(Reuters) - British bookmaker William Hill (WMH.L) drew a line under a costly bet on Australia on Tuesday with the sale of its business there to CrownBet for A$314 million ($244 million).
While Australia is the world’s second-largest regulated sports betting market, bookmakers have come under pressure from a ban on them offering or extending credit to customers.
William Hill, which expanded in Australia through acquisitions in 2013, took a charge of more than 238 million pounds ($332 million) on its operations in 2017, pushing it to its first pretax loss in three years.
The retreat from Australia could raise further questions about William Hill’s future after it missed out on a round of consolidation in its home market. Its shares were up 1.5 percent to 321 pence at 0956 GMT.
The company said it had signed the deal, having an enterprise value of A$300 million, with a unit of CrownBet, which is owned by Canada’s Stars Group (TSGI.TO), and a group of shareholders associated with the CrownBet’s chief executive Matthew Tripp.
Compounding the challenges for betting firms, South Australia introduced a point of consumption tax last year, making firms pay 15 percent of their net revenue from bets and Western Australia, Queensland and Victoria may follow suit.
“Given the credit betting ban in Australia and the likely introduction of a Point of Consumption tax in a number of states, it is clear that profitability will increasingly come under pressure,” William Hill had warned in January.
It said in November that it was in “very preliminary discussions” with CrownBet about a possible combination with its Australian business, which operates licensed betting, over the telephone, internet and mobile phone platforms and has about 284,000 customers.
The business made up 7 percent of William Hill’s revenue and nearly 6 percent of adjusted operating profit in 2017.
CrownBet, which launched in 2014 in Australia, is one of the country’s fastest-growing online sports bookmakers with annual revenues of around A$204 million in 2017.
Stars Group, which owns PokerStars and Full Tilt, has been looking to inject money to expand its online casino and sports betting businesses.
Reporting by Arathy S Nair and Radhika Rukmangadhan in Bengaluru; Editing by Gopakumar Warrier and Alexander Smith