The gaming and wagering behemoth, 888 Holdings, is reevaluating its presence in the United States. Amidst intense rivalry, elevated operational expenses, and thinner profit margins than anticipated, the firm is exploring every avenue to optimize returns for its investors. This might involve divesting portions or the entirety of its American ventures, completely withdrawing from the market, or forging fresh strategic alliances.
Presently, 888 operates across four states within the US, utilizing several brands such as the renowned William Hill and Mr Green, alongside SI Sportsbook and SI Casino. Nevertheless, the US market has presented difficulties, with substantial taxes and licensing costs impacting profitability.
Further intensifying the situation, 888 recently dissolved its collaboration with Authentic Brands Group, relinquishing the sole rights to utilize the Sports Illustrated trademark for internet gambling. This choice will entail an initial outlay of $25 million for 888, succeeded by an additional $25 million disbursed over a span of years. However, this action is projected to yield annual savings of roughly $6-7 million in operational expenditures beginning in 2024.
888s chief executive, Per Widerström, outlined his outlook for the company’s trajectory, stressing the importance of adjusting to the shifting dynamics of the American market. He recognized the heightened rivalry and the significant capital injections needed to reach profitability within the territory.
Widerström emphasized the positive results of their alliance with Authentic in bolstering the SI brand, especially in elevating customer satisfaction and product selection. This joint effort has yielded unprecedented months for SI Casino, showcasing the brand’s capabilities. Nevertheless, despite these achievements, 888 acknowledges the hurdles of expanding their US operations to attain desired profits within a practical timeframe.
Consequently, 888 is conducting a comprehensive assessment of its business-to-consumer operations in the United States. The conclusions of this evaluation will be disclosed to stakeholders towards the end of March. While the schedule and results remain unclear, 888 guarantees that its current business-to-business activities in the US will remain unaffected.
This statement comes after a phase of stock depreciation for 888, with shares plummeting 20% since their December financial report. Despite these obstacles, 888 remains dedicated to formulating a solid strategic roadmap and will unveil new mid-term financial objectives in March 2024.
