Britain’s second largest bookmaker chain, William Hill has announced that it plans to close down around 700 of its betting shops before the end of the year which equates to almost a third of its retail estate. The closures will also potentially threaten the jobs of some 4,500 company staff.
The grim news also means that the firm will forfeit £21 million in media rights payments owed to Britain’s racecourses already reeling from an unexpected £17 million drop in Levy Board money that was announced in May.
William Hill’s decision is likely to be the start of a wave of High Street betting shop closures, moves which were forecast by the Association of British Bookmakers (ABB) back in March. Back then, Hill’s annual report predicted the new government initiatives would reduce betting shop sales by up to £100 million and lead to inevitable shop closures, possibly as many as 900 shops.
Given that Ladbrokes Coral, who together own 3945 shops, and Betfred will almost certainly follow suit, that figure looks to have been hopeful at best. Currently, there are 8,400 high street bookmakers and between 2,000 and 3,000 of these are now at risk. Now, following the crackdown, UK bookmakers will only further concentrate their attention towards online gambling.
FOBTs To Blame
Unsurprisingly, William Hill, which has 2,300 shops and 12,500 employees, blamed the closures on the British government’s decision to reduce the maximum stake on fixed odds betting terminals (FOBTs). For those who don’t know, FOBTs are electronic mini-casino machines that allow players to bet on simulated games such as roulette, blackjack and bingo as well as the outcome of virtual horse races. They are considered to be one of the most addictive and harmful forms of gambling.
Labelled the crack cocaine of gambling, in April, the maximum stake for these machines was cut from from £100 to £2, a move designed to help protect problem gamblers and vulnerable people who were able to lose vast amounts of money in a short space of time.
Since the new measures were introduced, William Hill has admitted that they have seen a steep decline in gaming machine revenues which was to be expected. Before the cut, William Hill shops, along with other bookmaking firms, were reliant on these machines – which brought in around £1.8 billion in 2018 – for over half of their turnover. Over the past half-decade, revenue growth on the high street has flatlined and the last thing keeping a lot of bookmakers open were FOBTs, so the stake reduction was always likely to prove a tipping point.
A spokesperson from William Hill said;
“William Hill has entered into a consultation process with retail colleagues over plans to close around 700 licensed betting offices. This follows the Government’s decision to reduce the maximum stake on B2 gaming products to £2 on 1 April 2019. Since then the company has seen a significant fall in gaming machine revenues, in line with the guidance given when the Government’s decision was announced in May 2018.
British Horse Racing Hit
British Horse Racing, who receive a significant amount of tax and duty from betting shops, is also likely to feel the impact of betting shop closures. The industry now faces the loss of £30,000 per shop in annual media rights payments. This applies not just to the Hill’s doomed 700, but also to the many more that are sure to follow. The British Horse Racing Authority (BHA) have estimated that the likely annual loss will be around £50 – £60 million.
With Levy income also in decline, prize money will inevitably drop also. As much was evident earlier in the year when the Arena Racecourse Company (ARC), who operate 16 courses including Chepstow, Doncaster, Great Yarmouth and Royal Windsor, announced a £3 million cut in its 2019 prize fund in a pre-emptive move against the inevitable drop in media rights income that was sure to come and has now arrived.
At the time, the move was hit with fierce opposition from owners, trainers and jockeys, all of whom have benefited from FOBT boosted prize funds in the past. Together, they threatened to boycott all ARC tracks, forcing them into a backdown. Only last week at the Racehorse Owner’s Association AGM, a leading figure announced, “if they think we’re going to go back to racing for three grand at Lingfield, they’re wrong”.
