BUSINESS

888 Holdings CEO Mattingley shifting to chairman as H1 earnings rise

TAGs: 888 Holdings, AAPN, all american poker network, brian mattingley, New Jersey, New Jersey Online Gambling

888-holdings-mattingley-chairmanBrian Mattingley (pictured) will relinquish his role as CEO of UK-listed online gambling operator 888 Holdings to become executive chairman of the firm effective May 2015. Mattingley, who assumed 888’s reins in March 2012, made the announcement Wednesday as the company released its official H1 revenue report. Mattingley will replace outgoing chairman Richard Kilsby, while COO Itai Frieberger and CFO Aviad Kobrine will assume the CEO’s duties.

888’s H1 numbers largely mirror the earnings preview released earlier this month, with revenue up 13% to $225.1m and adjusted earnings up 27% to $49m. B2C revenue rose 9% to $192.8m while B2B revenue jumped 40% to $32.3m. Mattingley celebrated the “record breaking” results, led by the “standout” performance in the B2C casino vertical, which saw revenue rise 14% to $107.6m. Poker defied a “highly competitive and low growth market” by posting a 3% revenue bump to $48.1m while bingo rose 9% to $24m.

The only negative came via the ‘emerging’ vertical, which includes 888’s Kambi Sports Solutions-powered sportsbook, which fell 6% to $13.1m. Nonetheless, 888Sport enjoyed the 2014 FIFA World Cup, with revenue up 102%. August saw 888 launch its oft-delayed Spanish-facing sportsbook and a mobile launch is planned for the vertical later this year. 888 also launched its mobile casino in Italy in August. 888 described itself as “now a truly ‘mobile first’ business,” with 29% of UK B2C revenue coming via mobile devices, up from 11% in the same period last year.

Operating expenses rose 19% to $65m, which Mattingley attributed to sportsbook costs as well as 888’s nascent US-facing operations. 888’s share of the US-facing All American Poker Network (AAPN), a joint venture with hedge funder Marc Lasry’s Avenue Capital, saw losses nearly triple year-on-year to $4.4m. 888 says AAPN’s New Jersey operations have been “slower than what was initially expected.” 888 is hoping to launch a shared poker liquidity pool between Nevada and Delaware to capitalize on the deal the two states inked in February, but 888 offered no timeline on this rollout. 888 is the only poker operator to be licensed in all three US states that have launched regulated online markets.

Looking ahead, 888 says average daily revenue in Q3 to date is up 15% year-on-year. In terms of future opportunities, 888 is keeping a close eye on the Netherlands’ progress towards a regulated online gambling market. 888 also says it’s “finalizing preparations” for the introduction of the UK’s new 15% point-of-consumption tax (POCT), which is due to kick in Dec. 1. 888 expects the tax will “undoubtedly have an impact” on its UK business, and while it will take time to “fully understand” its scope, 888 is developing “strategies to mitigate” the POCT’s financial blow.

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