Shares in Britain's biggest bookmaker are tanking

William Hill's shares are tanking after the bookmaker dropped a pretty horrific trading update this morning.

Shares have plummeted by more than 8% so far and it looks like they could go down even further.

The news this morning that profits at Britain's biggest gambling firm fell by 39% over the past three months spooked investors and caused money to pour out of the market.

The drop in profits across the whole of the company looks pretty bad, but it's nothing compared to the 91% drop seen in Australia, William Hill's newest market.

Revenues fell in all three areas of William Hill's business, and once again Australia suffered the most, dropping 36%. Retail sales were down 8% in Q3, while online revenues performed best, dropping by just 3%. Overall revenues were down by 9%.

Australia only represents around 6% of William Hill's business, but its catastrophic fall in profits and revenues, which the company says "reflect the transition this business is undergoing" have clearly helped drive the poor overall performance of the company.

William Hill chief executive James Henderson put some of the blame for today's awful results on the fact that last year's Q3 was exceptional thanks to huge amounts of betting activity during the World Cup in Brazil.

He also argued that the massive fall in profits was caused by "weaker than expected sporting results". Essentially too many favourites won sporting events, costing the company huge amounts of money.

This is reflected in the lower gross win margin (GWM) seen by both online and retail businesses in the UK. GWM fell by 0.8 points in William Hill's online business, and 3.1 points in retail. The gross win margin measures the total percentage of bets won by gambling businesses

"Q3 was always going to be a tough quarter given last year's World Cup and very strong gross win margin, allied to £23m of additional gambling duties this year. The quarter also featured weaker than expected sporting results impacting Retail, the US and Australia, and the drag effect of the non-core market decline in Online."

William Hill has a total of 2,360 shops in the UK, along with a big online presence, and is currently the biggest bookmaker in the UK. However, changes in the law - along with a wave of changes by competitors - means that this position is by no means assured.

The gaming industry is currently facing a big squeeze thanks to increased taxes on gambling . This has led to a spate of mergers between major gaming companies, who are seeking to consolidate their positions.

Most notably, Coral and Ladbrokes, as well as Paddy Power and Betfair, have merged to create super-bookies. Both new companies are threatening William Hill's position at the top of the UK betting tree.