888 Holdings Reevaluates US Strategy Amidst Stiff Competition and High Costs

A worldwide gaming behemoth, 888 Holdings, is halting its US growth strategy. Confronting intense rivalry and substantial operational expenses within the saturated American market, the firm is evaluating various possibilities for its US-facing division. These include the potential divestiture of some or all of its US enterprises, withdrawing from specific states, or forging strategic alliances.

Although 888 possesses a robust collection of brands such as William Hill and Mr Green, its US endeavors haven’t met expectations. The corporation has encountered difficulties replicating its global profitability within the US, attributing high taxes and licensing charges as significant obstacles.

In a notable action, 888 is severing ties with Authentic Brands Group, terminating their arrangement to utilize the renowned Sports Illustrated trademark for internet wagering. This choice will obligate 888 to an initial payment of $25 million, succeeded by an additional $25 million distributed across 2027-2029. Nevertheless, this strategic withdrawal is projected to reduce the company’s yearly operating expenses by $6-7 million beginning in 2024.

888s Chief Executive, Per Widerström, has stressed the firm’s requirement to evolve for sustained prosperity since assuming leadership. He recognizes the escalating rivalry and necessity for substantial capital infusion to maintain profitability within the American market.

Widerström emphasizes the favorable influence of their collaboration with Authentic, especially the unprecedented success of SI Casino, showcasing the potency of the SI trademark. Nevertheless, he concedes that attaining the requisite scale for profitability in the US within a practical timeframe is improbable. Consequently, 888 is swiftly assessing its US B2C (business-to-consumer) activities and will unveil its blueprints for the entire organization by mid-March.

Although the strategic evaluation has no predetermined duration or assured result, 888 affirms that its current US B2B (business-to-business) operations remain untouched.

Despite a 20% share price drop in January 2024 following the publication of its quarterly and annual financial reports, 888 stays dedicated to its strategic transformation and will declare fresh medium-term financial objectives in March 2024.