January 18, 2008

William Hill says sportsbook technology not up to in-running; signs up to Turf TV

A failure on the part of William Hill’s in-house sports-betting platform to be able to handle in-running betting largely lies behind the announcement of a switch to a third-party provider, according to finance director Simon Lane.

Orbis is believed to be the new supplier to the UK high-street bookmakers online operation, following the announcement last week that the Leeds-based bookie was scrapping its in-house NextGen sportsbook technology.

“Technically, the system at present can handle some in-running, but it doesn’t deliver the slickness of some of our competitors,” Lane told eGaming Review. “We had originally stolen a march on our competitors, but the market has moved on. You need agility in your technology. Then to a lesser extent there were the demands on the international side.”

The admittance from William Hill points to how important in-running betting has become to the major bookmakers.

Lane said that as 2007 progressed there was growing concern within the company that it was falling behind its competitors in its provision of its in-running offering. “We have made a bold decision. It has been hard, washing your dirty linen in public. It's been embarrassing. But we needed certainty. We had to put our hands up.”

In a trading statement last week, the company admitted that alongside “competitive issues”, it was the impact of technology issues that led to performance at its online operation to continue to be “disappointing”. After a review conducted last November, it was decided to terminate the company’s NextGen technology platform.

The company said the decision would result in an exceptional non-cash impairment charge in relation to the existing technology programme of £22m and restructuring costs of around £4m.

As exclusively revealed by eGaming Review last week, an agreement with Orbis is thought by industry insiders to be a “done deal”. Orbis already supplies the online sportsbook technology to Ladbrokes, Paddy Power and the UK’s Tote.

William Hill saw its share price hit by the news from its trading statement last week. Despite saying that its retail division had performed strongly, traders took a dim view of the company’s short-term prospects. The share price has now fallen over 40% since its autumn high of 672p to its level at the end of last week of 390p.

The market concentrated on the downgraded earnings guidance. William Hill said full-year earnings before interest, tax and exceptional items to be around £285m. This is around 2% less than previous estimates.

However, the share price recovered some ground on Monday following the announcement that William Hill had signed up to TurfTV. The bookmaker will now receive coverage for its 2,275 shops from the 31 UK racecourses which had been unavailable in William Hill shops since 1 January.

William Hill is the latest high-street firm to sign up to the joint venture between the racecourse and Alphameric following similar deals with Coral and Ladbrokes at the turn of the year. It is not known how much the deal is worth.

Alan Morcombe, chief executive at Alphameric, said the deal with William Hill “signifies a milestone in the development of our business”.