British Betting Giant William Hill to Close Its Operations in Israel

Israeli operations focus on marketing online betting, over 200 of the 250 employees in Israel to be laid off

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A WIlliam Hill betting shop.
A WIlliam Hill betting shop.Credit: Betty Longbottom / Wikimedia Commons

British gambling giant William Hill will shut down its operations in Israel by the end of March 2018. Over 200 of the 250 employees in Israel will be laid off and the company’s offices in the Azrieli Center in Tel Aviv will be closed.

A small number of the Israeli employees will be offered relocation to the company’s headquarters in Britain or elsewhere in Europe. Many of the workers will be offered packages to keep them working for the company until the shutdown at the end of the first quarter of next year.

William Hill confirmed the details, saying personal meetings are being held this week with the employees.

William Hill has been around since 1934 and is now traded on the London Stock Exchange with a market cap of some 2.4 billion pounds sterling ($3 billion), unchanged from its value a year ago. It has some 2,000 betting shops around England and 16,000 employees in 10 countries.

The company arrived in Israel because of its online gaming activity, which it began in 2008. It collaborated with Teddy Sagi’s company, Playtech, which provided the infrastructure for an online casino. Israelis are banned by law from using the company’s betting services.

About half of the Israeli William Hill operation is marketing in other countries, rather than development.

The collaboration, run from Gibraltar with operating and customer service centers in the Philippines and Bulgaria, was a success. After three years William Hill bought out Playtech’s 29% stake in the venture for about 460 million pounds (about $670 million).

The company’s 2016 financial reports can help explain the decision to shut down its Israeli operations: After years of continuous growth in online betting, which is responsible for about a third of William Hill’s business, last year revenue fell by 3% and operating profit by 20%. Revenue from new customers was lower than expected, which the company blames on “ineffective marketing” that has led to replacing the management of its online services division in Britain.

The firm set goals for efficiency measures for its online operations, savings of 40 million pounds ($51 million), saying online operations grew very rapidly for eight years and expenses grew too without being adequately reviewed in areas such as information technology, customer services and organizational structure.

Marketing from Europe, closer to the customers, will be more efficient, the company hopes. Israel is now considered to be a relatively expensive country for such operations today, due to the combination of a strong shekel and high real estate prices.

Dozens of firms in the online gambling industry have operations in Israel, including a number of well-known names, including Ladbrokes Coral in addition to 888 and Playtech. Each of these companies has hundreds of employees in Israel. Dozens of smaller firms in the industry operate here too, most of which do not sell to the general public but provide support or infrastructure for other firms. These smaller firms employ an estimated 2,000 to 3,000 workers here.

William Hill said from Britain that it had met on Sunday with employees to inform them that the company had decided to move its operations from Israel to Europe. The company said it recognized the contribution of its Israeli staff in its online success but had decided that marketing its business from Europe would be more efficient. The process will be handled professionally and with sensitivity and the local staff understands the decision, said William Hill.

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