£20m: Punter payday

Gambling industry hit as margins squeezed over festive period
Thursday 12 Jan 2017 Author: William Cain

Customer-friendly sports and horse racing results over the festive period proved a payday for gamblers but will shave £20m off William Hill’s (WMH) 2016 profit.

William Hill rivals Ladbrokes Coral (LCL) and Paddy Power Betfair (PPB) could also see a squeeze on gambling margins if the trend proves widespread.

Retail gambling margins at William Hill were 14.5% in the last nine weeks of 2016 versus an average of 17% to 18%. Fourth quarter margins in the gambling industry are usually higher than the rest of the year and the failure to match this trend contributed to William Hill’s surprisingly large downgrade to profit, now expected to come in at around £260m.

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