Levy predicts rapid 888 recovery in 2011
888 will increase revenues rather than cut costs in 2011, its CEO Gigi Levy told eGaming Review.
888 Holdings has had a “horrible” 2010 but will persist with its strategy to increase revenues and boost its bottom line rather than dramatically cutting costs in the next 12 months, its chief executive has admitted to eGaming Review.
“We’ve had a horrible, horrible run in poker from the beginning of 2008 until now. The only exception was in January this year, when we hit a run-rate in January of US$300m,” Gigi Levy said.
“The issue is we’re the same size in scale as Bwin but we have less revenues. Either we cut costs or we try to increase revenue, so we’re going for the latter strategy for the time being,” he added.
In August, 888 announced a short-term cost-cutting programme to prevent further losses that forced the company to forgo an interim dividend payment. Its first-half pre-tax profit fell 43% to US$8.4m (£5.4m) in the six months to June, from US$14.9m last year. At the time, Levy blamed the slump on a decline in the online poker market, currency exchange movements and the World Cup.
Levy told eGaming Review during the European iGaming Congress (EiG) in Copenhagen earlier this month that it had since partnered with a large undisclosed poker affiliation site following 888’s relaunch of its Poker 6 product earlier this year, and that as a result its liquidity had soared 40% since August.
“In the past few months we’ve launched Poker 6 and partnered with a large poker affiliate and our liquidity is up by 40%. The main reason for this is the new software that has been developed in-house,” said Levy, refusing to reveal his affiliate partner. “We’re going to give the market a trading update in the coming weeks so we’ll see how we come out,” he added.
“We’re now number three with our new poker product and that includes ‘Stars and Tilt. We’ve gone up to around 1,200 players. This has been judged using subjective poker software and ratings by industry experts,” he added.
However Levy said he remained “very cautious” about investing further in its poker software “because Stars and Tilt are also seeing some fallout”, but he said that within its core casino product a number of VIPs had returned to the site and were depositing large sums. “Our poker players love the new product. I love reading posts on it because every day we receive great feedback from players,” said Levy.
He added that 888’s product split was “around 50% casino, 25% bingo, 15% poker and 10% the rest”, also revealing that the company was due to announce changes to its sportsbook in November.
“Look out for some changes in our sports-betting operation. We need to be stronger in sports and we will change this very soon,” he said.
On the ongoing investigation by Nevada regulators into Dragonfish’s B2B deal with US gaming giant Harrah’s, Levy said the company was “still waiting for suitable partner approval” from Nevada regulators and that the rigorous examination process was taking longer than expected.
Find out next week who has fallen off and risen up eGaming Review’s seventh annual Power 50 list.