Online operator 888 Holdings saw its H1 revenues drop 13% in the first half of 2022 to £332.1m compared to £380.9m in the prior year period, due in part to implementation of safer gambling policies in UK ahead of expected future regulatory tightening.
The results do not include revenue from William Hill, which 888 acquired on 1 July, after the period in question ended.
UK revenue was down 25% year-on-year, which along with 888’s exit from the Dutch market represented the majority of the decline. Revenue outside of these two markets were up 2% compared to the previous year period. The business had previously stated that it this fall was expected.
888 CEO Itai Pazner blamed UK market conditions for the decline:
“The group’s financial performance in the period primarily reflects market conditions in the UK.”
“However, we believe the proactive actions we have taken to increase player protections and drive higher standards of player safety have put the group in an even stronger position for the future,” he said.
888 put into place new safer gambling practices in anticipation of a more stringent future regulatory environment in the UK. The country is currently in the process of updating its 2005 Gambling Act, the first stage of which is the long-delayed Gambling Act review white paper – which is expected to be released next month.
Earnings before income, tax, depreciation and amortization (EBITDA) were also down to £50m from £70.3m, a 29% decline. The business blamed the large decline compared to revenue on support costs associated with the launch of its SI Sportsbook product in a number of US states, as well as compliance-related expenses.
Profit dropped a further 66%, down to £14.4m for the 6-month period from £41.9m the previous year.
Pro forma revenue, which includes William Hill revenue, dropped by 1%. While online drops revenue was down by 21%, most of this was offset by a normalisation of retail operations following the end of most covid measures.
The business saw streamlining in the period as it divested itself if its bingo business but placed its hope for future growth on the July acquisition of the non-US operations of gaming operator William Hill from Caesars.
“The combination with William Hill, which we completed soon after the period end, transformed the group and creates very strong foundations to support our ambitious growth plans,” said Pazner.
“This combination of two exceptional and complementary businesses creates one of the world’s leading online betting and gaming groups with superior scale, leading front-end and back-end technology, increased diversification across products, markets and channels, and a world class team.”
Pazner continued elaborating on the business’s growth strategy.
“In the second half of 2022, our main focus is on integration, delivering on our synergy plans, and driving higher profitability across the business. This focus on integration, execution and de-leverage will unlock the huge potential from the enlarged business.”
“These actions will position us to take advantage of significant growth opportunities ahead of us, as we leverage our leading technologies to create a best-in-class global betting and gaming platform, and our portfolio of world class brands, to grow market share and profitability in some of the most attractive markets in the world.””