Share
The first few months of 2024 have not been kind to Sports Illustrated.
The magazine laid off nearly its entire staff earlier this year, bringing an assumed end to an iconic sports publication. Now, that bad luck has extended to SI’s online gaming franchises. 888 has announced it will part ways with SI’s online casinos and sportsbooks.
888 CEO Per Widerström said the company believes it will be too difficult to efficiently scale its partnership with SI and its owner, Authentic Brands Group.
“Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings,” Widerström said in a release. “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.”
888’s termination of its Sports Illustrated-branded online casinos and sportsbooks comes around 15 months after it first announced its SI partnership.
SI news comes amid 888 strategic review
The decision to cut Sports Illustrated’s casinos and sportsbooks from 888’s lineup came amid a strategic review of company operations.
888 (London Stock Exchange:888) noted that its gross profit margins are below group averages in the four states it operates: Colorado, Michigan, New Jersey, and Virginia. Additionally, 888 felt it couldn’t overcome its competition’s funding advantages and couldn’t invest the money necessary to succeed.
“In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability,” Widerström said in the release.
As such, 888 decided to part ways with its SI Sportsbook operations in Michigan, Colorado, and Virginia, and SI Casino in Michigan.
888’s decision will cost the company $50 million: $25 million now and another $25 from 2027 to 2029.
In return, 888 said it will save anywhere from $6 million to $7 million annually in 2024 and 2025.
888 may sell off remaining US iGaming operations
The choice to terminate its contract with SI Sportsbook and SI Casino may signal a wider move to end its U.S. business-to-consumer (B2C) operations entirely. Practically speaking, that could mean the sale of its New Jersey online casino, 888casino.
“[We] will consider all potential alternatives that can deliver value for the business,” the company said. “Such alternatives could include the sale (in whole or in part) of the Group’s US B2C business, the controlled exit of US B2C operations, or other possible strategic transactions.”
888 said that its strategic review is not over, and that there could be more changes ahead.
