Gambling crackdown hits William Hill profits

The Government’s gambling crackdown has disappointed investors in William Hill, as the company downgraded its full-year profit expectations.

Shares in the FTSe 250 betting giant slumped 6pc, or 12.9p, to 200.7p as it said operating profit would be in the range of £225m to £245m, well below analysts’ expectations of £260m.

This is because William hill’s online operations, which contributed 40pc of revenue in the first half of the year and were growing fast, will be hit by the regulation.

The Gambling Commission has increased penalties for firms that are not actively attempting to prevent money launderers and addicted gamers from using their sites.

In last month’s Budget, Chancellor Philip hammond announced plans to increase the tax paid by gambling companies which serve British customers but base their operations offshore. It will rise from 15pc of profits to 21pc.

The Government is also planning to cut the maximum amounts people can gamble on fixed odds betting terminals, which are highly profitable gambling machines based in high Street bookmakers’ shops.

There are already signs that the changes are biting, though revenue generated by William hill’s online business climbed 4pc over the year to date, the amount it pulled in between 27 June and 23 October slid 5pc compared to the same period last year.

Nicholas hyett, analyst at hargreaves Lansdown, said: ‘Regulation requiring increased due diligence on online customers and higher rates of tax mean profits from the online business are set to head backwards this year, and next as well.’ William hill is placing its faith in the US. early entrants to the massive US market, where sports betting has only recently been allowed, stand to make a hefty sum. But hyett added that as more european bookies look to grab their share of the American pie, William hill could come up against some stiff competition. On the FTSe 100, insurer Direct

Line climbed despite announcing a drop in policy numbers and premium income, or the amount customers must pay for their insurance policy. Total premiums fell by 5.8pc to £854.5m, largely due to a 92.6pc fall in policies written under the Sainsbury’s and Nationwide brands. Paul Geddes, Direct Line’s chief executive who is due to step down next year, said the results were ‘robust in a competitive market’. Shares edged up 1.5pc, or 4.7p, to 322.7p.

But the mediocre gains proved too little to lift the FTSE 100, which dipped 0.9pc, or 63.2 points, to 7040.7 points.

BT weighed on the blue- chip index, as government officials sent a letter to telecoms companies warning that they needed to be careful around the security of their new 5G mobile networks.

The Government launched a review of the UK’s telecoms infrastructure this summer.

Its security concerns may affect BT, which has used equipment from Chinese company huawei for its 5G test network. Shares fell 4.5pc, or 11.8p, to 251p. Shared office space company

IWG soared as chief executive Mark Dixon confirmed he could sell the property portfolio.

This would leave IWG with the Regus and Spaces serviced office brands, which would then focus on partnering with office block owners in a franchise model.

IWG slid in August after takeover talks with three potential bidders, including private equity firm Terra Firma, fell through.

But shares climbed 7.6pc, or 17.9p, to 254.8p, helped by strong third- quarter figures. Revenue grew by 13.2pc across all its open centres, and it said it had opened 204 locations in the year to date.