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William Hill sells Australian business after regulation and tax hit

William Hill has agreed to sell its Australian arm to Melbourne-based CrownBet after a ban on so-called credit betting in the country forced it to write down the unit’s value.
Philip Bowcock, chief executive, said the sale would allow William Hill to focus on its businesses in the UK and the US, where gambling firms are poised to make the most of a relaxation in regulations expected later this year.
The deal values the division at A$300m (?168m) on an enterprise basis, which includes debt, and A$313.7m on an equity basis.
The bookmaker first ventured into Australia in 2013 with the A$670m purchase of Sportingbet and the A$34m acquisition of tomwaterhouse.com.  
But the ban on credit betting, where gambling firms extend lines of credit punters can use to bet, as well as the threat of a new tax, led to the company booking a ?238m impairment charge on the division last month.
William Hill sells Australian business after regulation and tax hit

Philip Bowcock says the proceeds from the sale of the Australian business will be put into other areas of the company

Credit:
Henry Thomas/Henry Thomas
William Hill said the deal needs to be approved by foreign investment and gambling regulators in Australia but that it expects to get the go ahead “in a timely manner”. The deal saw the Stars Group up its stake in CrownBet from 62pc to 80pc to help fund the purchase 
The about-turn by William Hill on exposure to Australia will potentially raise questions about what its UK-based rivals do.
Ladbrokes Coral, which is being bought by GVC, has exposure to the Australian market via its website there but the division is small and the company does not disclose revenue and profit figures for it. Post-acquisition though, it will be an even smaller share of the enlarged group given GVC has no exposure there.
William Hill said it would use the proceeds of the sale to cut its debt and invest in growing the rest of the business.
William Hill shares
Bookmakers including William Hill are hoping for a change of the laws surrounding sports betting in the US this year, given the Supreme Court will issue a ruling on the future of the Professional and Amateur Sports Protection Act (Paspa).
The case, brought by New Jersey governor Chris Christie against the National Collegiate Athletic Association (NCAA), centres on an appeal by Mr Christie against a 2016 court decision in his state to maintain a federal ban on sports betting via Paspa.
The US passed the law because of concerns that sports betting was a national problem which caused harm to its citizens and those in other countries. But that hasn’t stopped a multi-billion dollar black market in US sports betting thriving, something which has helped fuel recent calls for legislation to help protect consumers and provide an income stream for state authorities.
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