888 CEO: Brand “main barrier” to sportsbook success for international operators as US growth focus switches
Itai Pazner reveals regrets about historical American expansion but affirms belief that operator is finally “comfortable” in its plans for the US
888 CEO Itai Pazner has suggested international operators looking to grab a foothold in the US sports betting market should target partnerships with US brands rather than look to go it alone when launching in the highly competitive market.
Speaking in an interview with EGR to coincide with 888’s Capital Markets Day (CMD) Pazner discussed the trajectory of the 888 brand in the US, where the group has operated with B2C igaming since 2013.
Despite its eight years in the US market, 888’s US operations account for just 1% of the group’s overall gross gambling revenue, a performance history not lost on the 888 CEO.
“One of the things that we realized after a few years of operations there is that the US works very differently in terms of brand selection of customers. The customers in the US will almost always prefer a brand that they know and a local brand rather than an international brand,” Pazner said.
“888casino, 888sport & 888poker came into the market as international brands that were trying to break into the US market. I don’t think there’s one example where an international brand has succeeded in the US. I might be wrong, but I can’t recall any,” he added.
Expanding on his perception regarding the brand, Pazner drew from 888’s own experience of launching 888sport in the USA, which came after several trials in the market, alluding to the brand issue serving as a barrier to operators.
“If you want to break that barrier, either you have to invest huge amounts of money to create a brand in the US like FanDuel and DraftKings or you have to associate yourself with a local brand, like Entain did with BetMGM,” Pazner explained.
“After a few years, we realised that while essentially everywhere else in the world where we entered as 888 organically we managed to grow our market share as an international brand – by going in locally and doing local marketing etc – in the US, that tactic just wouldn’t work.
“After analyzing and researching and mapping out the different options, we decided that we wanted to partner with a strong local brand, and after assessing many opportunities, that brand was Sports Illustrated (SI).
“On the tech side, having gone one from a tech architecture prospective, we changed that as well, but today we have all the ingredients in place,” he added.
888 began talks with Sports Illustrated’s parent company Authentic Brands Group in April 2021, concluding an exclusive content and sports betting deal to develop a Sports Illustrated-branded sportsbook and igaming offering for the US market in June 2021.
The business, which boasts almost four million followers across Twitter and Instagram, has also explored launching an SI Bets brand. The Sports Illustrated website attracts 40 million unique hits per month, while its total subscriber base of both print and digital has surpassed the two million mark.
The SI Sportsbook has since launched in Colorado and Virginia, with plans to expand to other states in the near future, with Pazner upbeat about the future of 888 in the US.
“We have the brand, we have the technology, and we now feel comfortable as we’re rolling out our new, much more focused strategy with a local brand and to the exact right target audience,” Pazner remarked.
In its presentation deck for the CMD, 888 revealed plans to focus on igaming states and target the so-called ‘unsexy sweet spot’ in the US market with the SI Sportsbook brand, as well as targeted promotional marketing in its operational jurisdictions.
Discussing the ethos behind this switch, Pazner cited the impact of SI’s audience on its US ambitions.
“Obviously, a lot of the big operators are going after the mass market, younger population; I’m not just talking about students, but the young and mobile generation,” Pazner explained.
“Our partner Sports Illustrated is a brand that resonates very well with a slightly older demographic which has on average a higher GDP per capita, and a higher level of loyalty to the brands they trust, so it’s a slightly older, more male demographic.
“That’s why we call it the ‘unsexy sweet spot’ – because the ‘sexy sweet spot’ is younger, cooler, hipper – not people like me, essentially,” Pazner quipped.