William Hill is one of the UK’s biggest, and most successful, gambling operators. The sprawling company operates more than 2,000 retail shops, a very robust online presence, and is expanding its operations to the burgeoning US market. So why is it also asking the landlords of its brick-and-mortar shops for a massive reduction in rent?
The answer lies in the impending rule changes governing fixed-odds betting terminals (FOBTs) in the UK. As of April 1, the maximum stake for a single play on an FOBT will be reduced from £100 to £2 – and there’s no way that won’t impact the company’s bottom line. Consequently, William Hill officials are wagering that their landlords will be interested in embracing the idea that, “a shop paying a lower level rent is better than an empty shop,” as one William Hill representative describes the situation.
Before the new rule changes for FOBTs, brick-and-mortar betting shops were uniquely situated to stay ahead of retail apocalypse that’s claimed thousands of jobs as consumers fill their retail needs online. After all, playing an FOBT in person is a very different experience from playing the same game online. But with the reduction in stake size, the profits from those players will, obviously, be significantly reduced.
In a statement to the Guardian newspaper, William Hill officials said, “The change in regulations will mean that many shops will see costs rise significantly at a time when revenues will decline by in excess of 50% in many cases. We are therefore asking all our landlords to help us maintain our position at William Hill as the leading gambling operator on the high street so that our shops can continue to offer a great service to our customers and help maintain the viability of our high streets. We can’t afford to wait for things to happen as this will simply result in the creeping closure of more and more shops.”
So far, it’s not known what sort of reaction William Hill’s landlords are having to the request. Given the current situation for retail outlets across the world, it’s likely that most of them will at least consider the company’s offer.