Delivering digital growth and international diversity
Digitalisation represents an opportunity for well-positioned brands such as William Hill to take advantage of this trend. The UK is a large regulated market and a pillar of our online strategy, whilst the international markets present opportunities for growth and greater economies of scale.
With an estimated market value of £5.3bn1 , the UK remains our largest online market and an area of key focus given the changing competitive and regulatory landscape. The market remains competitive, in part due to historically low barriers to entry.
Increased regulation, scale and technological developments have raised these barriers and the UK Online business has responded well, developing a competitive customer offering, focusing on increased personalisation and providing best-in-class customer support.
We have been proactive in our approach to safer gambling with our Nobody Harmed initiative. During 2018, we implemented enhanced due diligence checks and we, alongside the industry as a whole, have made real progress in 2019 to continue to self-regulate.
Growth in the UK has slowed over time as the market matures. Online and particularly mobile, remains the fastest growing segment in the UK gambling industry and we have maintained our market share against that backdrop.
The online betting and gaming market continued to grow in 2019 providing an opportunity to diversify our international footprint. There is an increased focus on regulation and compliance in some of the European markets, although we saw the region stabilise towards the end of 2019.
We anticipate growing regulatory complexity in the coming years, most notably in Germany. Nonetheless, we are well prepared for these developments and expect further growth opportunities to come from our international markets.
Our ambition is to build a digitally led and internationally diverse business. Aligned with that ambition, our goal in the Online business is to reach £1bn revenue by 2023 with at least 50% generated outside the UK. Currently 65% of our Online revenues are derived from the UK, with 35% generated from higher growth international regions. Our strategy is to continue to diversify geographically and focus on markets that have potential for faster growth in order to achieve our ambition.
Following the acquisition of Mr Green, we are now able to pursue a multi-brand strategy to build two global brands in sports and casino. We already have a strong brand presence in existing markets and aim to leverage each brand’s reputation when entering new markets through clear brand positions and attractive player offerings. In 2020, with the Malta hub in place, we will cross-sell our brands in markets where we already have established expertise and supply chain relationships, enabling faster entry to new markets.
Gambling is a legitimate leisure activity that our players engage in for fun. With a relentless focus on our customers, we are developing our products and services to promote player protection and ease of use. We track our progress through objective customer data points, including net promoter measurements and various touchpoints in our product. Everything we do is underpinned by our commitment to safer gambling practices, and it is our long-term aspiration that nobody is harmed through gambling.
In sports betting, we will continue to improve our overall product offering, with football and horse racing the key areas of focus, especially with the 2020 UEFA European Football Championship (Euro 2020) later in the year. Together with gaming, we will invest in product development, IT systems and personnel to improve the customer experience through personalisation and automation.
In 2019, our marketing and promotional activity continued to shift away from driving short-term volume towards sustainable and recreational players. We repositioned our brand and marketing proposition to modernise the appeal of William Hill and focus on betting and gaming as a shared experience. A bet is not just a transaction, it is about who you play with and our 86-year-old trusted brand is a strong foundation from which to deliver that message. In 2020, we will continue with this strategy alongside the use of marketing tools and technology developed to optimise our investment and enhance our players’ experience. Our relentless focus on our customers and our investments in product and service have combined to stabilise our UK market share, and we enter 2020 confident in our strategy and delivery.
In our International Online business, 2019 was a pivotal year. The acquisition of Mr Green delivered on our strategy to diversify our business internationally, and now 35% of our Online revenues are generated outside the UK.
Our international diversification centres around eight local licences. The Mr Green acquisition gives us an established agile international hub in Malta, enabling us to take advantage of further international opportunities to drive additional geographic diversification into 2020 and beyond. Our approach in the International business mirrors our UK go-to-market strategy. We focus on driving growth through product improvements, top class user interaction, attractive payment methods, and through using the most popular game providers. In addition, we strive to maximise player value through efficient cross-sell between sports and casino.
In 2019, the focus for the Southern European region was on significant product improvements for the William Hill brand. We improved the mobile front-end experience and introduced a single wallet and additional gaming providers in Spain, concluding 2019 with significantly increased player engagement. For the Mr Green brand, we saw strong growth in player engagement from product improvements, with particular traction from personalised content based on player preferences and activity.
With two strong brands in sports betting and gaming, together with significant product developments in 2019, we remain well placed to expand our global footprint and drive growth.
1. Gambling Commission Industry Statistics, March 2019