Share
Betting and gaming company 888 announced the conclusion of its strategic review of US B2C (business to consumer) operations. 888 Holdings is the name behind internationally recognized products, including online casino and sportsbook entities William Hill, 888 and Mr Green.
The company has agreed to sell the selected assets to Hard Rock Digital, expected to be completed in several phases, with completion in Q4 2024. 888’s exit from the US gambling market follows a series of strategic moves, including a review of the company’s operations.
On March 26, 888 Holdings revealed plans to change its new “Value Creation Plan,” including intentions to rebrand and change its name to “Evoke Plc.” In an 888 Holdings press release, the company said the new brand will “better reflect the strength of the group’s multi-brand operating model and its vision and mission to make life more interesting by delighting players with world-class betting and gaming experiences.”
The rebrand revelation came during the company’s announcement of what it called “disappointing” financial results. The results reflected the fiscal year ending Dec. 31, 2024, showing a 25% decrease in earnings but growing revenue.
Hard Rock Digital to take over 888’s US B2C assets by Q4 2024
888 did not disclose much information regarding financial terms nor details of which assets Hard Rock Digital will purchase. What is known, however, is that the company expects the deal to close by the fourth quarter of the year, subject to regulatory approvals.
888 said the exit of US B2C operations would realize a recurring annualized benefit to adjusted EBITDA of nearly $31.6 million from 2025 onwards. The Group plans to reinvest approximately $12.6 million of these savings into growth and value-creation initiatives.
888 (LSE: 888) expects to incur net one-off cash costs of around $50.6 million with the exit of the US market. The company also said this includes the announced brand license termination fee, with payments occurring between 2024 and 2029.
Rebrand announcement is part of a new strategy to focus on core markets
As announced in the press release on March 26, 888’s name change is part of CEO Per Widerström‘s new strategy to focus on core markets – Denmark, Italy, Spain, and the UK – contributing about 85% of revenue.
The company also plans to reset its operating model and concentrate on cost savings. An 888 Holdings LinkedIn post said:
“This morning, CEO Per Widerström and CFO Sean Wilkins presented our 2023 Full Year Results to analysts and investors. They laid out our new Value Creation Plan to drive profitable and sustainable revenue growth, and a higher return on equity.
Our proposed new name, Evoke, is a clear signal of our new direction as we embrace the strengths of our past and build on this to continue to evoke delight in our customers with world-class betting and gaming experiences. We are one company with a clear, united strategy, mission and vision.”
The proposed name change is subject to shareholder approval at this year’s annual general meeting.
888 revealed ‘disappointing’ financial results
888 Holdings FY2023 Results showed revenues of $2,161.3 million during 2023, a year-over-year increase of 38%. However, without the second half of William Hill’s revenues, earnings decreased by 7.5%, reflecting dotcom compliance changes and changes in the UK online customer mix.
Widerström explained that customer mix changes in the UK were affected mainly by introducing additional safer gambling measures. Another factor that impacted the results was a change in 888’s marketing approach to focus more on sustainable revenue and profitability.
The company said it had now supported its executive team with “outstanding skills and experience to drive execution,” appointing seven out of ten new positions. Widerström added:
“We are now clear on what success looks like, we have the team and capabilities to deliver, and I am confident that the execution of our plan will deliver a high return on equity from sustainable profitable growth, enhanced by deleveraging.”
Earlier this month, 888 parted ways with Sports Illustrated, nearly 15 months after it announced its SI partnership. 888 said its gross profit margins were below group averages in Colorado, Michigan, New Jersey and Virginia due to intense competition.
