The resumption of sporting activity around the globe is a further positive development, to give punters a chance to back their opinions with their stakes.
Trading has been sufficiently strong in the early stages of the second half to permit Hills to return the £24.5m in furlough cash it received from the Government, thanks in part to further advances in online revenues, an area where the company has traditionally been seen as a bit of a laggard relative to GVC, Flutter and others.
Best of all, William Hill continues to make progress in America, which remains a market of huge potential following the repeal in 2018 of the Professional & Amateur Sports Protection Act and the legalisation of sports wagering, albeit at the discretion of individual state legislatures.
Hills was already well-placed in America, as it was the leading regulated player in Nevada and had a relationship with New Jersey’s Monmouth Park racetrack before the law changed. It has since built on that position via exclusive partnerships with CBS Sports and the casino group Eldorado.
The latter has since acquired Caesars Entertainment to create America’s largest casino group and the newly created entity has just struck a deal with the US sports broadcaster ESPN, greatly enhancing William Hill’s reach both online and across 170 retail sites in 13 different states.
As a result, Hills continues to cement its strong position in the burgeoning US market and is doing so with little additional marketing spending, as it leverages existing relationships and technologies.
The gambling industry will not appeal to all investors, not least on ethical grounds, and key risks remain, notably any further cancellation of major sports because of a second wave, higher taxes and ongoing regulatory scrutiny.
Even a minor whiff of a betting scandal in the US, for example, could set that market back years, as anti-wagering campaigners would doubtless press for new laws as they evoked memories of the 1919 baseball World Series, thrown by the Chicago White Sox in exchange for cash.
However, momentum in the US is building and Hills’ prime spot here could well merit a higher valuation over time for the shares.
Questor says: hold
Share price at close: 214.4p