888 Holdings has announced that it is undertaking a strategic review of its US operations and will now consider the sale of the group’s B2C business in the United States.
In a statement released today, the company, which owns William Hill (UK), 888 and Mr Green, said that it would also consider a controlled exit of US B2C operations, or other possible strategic transactions.
Right now, 888 is currently active in four states with SI Sportsbook live in Michigan, Colorado, and Virginia, SI Casino live in Michigan, and 888casino live in New Jersey.
However, today’s announcement also revealed that the company would terminate its partnership with Sports Illustrated (SI). As part of the termination agreement, 888 has agreed to pay SI $25 million immediately and a further $25 million between 2027 and 2029.
According to the statement, the group’s US profit margin is lower than the overall group level. The company states that this is a reflection of the significant costs of operating in the US and the competitive nature of the local market. As a result, the group has come to the conclusion that its current operations in the US will not offer optimal returns. The termination of the SI deal is projected to result in cost savings of $6 million to $7 million per year.
Per Widerström, CEO of 888, commented:
“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.”
No timeframe has been set for the completion of the strategic review.
In August of 2021, 888 and SI announced a long-term partnership agreement ahead of its launch in the state of Colorado. Then, in an unanticipated move, the company pulled its sports betting product from the New Jersey market in December of the same year.
An experienced iGaming commentator and analyst based in New York City - Jenny reports on regulation and gambling industry news and events.