The exercise of options held by software firm Playtech to increase its stake in William Hill Online will depend on whether the Leeds-based bookie decides to keep its sportsbook operations in the UK or relocate offshore, according to sources.

Following six months of negotiations between the two companies, Playtech and William Hill yesterday announced a five-year licensing deal that will see Playtech sell off its recently acquired affiliated assets to William Hill in return for a significant stake in William Hill’s new online betting and gaming division.

A turbulent week of results in UK bookmaking has prompted analysts to suggest that any recession-proof aura still surrounding William Hill and Ladbrokes should be finally discarded. More significant, alongside approval for the cost-savings measures announced by the pair, are ongoing concerns that adverse tax increases may soon be in the pipeline.

The UK’s bookmakers may find themselves regretting the headlines created by a 100-1 winner of the Grand National when the Chancellor gets up to make his budget statement later this month, say analysts.

The UK’s second biggest bookmaker William Hill said it will create a new banking facility, cancel its dividend, and seek £350m in a discounted rights issue, as it addressed a "dramatic deterioration" in the credit markets that have battered its share price.

William Hill’s plans to revive their online strategy with the introduction of a new Orbis-powered sportsbook in November, might also see their present poker platform supplier CryptoLogic sidelined, according to comments at a company presentation this week.

Ladbrokes is calling for offshore sports-betting operators to pay a nominal level of tax in return for the right to advertise in the UK after the company said competition from overseas saw profits at its telephone betting fall by a third.

The UK’s Conservative Party has joined calls for the Labour government to publish the full details of the submissions put forward by online gaming jurisdictions seeking white-listing status, and demanded a rethink on the way in which the advertising of gambling is regulated.

The departure of William Hill from Italy’s newly liberalised betting market has raised questions about the viability of international expansion plans much-touted by the UK gambling sector as a whole.

Irish betting operator Paddy Power has gone on the offensive, provoked by suggestions that the Irish government might broaden betting tax to include non-retail betting, after it reported operating profits at its Irish retail operation slumping by 18 percent.