Betting against William Hill

Tighter regulation and big losses on Premier League football, partly caused by Leicester City's incredible season, have cost William Hill big money this year. March's profit warning continues to weigh heavy on sentiment and, although the bookie has avoided taking the red pen to profit guidance again, news that the online business continues to suffer has sunk the shares close to a four-year low.

Online had a tough start to the year, hit by declining non-core markets, "customer-friendly" European football results and massive losses on the nags at Cheltenham - the worst in recent history. It's why the shares are down as much as 6% on Wednesday to 304p.

An 11% drop in net revenue in the 17 weeks to 26 April was driven by a 17% slump in Sportsbook business and a 4% drop in gaming turnover. In the UK, customers gambled away less cash, and a disappointing Casino performance pulled gaming net revenue down 5%, although there was double-digit growth in Italy and Spain.

Time-outs - a facility introduced last year so internet punters could give themselves a breather - and automatic self-exclusions, which can last for over six months, still hold the web business back. The drop in revenue could hit profits by £20-35 million this year, the group warned in March, although Hill still thinks total operating profit should reach £260-280 million this year.

"We are monitoring this closely but, at this stage, these trends remain unchanged," said the company Wednesday.

Prioritising product improvements, customer acquisition and yield, and international expansion across the group, interim online managing director Crispin Neiboer has been given the job full-time.

Retail had a better start to 2016. Although turnover was down and Hill admits it lost £2.2 million on the Premier League this season, a 60-basis-point increase in gross win margin was as expected and better than last year. The dismal Cheltenham result kept net revenue flat on last year, yet gaming machine sales are up 4%.

Nearly 500 self-service betting terminals will be in William Hill shops before the EURO 2016 football tournament kicks off next month, swelling to 2,000 by the end of the year. Net revenue from gaming machines has grown 9% since a £50 limit on controversial fixed odds betting terminals was introduced last April.

Hill's Australian and US businesses are performing well, with amounts wagered up 10% and 31% respectively as the Australian brand focuses on its digital priorities.

However, William Hill's share price has crashed by 22% since the beginning of March, and there are precious few obvious catalysts to trigger a revival. It can't do much about the footie results - these things have a knack of ironing themselves out over time - but Hill must do better on account openings by responsible gamblers to replace the rising number of lock-outs and self-exclusions.

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