William Hill to axe stores after tax on terminals

Chief executive Ralph Topping. Picture: Mark Turnbull

The move was announced as the firm said operating profits at its retail arm had tumbled by 25 per cent after big payouts to punters on two weekends of the football calendar.

Chief executive Ralph Topping, who is also chairman of the Scottish Professional Football League, said the closure of the 109 loss-making branches was “particularly disappointing”.

William Hill, which has more than 2,400 betting shops, had warned that George Osborne’s increase in the tax on fixed-odds betting terminals (FOBTs) would cost it about £22 million a year. The closures will lead to extra costs of up to £24m.

Critics of the machines, which offer versions of games such as roulette, claim they are addictive and complain there are too many betting shops on the high street, but the industry says there is no evidence to support the assertion that they fuel problem gambling.

The Association of British Bookmakers has described the tax hike on FOBTs as a “kneejerk and ill-considered tax raid”.

Topping, right, said: “As a direct result of the government’s unexpected announcement about an increase in machine games duty to 25 per cent, we have reviewed shop profitability and will be closing a portfolio of 109 shops this year, putting about 420 shop employees at risk of redundancy.

“This is particularly disappointing as, through the economic downturn, we have worked hard to grow our retail base but this further planned increase in indirect taxation makes this action necessary.”

While Topping told investors that “every effort” would be made to find other opportunities for the affected staff, “this may not be possible in every location”. A spokeswoman said the firm was yet to confirm which branches will close.

Almost a third of the bookmaker’s store workers are aged between 18 and 24, and 57 per cent are women.

Topping said: “What’s theeffect of all that? Well, there’s lost revenue to the government. Lost rents and more empty shops on the high street.”

Community, the union for betting shop workers, said it planned talks with William Hill over the closures.

Assistant general secretary John Park added: “The Chancellor’s decision to make such a hike in FOBT duty was always going to affect the viability of shops on the margins of profitability.

“This has proved to be the case at William Hill, and we would not be surprised to hear similar announcements from other operators in the near future.”

Topping said the bookmaker has enjoyed a rise in online sales and was “very well placed” to take advantage of this summer’s World Cup in Brazil.