Most of the information and stats in this article is taken from information provided by corporate.888.com.
Following the sale of its bingo business to Broadway Gaming Ltd, British gambling operator 888 Holdings (LSE: 888) is focusing its efforts on the growth in other verticals such as sports betting and iGaming, along with on the expansion across core and growth markets.
In addition, the acquisition of the non-US assets of William Hill, which is planned to complete in Q2 2022*, would deliver important scale benefits, as well as building leading positions in some of its high priority markets, with the introduction of William Hill and Mr Green, an online casino operator, licensed and regulated in the United Kingdom. The proposed deal will almost triple the size of the business, provide huge amount of games like slots, blackjack, roulette and others.
In terms of sustainable competitive advantages, in 2021, the company launched several new products, including the roll out of its in-house developed sports betting product to the UK, and concluded the migration of over 70% of the sport business to the new platform. In addition, the group continues to invest in its flagship 888casino product. Over 870 new casino games including new slots themes were launched and customers are now also enjoying more than 160 exclusive games developed by Section8, 888’s in-house games studio. The studio launched 17 new games during the year, including some hit titles like Mad Max Fury Road and Millionaire Genie Megaways and some of the best slot machines to play. Over the next few years, the company plans to double its investment in Section8.
The Group also continued to benefit from the launch of its latest poker platform, Poker8, at the end of the prior year.
The company’s core markets of the UK, Italy and Spain are large, regulated markets where 888 has strong market positions. In 2021, these markets generated 59% of total revenue from those countries and the 888 aims to further grow market share in these markets.
Growth markets represent a small cohort of high-growth markets, such as Germany, Romania, Ireland, and Canada, that made up 21% of revenue in 2021. These are typically regulating or newly-regulated markets that have attractive long-term growth potential, where the company is investing to build 888 into a top brand and differentiating with the great amount of slots games they provide. The recent launch of its 888sport, 888casino and 888poker brands under a local license in Ontario, Canada, reflects the Group’s focus on building strong positions in attractive regulated markets globally.
The US online betting and gaming market presents a meaningful long-term strategic opportunity for 888, which intends to leverage the technology and operating capabilities in partnership with the iconic American Sports Illustrated brand through SI Sportsbook. In North America, the company’s revenue grew by 33.7% to $125.6m in 2021. They plan to launch in several new markets during 2022, including Ontario, 3-4 additional states with SI Sportsbook. It also expects to launch poker on a B2B basis in Michigan pending regulatory approval.
US revenue increased by 6% to US$22.0m in 2021, reflecting a good performance for the 888casino brand in New Jersey. During the year, the Group launched in Pennsylvania on a B2B basis with partner the World Series of Poker and is ready to launch WSOP in Michigan during 2022 subject to regulatory approval.
To keep on growing globally, 888 has also formed a new joint venture, called 888AFRICA, that will operate the company’s brands in online betting and gaming markets across selected regulated markets in Africa. 888 has invested in a minority stake in 888AFRICA, with the option to increase this to take control, and ultimately own up to 100% of the venture in the future.
888AFRICA will be led by Christopher Coyne, former Chief Marketing Officer and Chief Customer Officer at The Stars Group; Andrew Lee, former MD – Sportsbook of The Stars Group and current Chairman of Voxbet; Alex Rutherford, former Chief Product Officer at Editec Online; Ian Marmion, former Sportsbook Trading Director at The Stars Group; and Helen Scott-Allen, former CFO of Premier Bet.
Under the terms of the agreement, 888AFRICA will pay a brand license fee to use and operate 888’s online betting and gaming brands in selected regulated markets in Africa. The brands will operate via a third- party technology platform, with products and content designed for the local preferences of the African market. Initially, subject to licensing, 888AFRICA expects to launch in four markets on the continent during 2022.
Q1 2022
The company has just announced a trading update for the first three months of the year ended 31 March even featuring the business review for B2C and B2B sectors.
B2C
Gaming continues to be driven by casino, where the company continues to enhance the user experience through product and content leadership as well as AI-driven personalization. 888 launched several new casino games, and rolled out an AI-powered chatbot facility to improve customer service.
Betting stakes declined by 28% against the prior year, and revenue declined by 42%, driven by decline in stakes.
B2B
Revenue from 888’s B2B division decreased slightly on both a year-over-year and sequential basis, primarily driven by the bingo segment, with the US business growing both year-over-year and sequentially driven by the launch in Pennsylvania.
In March 2022, the Group launched the World Series of Poker (“WSOP”) brand in Michigan under its partnership with Caesars Interactive Limited.
* The two companies have agreed that the assets of William Hills now have an enterprise value of between 1.95 billion pounds and 2.05 billion pounds, which means 888 will have to pay a cash consideration of about UK£585m, nearly 30% below the previously agreed UK£834.9m, according to a press release issued by 888.