888 Holdings Loses Ground, Reports 18 Percent Drop In Revenue

Posted on: April 20, 2022, 09:26h. 

Last updated on: April 21, 2022, 03:21h.

888 Holdings had a record-setting 2021, but wasn’t able to keep the momentum going this year. In its latest financial health report covering the first quarter of the year, the gaming operator reported an 18% year-on-year drop.

Itai Pazner
Itai Pazner, CEO of 888 Holdings. He just had to break the news to shareholders that the company’s revenue dropped in the first quarter of the year. (Image: Yogonet)

888 Holdings, with gaming operations in virtually every continent, had a strong 2021, despite a weak fourth quarter. Sales increased, costs decreased, and the company continued to expand its operations. So far, it won’t be able to say the same thing for 2022 unless things turn around.

In its latest financial health report, 888 acknowledged that its performance dropped in all of its verticals in the year’s first quarter. Its total revenue was $224 million, which is $49 million less than a year earlier.

888 reported an 18% year-on-year drop in revenue for its B2C segment for the first quarter. The segment accounted for $215 million of the total take, with B2C gaming revenue most. The figure was $191 million, 14% less than a year ago, while B2C sports betting revenue was $24 million. This represents a year-on-year decrease of 42%.

As the numbers reflect, most of the operator’s B2C gaming segment centers on casino activity. Through the continued addition of new online casino games, 888’s casino gambling finds more support from users.

2022 Starts Sluggish

The company, which paid a $12.6-million fine to the UK Gambling Commission (UKGC) in March, also attributed part of the segment’s strength to including a new artificial intelligence-based chat function. This, it asserts, helps to improve the user experience.

888’s sports betting segment continues to suffer following the company’s withdrawal from the Netherlands. In addition, a 28% drop in stakes compared to the first quarter of last year contributed to the slowdown.

Exacerbating the decline was an increase in spending. 888 invested more in marketing and advertising during the first quarter, especially in the North American market, as it looked to increase its foothold. It also launched the World Series of Poker (WSOP) in Michigan in the US and Ontario in Canada, which required additional financial resources.

It’s not done yet, either. The WSOP is most likely coming to Virginia this May, which will require additional funding.

In general, 888’s B2B operations slowed. The segment had revenue of $9 million, a year-on-year decline of 6%. Part of this followed the sale of its bingo operations to Broadway Gaming last December. The constantly-changing UK gaming environment also proved detrimental to more positive results.

The B2B segment didn’t completely suffer, though, as there was a small glimmer of improvement. With the help of a launch in Pennsylvania, 888 saw a small gain in revenue in the US.

Compared to the fourth quarter of last year, the results are inconsistent. B2C revenue added 1%, but B2B revenue lost 2%.

William Hill Acquisition Vital

888’s purchase of William Hill assets in Europe will be vital to the company’s growth. Delays are slowing down the completion of the acquisition, but the company is confident that everything will wrap up in the next six to eight weeks.

888 will have to clear a UKGC hurdle for the purchase to move forward. The regulator is reviewing William Hill’s license, which may cost 888 in the long run. The company is preparing for that eventuality, allocating £15 million (US$19.57 million) in the event it has to pay up.

Once 888 crosses the hurdle, it will be in a better position. Still, analysts view the acquisition as a major coup but caution that the company’s growth will be slow.