William Hill sets aside £15m to cover potential UKGC fine amid “ongoing” licence review

William Hill has segregated £15m to pay any potential fine meted out by the UK Gambling Commission (UKGC) fine, 888, which is in the process of acquiring the operator, has confirmed.

Delivering an update on its acquisition of Hills’ non-US assets from Caesars Entertainment, the London-listed operator revealed Hills was the subject of an “ongoing” review into its UKGC licence.

“Following a compliance assessment conducted in July and August 2021, the William Hill Group is subject to an ongoing licence review and is addressing certain action points raised by the UKGC in relation to WH’s social responsibility and anti-money laundering obligations,” 888 said.

“It has provided the UKGC with an action plan to address the action points raised by them and is in the process of implementing that action plan” the operator confirmed.

888 also noted that this review could see the implementation of a fine, additional regulatory measures or even the suspension of William Hills’ UK licence.

“In November 2021, the William Hill Group notified the UKGC of separate areas it plans to address arising from challenges implementing cross-brand self-exclusion processes,” 888 confirmed.

“The target business (William Hill) has recorded a provision of £15m in its financial statements for target FY 2021 to cover potential cash outflows resulting from any regulatory sanctions and associated costs resulting from this compliance assessment and licence review,” it added.

If the punishment turns out to be £15m, it would be the largest fine ever dished out by the UKGC. In March, the regulator hit 888 with a fine of £9.4m for AML and social responsibility breaches, while Hills was fined £6.2m in 2018 for failing to identify problem gambling and prevent money laundering.

888’s deal to acquire the Hills non-US business from present owner Caesars Entertainment is set to complete in June, with the two companies negotiating a revised purchase agreement to reflect this impending penalty.

To mitigate these “certain losses and costs” arising from a potential suspension or the implementation of certain licensing conditions on Hills, Caesars and 888 have inked a series of indemnity agreements aimed at protecting the business if certain outcomes occur as a result.

The agreements, inked on 8 March, cover the Mr Green Limited, WHG (International) Limited and William Hill organisation limited business with a total aggregate liability to Caesars of £380m.

Any licence suspension applied by the UKGC to any of these entities will be indemnified by Caesars to a maximum of £152m.

In the event of licence conditions being imposed by the UKGC, Caesars will be liable to pay a maximum of £78m to 888 as part of its indemnity agreement.

Following the lifting of any licence suspension, Caesars must make an additional one-time reactivation payment not exceeding £150m to each of the licensed entities named.

“The licensed entity must notify Caesars as soon as practicable after they become aware of liability under the indemnity deed and in any event no later than three months after the date on which the UKGC issues its final decision notice in relation to the current licence,” 888’s agreement with Caesars states.

“Caesars also has certain information, consultation and conduct rights as indemnifying party, including the right to appoint an independent expert,” 888 added.

The UKGC has not responded to a request for comment on the review at the time of publication after being approached by EGR.