A global wagering and entertainment powerhouse, 888 Holdings, is restructuring its American ventures. Amidst intense rivalry and substantial operational expenses, the firm has initiated a thorough evaluation of its US business-to-consumer (B2C) division.
Within this strategic realignment, 888 has severed its collaboration with Sports Illustrated (SI), terminating their accord to utilize the renowned brand for digital wagering and gaming. Consequently, 888 will discontinue managing the SI Sportsbook and SI Casino platforms it had established across multiple states.
888 is contemplating all possibilities for its US B2C operations, encompassing a prospective sale, partial divestiture, or even a complete exit from the market. The corporation cites numerous hurdles in the US, including fierce competition, substantial taxes and licensing costs, and reduced profit margins relative to other regions.
To disentangle from the SI partnership, 888 will compensate Authentic Brands Group, the proprietor of the SI brand, a sum of $50 million in installments. Although a considerable amount, this action is projected to save 888 between $6 and $7 million yearly in operational expenditures beginning in 2024.
888s Chief Executive Officer, Per Widerström, outlined his strategy for the organization, emphasizing his concentration on positioning the group for robust value generation in the upcoming period. Nevertheless, he recognized the difficult US marketplace, where heightened rivalry and the requirement for substantial capital infusion to attain profitability have resulted in a strategic evaluation of their business-to-consumer activities.
Widerström underscored the triumph of their collaboration with Authentic, which has propelled potent consumer encounters and product offerings for the SI brand, demonstrated by successive periods of unprecedented accomplishment for SI Casino. Despite this achievement, 888 acknowledges that reaching the essential scale for profitability within a desirable timeframe in the US market is improbable.
Although the strategic assessment is in progress without a predetermined schedule or assured result, 888 affirmed that its existing business-to-business agreements in the US remain unaltered.
This declaration follows a decrease in 888’s stock value in January 2024, dropping 20% since their latest financial report. Despite these obstacles, 888 stays dedicated to honing its strategic blueprint and will declare revised medium-term financial objectives in March 2024.
