888 Holdings Reports Triple Profit in Record Year Thanks to Lockdowns

Posted on: March 9, 2022, 06:47h. 

Last updated on: March 9, 2022, 12:01h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

888 Holdings said Wednesday its pretax profit tripled on record revenue in 2021, as closures of land-based gambling venues sparked an online gaming boom in its core markets.

888 Holdings
888 CEO Itai Pazner said the US market remains a huge opportunity for his company, which has created a platform for profitable long-term growth. (Image: 888 Holdings)

Lockdowns proved to be good for business. In the first three months of the year, the UK was living under severe coronavirus restrictions, as the Alpha variant that originated in England threatened to overwhelm the health care system.

The London-listed company said revenue for the year ending December 31, 2021, was at an all-time high of US$980.1 million, up 15 percent om the previous year. That yielded profit before tax of $81.3 million, up 205 percent on the year prior. Annual revenue from those core markets, the UK, Italy, and Spain, rose 18 percent year-on-year, the company said.

As an online-only business, 888 was well-positioned to benefit from the drift towards new forms of online entertainment by a housebound populace.

The UK Gambling Commission reported the highest online slot yield in UK history for March, the last month of full lockdown. Meanwhile, anti-gambling campaigners expressed concern lockdown was creating a perfect storm for an escalation in problem gambling.

‘Transformed Scale’

Despite record results, 888 did not declare a final dividend, citing “potential capital requirements expected as part of the pending William Hill transaction.”

In September, the company announced it had reached a deal with Caesars Entertainment Inc. to acquire William Hill’s non-US assets for $US3 billion. It expects to complete the transaction in the second quarter of this year.

It was another record year from a financial perspective, and we have truly transformed the scale of the business over the past two years,” said 888 CEO Itai Pazner in an earnings call. “This step-change in scale has come from a clear market focus on regulated markets, which now make up three quarters of revenue, and where we are seeing really positive market share trends.”

Pazner said that the burgeoning US market remained a “huge opportunity,” and 2021 had seen “great progress in creating a platform for profitable long-term growth in the market, with most of the required assets already now in place.”

In December, the company announced it would offload its bingo business so that it could focus on the US and its core offerings.

Record Revenues, Record Fine

888 said it faced headwinds in 2021 in the form of tightening regulatory controls, particularly in Germany, which launched its new online gaming regime in July. The previously gray market now came with an onerous 5.3 percent tax on player stakes and a €1 maximum bet on slots.

Meanwhile, the company said it had to implement safer gambling measures, particularly in the UK, to reduce the risk of potential harm to customers. Last week, the UKGC fined 888 ￡9.4 million (US$12.6 million) for various social responsibility and anti-money laundering failings.

The regulator warned 888 that any future infractions would give it cause to “seriously consider the suitability of the operator to uphold the licensing objectives and keep gambling safe and crime-free.”