potentially emerging US sports betting market, a market in which they have been previously involved in with the OpenBet sports betting business prior to its sale to the NYX Gaming Group.
Alternatively they could look to strengthen their existing UK operations, amid consolidation by its nearest rival Ladbrokes Coral and most notably to prepare for any financial impact arising from the UK Governments Triennial Review.
CrownBet themselves have only recently been acquired by The Stars Group, with the poker and betting giant concluding a $117.7m deal to purchase a 62% majority equity interest in the Australian sports betting operator from current CrownBet CEO, Matthew Tripp.
In a statement explaining the decision, William Hill CEO Philip Bowcock said that “The disposal follows a strategic review of the Business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a Point of Consumption tax. The disposal will allow William Hill to focus on continuing to grow our UK Online and US businesses.”