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11 January 2008

Will Hill's abandoned attempt to develop its own "NextGen" sportsbetting software was expensive


The latest results from online and land gambling group William Hill plc illustrated the extent of the stiff penalty the group faces for trying to develop its own online betting software (see previous InfoPowa reports)

Following an independent review of the project last year, the UK gambling giant announced it was scrapping its own in-house development program in favour of an outsourced solution, now widely believed to be from the UK company Orbis Openbet, although that has yet to be confirmed.

Outsourcing is no stranger to Will Hill operations - the online division uses poker, casino and bingo technology products from companies such as CryptoLogic and Virtue Fusion.

The excursion into software gambling software development turned out to be expensive as well as unsuccessful, with the group reporting an exceptional non-cash impairment charge on the program to be abandoned of GBP 22 million, and restructuring costs of around GBP 4 million.

Fortunely, overall performance at Will Hill has been strong, according to a trading update this week from the company which revealed anticipated earnings before interest, tax and exceptional items to be around GBP 285 million pounds ($558 million) in the year to January 1.

Reporting on the debacle, The Telegraph newspaper punted Orbis as the new provider, pointing out that it is the software company behind the interactive websites of rivals like Ladbrokes, Paddy Power and the Tote. William Hill will axe its own NextGen Technology and part company with the staff who developed it.

In the absence of a CEO [William Hill has been looking for suitable candidate for the last seven months] Charles Scott, executive chairman, admitted that installing the new system would put William Hill "back a year" in the development of a website that can take complex bets in-running during events.

"A couple of years back, we believed we could get an advantage over our competitors by developing our own system, but in truth we are not software developers," he said.

He added that the new technology, whose supplier he declined to identify, would not be fully implemented until "the fourth quarter of this year".

Analysts cut their forecasts to reflect the NextGen hit, delays to the internet platform upgrade and a looming bill of around GBP 11 million for belatedly signing up to Turf TV. William Hill said it was "in discussions with Turf TV" and Scott said it was "possible" a deal could be struck in the near future.

Scott also confirmed that a new chief executive was unlikely to be appointed until next month at the earliest, saying: "We may not be miles away but it's not going to happen in the next couple of weeks."

Asked if Ladbrokes' e-gaming chief John O'Reilly now seemed an even better choice, Scott laughed, adding: "I think he's happy where he is."

He also appeared to rule out former Coral managing director Wilf Walsh, Blue Square boss Martin Belsham, and Sportech chief Ian Penrose.

Online Casino News courtesy of InfoPowa