Gambling operator William Hill is planning to close its Israel-based office, forex trading news outlet LeapRate has reported citing unnamed sources with knowledge of the matter.
The major UK bookmaker expanded its physical presence to Israel back in 2008 when it formed its online gambling division – William Hill Online – together with gambling provider Playtech. The Teddy Sagi-founded supplier transferred a considerable portion of its Israel-based staff members as well as other assets and technology into the newly formed entity. In exchange, Playtech received a 30% stake in William Hill Online.
In 2013, the two companies cut ties, with William Hill purchasing Playtech’s holding for the total amount of £424 million.
According to LeapRate sources, the gambling operator will relocate Israeli operations to the UK or in other parts of Europe where it has offices. It is believed that the move has been partly necessitated by William Hill’s efforts to improve the profitability of its online gambling business.
Last spring, the operator issued a profit warning, explaining that the weaker-than-expected performance of its online business had impacted significantly its overall profitability. As a result, William Hill had to lower its full-year profit forecasts by £20-25 million to £260-280 million.
William Hill’s Israel office is located at the Azrieli Towers in Tel Aviv. It employs around 250 people. Sources have told LeapRate that over 200 of those working in Tel Aviv would be laid off. It has also been understood that company representatives have already begun talking to staff members. According to LeapRate, they have all been told that the move was part of William Hill’s strategy to consolidate its online business with its other operations.
The operator’s latest trading update for the period between January 1 and April 25, 2017 showed that revenue from online gambling operations was up 16% year-on-year. The double-digit increase continued a positive growth trend from the second half of 2016.
Last year was particularly eventful for the operator as it entered and walked out of merger and acquisition talks not once, but twice. In August, The Rank Group and 888 Holdings tried to court William Hill into a three-way deal that would have seen the former two buy their rival.
Later in the year, the major operator and online gambling giant Amaya discussed a £5-billion merger deal, but talks fell apart under pressure from key William Hill shareholders.
Industry insiders believe that the gambling operator may still be in a quest for a suitable partner, despite failing to join the consolidation wave that engulfed the global gambling industry in the summer of 2015. Three pairs of gambling giants announced multi-billion merger and acquisition deals in a bid to cope with the introduction of stricter gambling regulations, particularly ones related to taxation, as well as with growing competition in the field.
