William Hill called for investors to attend a trading update and online review on 23 March. The results at Cheltenham had been awful, the worst in living memory according to James Henderson, William Hills Chief Executive. Then the surprise: social responsibility measures had caused the company to see 3,000 accounts per week self exclude. If that continued for the rest of the year, the impact on profits could be between £20m to £25m.
Previously gamblers wishing to self exclude had to phone the William Hill office, now they can do it online, and the process is just three clicks. In April 2016 gamblers will see pop-up reminders of activity, so they will have a reality check on play. It could encourage further self exclusion.
In GBGC’s newsletter of September 2015 we stated that social responsibility would cost the industry 16% of revenue over 5 years. We repeated the message in October and again in November at MiGS.
Not wanting to let it go in December we said, “Social responsibility requirements will cost the industry 3% in revenue terms or 10% of net profit before tax in 2016, rising over the next five years to 15% in today’s terms and 35% of profits”.
I gave it a rest in January but in February 2016 asked “How will the Gambling Commission measure the success of its social responsibility policies?” If the proposed database of excluded gamblers produces more problem gamblers than before, will that be regarded as a success? Or will the industry be blamed for encouraging addictive play? If revenue falls for the industry will that be regarded as a success? Drinkaware proclaim a fall in revenue of 16% over 5 years as a success. While social responsibility policies are essential, many companies have not factored or planned for the cost.
In March’s newsletter I brought to the industry’s attention that the Gambling Commission does not complete a financial impact study on social responsibility measures before they are introduced. Something, no doubt, that William Hill’s shareholders would like to have seen before the new policy was introduced.