Horse racing is likely to see a drop in its media revenues after William Hill announced plans to close around 700 betting shops in the UK before the end of the year.
The betting firm said legislation introduced in April limiting the maximum stakes on fixed-odds betting terminals (FOBTs) had led to a “significant fall” in gaming machine revenues and was the principle reason for the closures.
Horse racing currently earns healthy revenues selling bet-to-view media rights to individual high-street bookmakers based on the number of stores they run. The average betting shop pays around £30,000 (€33,000/$38,000) per annum for the rights to broadcast a range of live sports, meaning the closures will lead to losses of around £21m in media revenues for rights-holders, with racing likely to be the hardest hit.
The Jockey Club, the operator of 15 racecourses in the UK, froze prize money at its tracks last December, claiming the FOBT legislation could lead to the closure of up to 1,000 high-street shops a year and a subsequent £40m to £60m reduction in horse racing media-rights income a year over a three-year period.
William Hill had the largest retail footprint of any bookmaker in the UK before the announcement with 2,282 stores, followed by Ladbrokes (1,849 stores) and Betfred (1,644 stores).
A statement from the firm said: “William Hill has entered into a consultation process with retail colleagues over plans to close around 700 licensed betting offices.
“This follows the government’s decision to reduce the maximum stake on B2 gaming products to £2 on 1 April 2019. Since then the company has seen a significant fall in gaming machine revenues, in line with the guidance given when the government’s decision was announced in May 2018.
“A large number of redundancies is anticipated with 4,500 colleagues at risk. The group will look to apply voluntary redundancy and redeployment measures extensively and will be providing support to all colleagues throughout the process. Subject to the outcome of the consultation process, shop closures are likely to begin before the end of the year.”