EGR Power 50 2021: 7. 888 Holdings
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7. 888 Holdings (9)
FINANCIALS: B2C revenue for the first three quarters of 2021 was $729.4m, up 28% YoY. Average daily actives rose 6% in Q3 compared with Q3 2020
STRATEGY & IMPACT: Gaming was 81% of H1 revenue, yet the in-house sports platform and acquisition of Hills can grow betting’s share (15% in H1) and rebalance the product mix. Has reduced its reliance on casino VIPs in recent years
GEOGRAPHIC REACH: The acquisition of William Hill expands 888’s footprint in key markets like the UK and across Europe. Three-quarters of H1 revenue was from regulated and taxed markets
INFLUENCE & LEADERSHIP: Next year will mark 25 years since 888 was founded, before evolving into a giant of igaming through organic growth rather than M&A, until the Hills deal
It certainly has been a busy 2021 for 888, an obvious highlight being the acquisition in September of William Hill’s non-US assets from Caesars Entertainment in a deal worth £2.2bn. With that purchase – hailed as “transformational” by 888 – yet to complete, we are keeping 888 and William Hill separate in the Power 50 rankings.
Another headline-grabbing development was the partnership the gaming-led operator struck with iconic US sports brand Sports Illustrated (SI). The result of the tie-up with a media outlet boasting 35 million monthly unique visitors was the launch of SI Sportsbook, initially in Colorado for the new NFL season, as 888 seeks to achieve greater cut-through than with 888sport. The FTSE 250 operator insists its scalable in-house tech, coupled with SI’s brand, means SI Sportsbook can compete “effectively and profitably”. Naturally, that’s easier said than done.
In Europe, 888 has made eye-catching progress in regulated markets like the UK (by far its largest in terms of revenue), Italy, Spain and Romania, resulting in record half-year B2C revenue of $509m, up 41% YoY. This was followed by more modest B2C gains of 7% in Q3 due to the third quarter of 2020 being so strong. B2C gaming’s 27% YoY revenue gains across the group during the first three quarters of this year stood out, with growth attributed to new content, marketing and AI-powered personalisation.
On face value, B2C sports betting revenue slumping 15% YoY in Q3 probably set alarm bells ringing among 888 investors, but the decline was blamed on Q3 2020’s condensed sporting calendar due to Covid-19 and that Q3 2021 revenue was up 21% on Q3 2019. And talking of sports betting, the rollout of its in-house betting platform is a work in progress, with the latest international jurisdiction being Germany – a market 888 remains pretty bullish on despite its tough regulatory environment.
Yet it is the victory in the battle to acquire William Hill’s non-US assets, including its UK retail estate and the Mr Green subsidiary, that will elevate 888’s standing in key markets – and the sector. It’s also no longer always a bridesmaid, never the bride where M&A is concerned. CEO Itai Pazner best summed it up during the third-quarter earnings call: “I don’t think it is an exaggeration to say that the third quarter of 2021 was the most important quarter in 888’s history from a strategic perspective.”