The partial acquisition of an online lottery company was not enough to stop a 7 per cent drubbing in William Hill's (WMH) shares after the group reported a 12 per cent slump in operating profit to £156m. The UK-focused bookie saw its online operating profit plummet 20 per cent after a 154 per cent rise in the cost of sales, mainly driven by the point of consumption tax introduced last December. Profit from the retail business - which accounts for more than half of group revenue - fell 9 per cent, reflecting last year's store closures and rising costs associated with machine games duty.
The group announced it had acquired 29 per cent of online lottery company NeoGames for $25m (£16m). NeoGames' main focus at present is the US, where four states have started an online lottery and others are expected to follow. Currently, NeoGames only has a presence in Michigan, but the state boasts the highest online penetration of those with online lotteries. It has also made inroads in Europe, including supplying games for lotteries in Italy, Portugal and the Czech Republic. William Hill has an option to acquire the rest of NeoGames that it can exercise after either three or five years.