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Welcome to the News desk. |
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William Hill sells Italian venture to rival |
3/7/2008 |
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Simon Bowers
William Hill has withdrawn from Italy after 18 months, writing off
£1m and agreeing to sell its embryonic joint venture. The move comes six
months after the bookmaker was forced to write off £26m as it ditched an
in-house betting software development programme.
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Ralph Topping |
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New chief executive Ralph
Topping is also planning to overhaul William Hill's underperforming online
poker operation. The poker business, which has struggled to increase player
numbers, is a major licensee for software firm CryptoLogic but an exclusive
deal between the two comes up for renewal at the end of the year. Topping is
considering switching to one of a handful of poker network providers that are
increasingly dominating the industry, offering hundreds of millions of dollars
in prize money every month.
Italy, along with parts of Spain, has been
targeted by several British bookmakers as the government has begun to
liberalise its betting shop industry. Gala Coral's Eurobet has 403 shop and
kiosk licences in Italy while Ladbrokes has 142 licences and has acquired 25
already trading betting shops.
About 12,000 Italian licences were granted in 2006, adding to about
1,000 existing sites, but William Hill's joint venture with Spanish gaming firm
Cordere won only 57. Yesterday William Hill, which has managed to open no more
than a couple of Italian betting shops, said the operation was "insufficient in
scale to provide an attractive long-term return". It has agreed to sell the
joint venture to Turkish rival Intralot for 5.5m (£4.3m).
The UK bookmaker will make a £1m write-off as it exits Italy. It
remains committed to its joint venture in Spain with Cordere, which trades as
Victoria, though European expansion will not be a priority while the group
focuses on returning its struggling online business to growth.
Topping,
has been reviewing priorities for Britain's largest bookmaker and believes the
online business will eventually generate 25% to 30% of group gross win (balance
of earnings after paying out winnings). Within that, online gaming - including
poker - is expected to overtake conventional betting.
William Hill's
online division last year saw gross win slide 8% while operating profit fell
17% as the website lost to competitors. The group has brought in software firm
Orbis to upgrade betting capability and the revamped website will be launched
in November.
Meanwhile, Topping is believed to regard the group's
current online poker deal with CryptoLogic as unsustainable. He is seeking to
pool player numbers with other smaller online poker businesses in to compete
with larger players. If a collaborative solution is not found, William Hill
will sign up with a large poker network provider.
London-listed
Playtech is believed to be a contender to succeed CryptoLogic. The number of
players on its iPoker network overtook numbers playing with PartyGaming's
PartyPoker, making iPoker the third largest poker liquidity pool after
PokerStars and Full Tilt which continue to take bets from the US despite
introduction of tough anti-online gaming laws.
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