Fit for the future

Marketplace

William Hill has been operating Licensed Betting Offices (LBOs) since 1966 and is one of the oldest brands in the market with a visible high street presence. The number of betting shops reached a peak of c16,000 in the 1970s and since then has more than halved to the 2019 level of c7,200. The LBO market has consolidated and four companies now account for 92% of shops.

We operate on-course betting shops at 36 of the 59 racecourses across the UK, providing an outstanding service to c6 million racegoers each year. This presence has a positive feedback loop to the rest of the estate, with winning bets from the Cheltenham Festival cashed in at c600 of our shops across the country. On-course betting shops provide additional staking for the home track, as c40% of staking is on races taking place at other tracks.

The LBO sector has proved resilient in the face of change. Despite the rapid growth of digital gambling, betting shops have remained a popular place for our customers to place a bet. The betting shop is an established part of the high street, where people can build individual bonds that sustain over time.

Nevertheless, 2019 was a year of unprecedented structural change across the UK LBO landscape. In 2018, the UK Government, as part of the Triennial Review, announced that the maximum stake on B2 gaming products would be limited to £2. Following the Triennial Review, we highlighted the significant impact the implementation of the £2 stake limit would have on Retail revenues, for both William Hill and the broader industry.

Strategy

Since April 2019, retail operators have adopted a variety of strategies to manage the impact of the £2 stake limit. At William Hill, we took decisive action to remodel the UK Retail estate to ensure we have a robust, profitable and sustainable footprint with strong foundations for the future.

We adopted a strategy designed to remodel the estate with a range of mitigating activities. Following a full consultation, we made a decision to close 713 shops with the intention to ensure the best possible future for our business, our colleagues and our customers. We implemented a customer-centric approach to support our customers through the impact of the change, and we have remained in close contact with the UK Gambling Commission throughout. In gaming, we were fully compliant for 1 April 2019.

We took an exceptional charge of £95.1m relating to continuing costs incurred as part of the mitigation strategy relating to shop closures, redundancy costs and other costs related to the shop closures. We continue to closely manage the mitigation of our outstanding property exceptional costs, as we maintain our disciplined cash focus in Retail.

Through a rigorous focus on redeployment opportunities, we were able to minimise the number of colleagues that were made redundant and to offer c80% of the people that were affected their stated preference. By ‘doing it once’ and ‘doing it right’, we have given certainty to our employees, simultaneously adjusting the Retail management and support structures, enabling us to once again focus on the future.

Commitment to safer gambling in Retail

As a regulated industry, betting shops provide a positive environment for safer gambling activities. Our colleagues are regularly trained to identify potentially harmful gambling behaviour and to engage with customers to encourage safer gambling. In 2019, colleagues in William Hill shops received c95,000 hours in total of training, of which 10% was specifically spent on safer gambling. We partnered with social enterprise, BetKnowMore, and youth gambling charity, YGAM, to review and update our safer gambling training for front line colleagues. Furthermore, nearly 8,000 hours were dedicated to the implementation of revised staking limits in response to the Triennial Review.

As a Group, we are actively involved in industry bodies and Retail is utilising technology wherever possible. We are working hard to promote responsible behaviour, including the use of algorithms during play on gaming machines and trialling facial recognition technology as a means of preventing self-excluded customers from gambling.

Fit for the future

We now have greater certainty in two key areas of our business. Firstly, the impact of the £2 stake limit has been broadly in line with our expectations, with both gaming substitution and sportsbook staking ahead of our model. Secondly, early indications are that the migration of William Hill customers from our closed shops to our remaining estate has been ahead of our expectations.

Looking to the future, we are well positioned and see opportunities ahead of us. We invested significant effort preparing for the regulatory changes and in closing the shops themselves. Our remodelled estate is now in a position to deliver a sustainable profit, and will continue to generate the cash required to help fund expansionary plans elsewhere in the business. We are optimistic that now we are refocused on the day-to-day running of our estate, we will be able to drive incremental gains across the business.

Self Service Betting Terminals (SSBTs)

Our proprietary SSBTs continue to be a real success story for William Hill and enable us to bring more of the choice and breadth of markets experienced by our Online customers into our shops. We now offer 19 sports to bet on, including in-play, have over 3,700 machines across the estate, with density increasing from 1.6 to 2.4 per shop and the average amount wagered on each machine per week increased by 17% in 2019. SSBTs now account for 19% of total amounts wagered and over 62% of football amounts wagered.

For a typical 3pm football kick-off on a Saturday afternoon, our customers have the choice of over 320 bets per match, and we take over 160,000 bets on an average Saturday solely on our SSBTs. Other Sports have seen significant growth and continue to be an opportunity going forward, with all sports (with the exception of tennis due to regulatory change) seeing year-on-year growth in staking.

SSBTs are popular with our customers and they will play an important part as we continue to improve our customer experience and offers. In 2020, we will remain focused on the functionality and user experience of these machines as we look to the future.

Retail strategy

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Growing UK market share

We believe that LBO customers are looking for an entertaining and engaging experience, ranking convenience as their main reason to bet in LBOs per se and location and customer service as the key reasons for choosing a particular LBO. We have focused on the quality of our customer service, our product range – particularly in football – and technology innovations to bring customers an attractive and differentiated offering.

The William Hill experience

In an industry where there are so many competitors offering similar products both over-the-counter and on gaming machines, William Hill differentiates itself by having the best people in customer-facing roles.

The face of William Hill is brought to life by our many outstanding colleagues in our shops. Our people are always ready to help our customers and provide an experience that is not just enjoyable, but amazing.

Our teams benefit from a unique training structure which allows them to become experts in our products. This sets us apart even further from the industry competitors, as no matter what issues arise, our colleagues can be relied upon to provide a solution to earning us the only thing money cannot buy on the high street…trust.

Match all of the above with the fact that our average colleagues’ length of service is 15 years and you know we have great strength in providing customer service and product knowledge. We also feature extremely contemporary designs and technology in our shops, ensuring that our product offering on the high street is second to none.

Our customers can enjoy watching their racing on banks of HD television screens in a majority of our estate, with clearly displayed markets and pricing that prioritises upcoming races and events.

In our estate, almost 400 shops have seen the introduction of the video wall, enhancing the viewing experience to a whole new level through innovation. The video wall offers our customers the ability to watch their favourite sports in cinematic size images and quality, with featured events ranging from horse and greyhound races to virtual and football. The William Hill TV team makes the customer experience even more exhilarating, with cutting edge commentary, focusing on best value promotions on the high street and an overview of market movers on all our products.

Our customers also have the added advantage of seeing televised and sometimes live footage of our world famous pundits. Robbie Savage and A.P. McCoy lead the way to present expert opinions to our customers on football and horse racing.

We provide a further option for our customers to take control of any question they might have with our Price Finder screens. This is a key feature in all of our LBOs, allowing our customers an opportunity to review prices for all major sports and also to check results at the push of a button.

When you walk into a William Hill shop, you can expect to be welcomed on entry with a wave, smile or a friendly hello. There will always be someone on hand to tell you about the shop and to help with any queries, issues or simply how to write out a bet. We also offer a one-stop-shop for our customers in regards to our Self Service Betting Terminals. These stand-alone machines offer our customer the opportunity to bet on sports of all kind from any part of the world, providing an online experience in the shops with outstanding markets especially on worldwide football.

Last but not least are our Inspired gaming machines that feature the best technology on the high street. Allowing our customers to play their favourite games on a machine with four screens. These feature HD touch screens and a smart player panel screen, and are enabled to promote hints and tips on responsible gambling and to provide limit-setting technology.

Why Shops Matter

Retail employs around 9,000 colleagues across the UK. We employ people of all ages and a significant number of colleagues between the ages of 18 and 25 years, plus more than 50% of our Retail workforce roles are occupied by women. We have a diverse and multi-cultural workforce who enjoy an atmosphere that encourages and cherishes people from varying backgrounds and cultures.

When it comes to our customers, we provide a safe, modern and engaging community in which they like to spend their leisure time. For many people our shops are a place to meet friends, both customers and employees.

Our shops are a place where people know your first name and celebrate your birthdays, a place where your opinion counts, a place to share the challenges and success of daily life with a cup of tea or coffee in hand.

We are over 80 years old and we are an integral part of Britain’s high streets and communities. We provide a bedrock for employment in all the locations in which we have a presence, as we recruit locally and many community initiates, including working with local councils and supporting local charity events and programmes.