William Hill shares went down 13% on Wednesday 23rd March after a “weaker than expected online performance“. This sudden drop is suspected to be partly due to an increase of self exclusions during 2016. Another source of issues has been placed with disappointing sporting results.
An increase in self exclusions is a direct effect of the UKGC pushing reality checks on casinos which regularly remind and direct players to self exclusion options if they've been playing on online casinos for an extended period of time. Reality checks like this were made compulsory on all online casinos from November 2015.
William Hill Shares Down
William Hill's losses have been an ongoing problem for the company. Their operating profit in 2015 was down 22% from 2014, reaching £291.4 Million. Analysts had forecast a 2016 operating profit of £307 Million, but it is now expected to fall between £260 Million – £280 Million.
The increasing profit drops have been identified by William Hill as a surge in time-outs and automatic self exclusions during the first months of 2016, after the introduction of the new UKGC rules. A feature of the system is that if players don't respond to the reality check message, they will be automatically excluded from the casino.
Overall, multiple areas of William Hill's business have been suffering, with their online sector alone expected to drop in profits by £20 Million – £25 Million during 2016. Its 2015 profits were already down by 29% from 2014, totaling £126.5 Million.
William Hill noted that self exclusions weren't the only factor, with their sports betting performance singled out as its “worst… results in recent history”. European football and Cheltenham were among the biggest disappointments for William Hill this year.
UKGC Regulation Having An Effect
The UKGC's reality checks and self exclusion regulations are certainly making a difference if they can affect William Hill's shares and profits as much as they claim it has.
It'll be interesting to see if online player time-outs are due to consumers genuinely not understanding the new process, or actual legitimate self exclusions. Only time with the system in place will reveal that.
Whatever the answer is, for now, it's certainly ruffled William Hill's feathers as expressed by the chief executive of the company, James Henderson. “Today's statement reflects the combined effect of our assessment of the impact of recent regulatory changes and unfavorable sporting results including the worst results at Cheltenham in our recent history“.