European online poker players are migrating to sites based in Costa Rica in order to go head-to-head with Americans who are regarded as the best players in the world, says William Hill.
The drift to the sites – regarded as illegal under US laws – has hit the bookmaker.
William Hill is also facing increased competition from legal sites in Europe as they scale up their marketing spend to attract new European customers.
The company reported a 0.5pc increase in pre-tax profits to GBP 134m in the first half, despite a difficult comparative period as the World Cup helped drive performance last year.
It said higher charges on in-store betting machines, which it forecasts will cost around GBP 15m extra a year, were offset by a 16pc increase in gross win from the machines.
Overall group revenues improved 4pc to GBP 477m.
Analysts said trading in the first four weeks of the second half was promising as the company’s gross win – ignoring the impact of the World Cup – improved 4pc despite the number of racing fixtures cancelled due to the dreadful weather, and the introduction of the smoking ban on July 1.
William Hill said the second half should see the benefits of extended opening hours and the introduction of jackpot machines from September, but warned that there was some uncertainty around the full impact of the smoking ban.
It plans to resume its share buyback programme in the second half.
The programme was suspended earlier this year so the group could invest in its joint venture with Codere to establish businesses in Spain and Italy, which it says are progressing well.
The company will pay an interim dividend of 7.75p a share on December 5.
The shares inched up 1.5 to 600p.