It hasn't been easy for anybody or any business the last month or so as COVID-19 continues to dominate every aspect of society. One industry particularly decimated by lockdowns and shutdowns is the exploding legal gambling industry in the US as it endures casino closures and the stoppage of nearly all Major Sports around the globe.
Nevada's largest sportsbook William Hill is the latest to issue some dire warnings about how the current state of world has affected projected earnings and the overall viability of their business. Its workers have been furloughed, its credit rating has been lowered and its share prices have been devastated.
A look at the figures
William Hill has been forced to furlough 600 workers in the sportsbook division, more than half of its US operations with more to come if the global situation doesn't turn around soon. 100 shops in Nevada alone have been forced to close and the company was forced to freeze all of its affiliate marketing across the country.
William Hill in the US in 100% reliant on sports – the company has not yet opened up an online casino like they have in Europe where sports accounts for just 53% of its revenues. That means revenues will be next to Zero for the foreseeable future unless they can attract wagers on some obscure pro leagues around the world. Like many competing sportsbooks, William Hill recently said it won’t pay a 2019 dividend, a sign that the company has been dealt a body blow by the pandemic.
Moody’s Investors Service also downgraded the British bookmaker to Ba3, the lowest in Moody’s Ba spectrum from Ba1, while placing the company on review for additional reductions and identifying the company as a credit risk. William Hill share prices have dropped by around 65% in six weeks with little reason to think the slump will turn around anytime soon.
You can't say they aren't trying
William Hill has been on the forefront of finding new wagering opportunities for their clientele. “Put on your creative caps, and search the world to see what’s out there,” Nick Bogdanovich, U.S. director of trading for William Hill, told his bookmaking team. “We’re going to book anything we possibly can.”
William Hill has managed to offer action on Mexican and Australian soccer, Aussie Rules Football Japanese sumo wrestling, Russian chess, Belarusian hockey, Nicaraguan soccer and Russian Table Tennis the last couple of weeks.
William Hill was one of the first sportsbooks to jump on the eSports bandwagon as well, offering odds and taking bets in Nevada on Counter Strike: Global Offensive. That move could realistically set the sportsbook apart from others that have shied away from eSports.
“We have a guy in-house who’s fairly familiar with esports, so we feel pretty good with it,” Bogdanovich says. “We’ll see how it goes now that it’s the only game in town. There will be more eyes on it. We should definitely find some bets.”
William Hill's reality
The US legal gambling industry was in the midst of exponential growth before the world ground to a halt. William Hill reported $125 million in revenue in 2019 and was expected to break even in 2020 largely because of their aggressive expansion plans and the cost associated with it. But breaking even seems like a pipe-dream at this point in time.
With no casino division, William Hill in the US is being forced to rely on sports only to generate revenue and Table Tennis just isn’t doing it. eSports is an avenue open to William Hill but just what kind of overall market it can generate remains to be seen.
William Hill, as one of the biggest European sportsbooks can take solace in the fact that they do have equity, they do have assets, and they do have a plan on how do navigate these troubling times. Cost cuts, staff cuts and an immediate halt to expansion plans will definitely help, but the only cure is our world getting back to normal.