(Reuters) - Bookmaker William Hill (WMH.L) posted annual profit at the top end of the company’s expectations on Wednesday on favourable sporting results at the end of the year but said further UK regulatory changes were likely to weigh on results this year.
The UK government last month banned the use of credit cards to place bets, following up on moves to slash maximum stakes on popular high-speed slot machines as it seeks to combat gambling addiction.
Britain’s industry regulator is also considering putting limits on the amount consumers are allowed to bet online after a cross-party group of lawmakers called for a raft of measures to overhaul online casinos.
The gambling firm, which takes around 5% of its online UK deposits through credit cards, said it expects the credit card ban to hit adjusted operating profit by another 5 million to 10 million pounds ($6.50-$12.99 million).
Shares in the company fell 4.5% to 169 pence as of 0944 GMT.
The changes, and a more general shift towards online betting, led William Hill to close 713 high street stores last year and pivot towards the United States, where a Supreme Court ruling has lifted the federal ban on sports betting.
The company signed an online deal with CBS Sports earlier this month and it said it was on the verge of launching in another eight states, up from the nine states where it currently operates. Chief Executive Officer Ulrik Bengtsson said he expected to break even in the country in 2020.
“We move into 2020 in a stronger position,” Bengtsson said. “Almost a quarter of revenue is now generated outside the UK compared to 15% in 2018,” he said.
The company’s adjusted operating profit fell 37% to 147 million pounds, at the top end of the 143 million pounds to 148 million pounds range it had guided to earlier.
“But with its chips heavily staked on the American market, William Hill will be crossing fingers and toes that there aren’t any regulatory setbacks here. The U.S. presidential election in November is a possible risk factor to watch,” AJ Bell investment director Russ Mould said.
William Hill said U.S. net revenue increased 38% for the year ended Dec. 31.
“It’s not all doom a gloom though ... We suspect the growth in the U.S. sports betting market is only just getting started and as things stand William Hill seems well placed to benefit,” Hargreaves Lansdown analyst Nicholas Hyett said.
Reporting by Tanishaa Nadkar in Bengaluru; editing by Patrick Graham and Emelia Sithole-Matarise