When William Hill’s Chief Executive Ralph J. Topping announced the company’s interim results in July he stated that he wanted the online division -- both betting and gaming -- to make a greater contribution to the overall business. He also revealed that just 10 percent of the online business came from non-British customers. What role then is there for international markets in boosting William Hill’s online revenues?
Compared to Ladbrokes, its longtime rival in the country, William Hill has been seen as more cautious in its approach to international markets. Indeed, Mr. Topping himself seemed to reinforce this view in characteristically forthright fashion shortly after he was appointed chief executive in February 2008. Discussing possible ventures in the Far East, where Ladbrokes is already active, he told The London Times, “I live in the real world. You’ll never catch me in a canoe up the Mekong Delta. We’ll focus on what we’re doing and doing it well.”
If Asia is off the William Hill agenda for the moment, then attention naturally turns to the markets of Europe as a source of new revenues. In 2005 William Hill signed a joint venture with Demco Group to investigate opportunities in Southeastern Europe, in particular Greece and Turkey. But, according to its Web site, the company has stopped offering its betting and gaming products to customers in Turkey, unlike another of its online competitors, Sportingbet, which is persevering in the market for the moment despite the recent arrest of two local employees. There has been little report on the performance of William Hill’s Greek business in recent financial announcements.
Elsewhere, Hills' caution is also seen in its restrictions on Dutch clients who can only bet on a limited number of sports, and in Germany, from which no bets are taken at all. In the longer term this conservative approach to European markets, several of which are facing European Union infringement proceedings for their gambling monopolies, might actually work in William Hill's favor. If governments in the likes of France and Germany decide to offer a limited number of online licences, those companies that have not acted illegally (as the governments would see it) by targeting the markets in the past might be in a better position to win one of the licences.
Since selling off its outlets in Italy to Intralot in July, William Hill’s Italian Web site has also been taken down and it does not accept Italian bets through its international dot-com Web site. For those companies that have sufficient scale and the right partnerships Italy could well become a very lucrative market. But William Hill has not been alone in finding the market a difficult one in which to operate.
At the moment it would appear that most of the company’s international eggs are sitting in its Spanish basket, so it is no surprise that Hills has a Spanish version of its online bingo product. In addition, it is establishing a network of betting shops under its Victoria brand in Madrid and the Basque regions to complement an Internet service, similar to its situation in the United Kingdom.
Under Mr. Topping’s leadership, however, there are indications that the company might be altering its approach to international markets. Speaking to the United Kingdom's Daily Mail in July 2008 Mr. Topping explained, “We can no longer rely on just being a retail UK betting shop business . . . I live by the maxim that it is better to seek forgiveness than permission.” It will be interesting to see how this maxim manifests itself from an operational perspective.
Amidst all the talk of William Hill being too United-Kingdom-centric and of operational problems with its sportsbook and online poker room it is easy to forget that it still converts over 40 percent of gross win from its online division into operating profit, something that several of its Internet rivals can only dream about.
Some 200 years ago Napoleon said of China, “Let China sleep. For when China wakes, it will shake the world.” In a way William Hill is the China of the online gambling industry (although with fewer people). It was quick to see the potential on Internet betting, taking its first bets online a decade ago in 1998. But in the last few years it has had a period, if not of dormancy, then of a lack of direction as business developments were put on hold while the company waited for the now aborted Next Generation platform.
William Hill’s competitors in the e-gaming sector should have made the most of these years because, if the company can get its act together once its new Orbis platform goes live in November 2008 and its poker issues are resolved, then it will surely begin to claim a share of the online market befitting its size, history and reputation.