William Hill Cannot Manage Playtech

Its inability to properly manage its joint venture partner Playtech has been earmarked as William Hill’s biggest blunder for the year so far, Britain’s largest bookmaker revealed today.

This news just comes off the back after William Hill took out a court injunction against its partner to protect itself against Playtech forging a comparable deal with its main competitor Ladbrokes. William Hill in a recent interview said it will stay the course and remained “dedicated” to its present joint venture with the software provider. No further details have been provided with regard to the injunction and a future court date.

In October 2008 the joint venture agreement between the two parties was concluded. Playtech retained a 29% stake in the newly created William Hill Online; Ralph Topping William Hill Online’s CEO described this deal as “transformational” at the time. Since then William Hill’s internet player base increased considerably and it reaped massive financial rewards for the software supplier. Playtech said its fourth quarter of the share profit in January from the JV increased by 37% to €30.8m (£26.3m) for the full year in comparison to €22.5m in 2009, jointly with €7m in the fourth quarter of 2010.  In its recent statement William Hill Online said from its overall operating profit of £91.1m (a 22% rise from the previous year) Playtech made in 2010 £26.3m, a 30% rise in contrast to 2009 where it netted a £20.1m share.

In 2010 William Hill Online indicated a surge in its revenue and operating profit growth thanks to its sportsbook performance. Its online net revenue increased by 24% from £203.5m in 2009 to £251.5m in 2010, whereas online operating profit increased by 22% from £74.4m to £91.1m.

Every year thus far amounts wagered in sports increased 57%, together with 114% growth in in-play betting. Net revenue from Sportsbook grew 95% with gross win margin growing from 6.6% in 2009 to 8% last year. WHO said this is thanks to “revamping” its trading approach to in-play and constructive football results, including the World Cup.

Gaming net revenue increased by 5%, online gambling’s growth is described as “good” reaped the benefits from an improved Flash-based product range, on the flip side the internet casino added that its withdrawal from France in June last year impacted on its overall casino revenue. It stated that this was offset by “steady increase” in bingo and an “improved performance” in poker from the second quarter onwards subsequent its anniversary of its migration to Playtech’s i-Poker network.

However, its internet operating profit increased 36%, “indicating the full-year result of the operational extension undertaken in 2009 to support future expansion, amplified staff recompense and our increased marketing investment”, according to the internet casino.

William Hill indicated additional risk factors on the cards for 2011: sterner regulation in internet gambling; over dependence on third parties; inability to take full advantage of UK and international growth in online gambling; unfavourable tax rates and increased horse racing rates as well as the grim ramifications of an unfavourable economic environment.