Australia’s tough regulatory stance on gambling has caused British bookmaker William Hill to start a strategic review of its Australian business and consider a possible sale and exit from the market.
The move comes as Australia is imposing a ban on bookmakers offering lines of credit—in an attempt to protect problem gamblers—and as several Australian states are considering imposing point of consumption taxes on gambling operations.
“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure,” officials for the group said in a press statement.
The company said it is considering a sale in a note to the FTSE 100 on Monday. The group said it was considering the sale despite having a “solid” year, but also said an alternative would be to seek consolidation with another Australian-facing gambling company, according to a report in the UK Financial Times.
Australian Treasurer Scott Morrison has said he wants to introduce a “nationally consistent” point of consumption tax to “harmonize” the taxes gambling companies pay across the country. If adopted, bookmakers would pay a 15 percent tax to each individual state on all bets taken from players within each state. Currently, they pay a percentage of gross gaming revenue to the state where their operations are licensed and based, according to the Times report.
The group also said it has seen profits decline due to the line of credit ban.
Still, William Hill recently announced that adjusted profits across all operations came in above forecasts and were 11 percent better than last year. The company’s Australian business brought in about 7 percent of its overall revenues at $2.2 billion in 2017, the Times reported.
Rumors of a possible sale of William Hill Australia began in September after former Chief Executive James Henderson left the group, but officials said at the time that the speculation was “completely untrue.”
