EGR Power 50 2022: 4. 888 Holdings
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4. 888 Holdings
Financials : H1 group revenue (excluding retail) totalled £680m, a fall of 21% on the first six months of 2021. Revenue for the third quarter slid 10% YoY to £325m
Strategy & impact : Historically a firm with igaming at its core. The acquisition of William Hill in July was a much-needed deal as 888 was increasingly isolated amid industry consolidation
Geographic reach : Its main markets include the UK, Spain, Italy and Sweden. Run by wise heads, the Africa joint venture could make 888 a powerful player in this untapped part of the world
Influence & leadership : Born in the unregulated ‘Wild West’ 1990s, 888 celebrated its 25th anniversary in May this year. The leadership team has recently been enlarged with the Hills acquisition
“Transformational”. That was how 888 has repeatedly referred to the acquisition of William Hill International – all the non-US assets plus Mr Green – from Caesars Entertainment. Whether or not it does indeed turn out to be transformational for 888 in the long run, the £1.95bn purchase of this 88-year-old bookmaker and household name in the UK is principally why the FTSE 250 firm leapfrogs to fourth spot. As a result of the transaction, William Hill (ninth last year) bows out of the Power 50 rankings as a standalone business.
William Hill, which boasted two million active online UK customers when the deal was announced in September 2021, provides historically gaming-focused 888 with a more balanced product mix by revenue, omni-channel gains through its 1,350 shops, and a heritage brand. That said, 888 and William Hill endured a troubling 2022 in the UK – the biggest market for both – as revenue slumped. For instance, 888’s H1 UK revenue fell by a quarter caused by tough comparatives and more stringent safer gambling measures, including lower affordability thresholds and self-administered cuts to slots stake limits.
Being shut out of the Netherlands also put a dent in revenue, however 888 has thrown its hat into the ring in Africa with a ~20% stake in 888AFRICA, a JV involving five industry veterans. Running on a third-party platform, 888bet debuted in October in four regulated sub-Saharan markets: Tanzania, Zambia, Mozambique and Kenya. In the US, 888 continues to plug away with SI Sportsbook leveraging the Sports Illustrated name, although it will now pivot to become a casino-first brand. To the north, 888 was one of the first newly licensed operators to launch in Ontario. The firm’s three products – 888casino, 888poker and 888sport – are live in the province.
On the subject of products, the disposal of the B2C and B2B bingo business was completed in July. Some eyebrows were raised at the decision to offload a cost-effective user acquisition channel and the seemingly modest total consideration of $45.3m attached to the sale, yet CEO Itai Pazner stressed it would enable greater focus on the Hills and Mr Green tech integration. Despite 888 now being saddled with a pile of debt (£1.8bn as of 30 September), only compounded by rising interest rates, investors will be hoping for a brighter year ahead after 888’s shares tumbled by a wince-inducing 68% in the past 12-month period.