UK-listed online gambling operator 888 Holdings says its fledgling sports betting product has come of age and is now contributing nearly 10% of group revenue.
Numbers released Wednesday show 888’s overall revenue rising 19% to $262m in the six months ending June 30, while adjusted earnings rose 8% to $44.1m and profit before tax jumped 39% to $27.8m.
888’s dominant casino vertical was up 31% to $137.4m thanks to a 35% rise in active players, which the company attributed to innovative CRM and premium content, as well as the launch of its 777.com brand at the end of 2015, and cross-sell from Sport.
Speaking of, 888Sport saw its revenue jump 63% to $25m thanks to the Euro 2016 tournament, improved performance in Spain and regulated market launches in Italy and Denmark. 888 says sport remains “a major growth opportunity” in terms of both revenue and customer acquisition.
888’s traditionally robust poker product was the lone decliner, falling 7% to $43.1m, despite a 3% rise in first-time depositors.
Bingo revenue gained 2% to $23.1m, although the gain would have been 9% but for the UK pound’s poor showing against the US dollar. 888’s Dragonfish B2B product reported revenue rising 6% to $32.5m, thanks primarily to its bingo network, which added 16 new skins in H1.
888 made scant mention of its US operations, saying only that trading was “in line with our expectations.”
The cutthroat competition for Euro 2016 punters helped drive marketing expenses up one-third, while gaming duties were up over 38% to $30.2m. The latter figure was primarily blamed on the UK’s point-of-consumption tax and European VAT, higher revenues in Italy and Spain, as well as entry into the regulated markets of Denmark, Austria, Romania and Ireland.
Looking forward, 888 says Q3 has started on a tear, with average daily revenue through August 27 rising 15% year-on-year, and the company expressed confidence in realizing its full-year guidance.
RANK GROUP MERGER DEAD AS A DOORNAIL
Speaking to analysts, 888 CEO Itai Frieberger said his company’s previously announced plans to merge with UK rival Rank Group was “not something that we’d like to do” after the pair’s joint bid to acquire William Hill was rejected.
Frieberger said the 888-Rank bid for Hills failed in part because the Sunday Times published the news before the bidders had a chance to talk to Hills’ board. Frieberger said it was “very unfortunate” that the news was “all over the press” before Hills heard it from 888-Rank’s lips, because it “didn’t allow us to have a conversation behind closed doors.”
Frieberger said 888 would continue to entertain the possibility of future tie-ups with rivals but such possibilities wouldn’t dictate the company’s strategy. “We will continue to grow the business with or without M&A.”
