888 potentially considering US exit; ends SI allegiance
Gross profit margin is lower in the region than group level.
888 Holdings has announced a strategic review of its US B2C operations.
The operator includes brands such as William Hill, 888 and Mr Green, and through this review is looking to find ways to deliver value for the business, which could include the sale of its US B2C business or a US market exit as a whole.
Currently, 888 has operations in Michigan, Colorado, Virginia and New Jersey, but the company has said gross profit margin in the US is lower than the group’s level, and the costs within the market means it will be unable to make meaningful returns.
As well as this review, the company has mutually agreed to conclude its partnership with Authentic Brands Group, which it believes will lead to operating cost savings of approximately $6m to $7m per year in 2024 and 2025. This would put an end to the Sports Illustrated sportsbook.
Despite the news, 888 has emphasized that its existing B2B arrangements in the US are unaffected.
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888 CEO Per Widerström said: “Since commencing my role as CEO I have been focused on ensuring the group is set up to deliver strong value creation in the coming years. In the US, the intensity of competition and requirement for scale means huge investment is required to reach profitability.
“Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings. A series of record-breaking months for SI Casino has underscored the strength of the SI brand. However, despite these successes, we have concluded that achieving sufficient scale in the US market to generate positive returns within an accelerated timeframe is unlikely.
“The strategic review of our US B2C operations will continue at pace, and I look forward to updating shareholders on our plans for the wider group in late March.”
After 888’s FY23 financial results, which showed revenue declines, it is almost unsurprising that this news has broken, underlined also by DraftKings reportedly considering but turning down the opportunity to bid for 888 last summer.
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