Wlliam Hill confirms move for online gambling operations
Posted by Bev Freeman on 07 Aug 2009 at 09:08
William Hill has confirmed early reports the bookmaker is to move its online gambling operations offshore to Gibraltar.
The Times reports the company is to carry out the transfer as it bids to save tax and racing levy reductions to the tune of around £10 million.
Ralph Topping, chief executive of the firm, said earlier this week the company was planning the move, which other bookmakers could be tempted to consider.
The Times added Ladbrokes may also ponder a move, although Coral is expected not to move while the Department for Culture, Media and Sport continues its review of remote gambling.
The paper added Mr Topping has said Britain's rising unemployment and a tendency from consumers to tighten their purse strings were becoming a factor in the online betting industry.
William Hill has said it could save around £7.5 million in profits tax and around £1.5 million in levy payments per year.
Mr Topping has also said horseracing as a sport needs to modernise in order to maintain its appeal.
Quoted by the Times, he said: “The reality is it’s turgid fare. The industry needs to modernise the sport. It’s going to go the same way as the Yeti if it doesn’t watch out.”
He has also said the offshore transfer was decided upon after looking closely at how online betting had impacted his company's telephone betting service, saying the format had a 'bleak' future.
Phone betting now constitutes about four per cent of William hill's business, compared to around 15 per cent a few years ago.
Britain's bookmakers have been arguing for a level playing field when it comes to tax, noting how those based offshore pay far less than 15 per cent onshore companies have to pay.
The Times also reported Mr Topping was somewhat sceptical of the ongoing review by the Department for Culture Media and Sport.
He said: “Lobbying has got us nowhere. Being in the DCMS doesn’t work in our favour. I think if you’re a serious business you should be in a department that deals with business.”
The paper also quoted a spokeswoman from the government as saying it was 'disappointed' to hear the company was looking to move online betting offshore. She also said the DCMS review was designed to get a fairer deal for operators which are based onshore while ensuring continued consumer protection.
Mr Topping has also said that the transfer is not only about tax but also related to the international potential of William Hill online.
He has not ruled out a move offshore for the company's telephone betting service, which could pose a question mark over 400 jobs at call centres based in Leeds and Sheffield.
According to the paper, he added:“There are options open to us and one is to cut down on costs. If the decline continues I wouldn’t rule out closing a call centre, and I’m not ruling out moving offshore.”
William Hill runs around 2,300 betting shops and has said profits are expected to be below expectations for the year thanks to the ongoing economic slowdown.
It recorded a nine per cent drop in adjusted pre-tax profits for the first half to £103.1 million.
It also registered a one per cent drop in retail revenues to £393.2 million for the six months to June 30.
This was blamed on results in May in the football season when the big four premier league teams of Manchester united, Chelsea, Liverpool and Arsenal kept on winning, alongside unfavourable horse racing results in March and the cancellation of some meetings early in 2009.
Mr Topping said he would wait until the season had started properly before predicting how betting would be impacted by the recession.
Quoted by the Independent he said: "Football does bring people into betting shops and we expect a lot of interest this season now there is a fifth force in Manchester City.
"As a consequence of the first-half performance, the difficult July and the uncertain economic environment, we anticipate that our profits for the full year from the retail channel are likely to be lower than expected."
Online revenues for William Hill were up by 58 per cent to £100.1 million pounds, propped up by its acquisition of Playtech, which runs gaming sites.
