FTSE set for subdued end to the week, William Hill rolls the dice on US expansion

Friday, August 9, 2019 - 09:30

“Fears of renewed turmoil in Italy helped push the FTSE 100 on to the back foot in early trading on Friday, surrendering some of Thursday’s gains. “Sterling was also in the red ahead of UK GDP data and one company counting the cost of the weak currency was travel outfit OnTheBeach which warned on profit thanks to the increase in prices necessitated by the plunge in the pound,” says AJ Bell Investment Director Russ Mould.

William Hill

“Investors appear prepared to take the long-term view on bookmaker William Hill after first half profit was hit by a crackdown on fixed odds betting terminals and investment in the US.

“While America has often been a graveyard of UK corporate ambitions, think Tesco’s failed Fresh & Easy venture, the UK gambling sector is seen as being well placed to take advantage of the opening up of sports betting across the pond, even if it has made a slowish start.

“The industry arguably had its fingers burned before with online betting in the States but there are hopes for a more successful outcome this time.

“William Hill’s joint venture with US-based Eldorado effectively provides it with a licence to operate and the latter’s merger with Caesars Entertainment could have a major benefit to William Hill as the scale of the enlarged business would be material, with 60 casinos across 16 states.

“William Hill is entitled to operate mobile sports in states where Eldorado obtains a licence, as well as to exclusively operate sports books in the acquired casinos.

“While the US is all about expansion, the UK is likely to continue to be a story of retrenchment as the company shutters a large number of its high street premises.”

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The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.