888’s 2016: casino and sports good, poker and bingo bad


888-holdings-casino-2016UK-listed online gambling operator 888 Holdings posted double-digit gains in 2016 thanks to its surging casino and sports betting verticals.

Figures released Tuesday show 888’s overall 2016 revenue hitting an all-time high of $520.8m, a 13% improvement over 2015’s total, while earnings improved 12% to $90.2m. The figures were even more impressive in constant currency terms, with revenue up 18% and earnings jumping 24%.

888’s mainstay casino product continued to bring home the bacon, improving 21% to $279.3m, while its Kambi Sports Solutions-powered sportsbook jumped 49% to $51.9m. Both verticals benefited from a 22% rise in marketing spend, which as a share of revenue was up three points to nearly 33%. 888’s new casino brand, 777.com, which launched at the end of 2015, was said to be “performing well.”

Things weren’t so bright at 888’s poker operations, which saw revenue fall 3% to $84.4m. 888 said the sagging poker division nevertheless “outperformed” the global poker market and noted that first-time depositors rose 6%, although this latter figure was dwarfed by first-time casino (23%) and sports (52%) depositors.

Bingo revenue was off 5% to $41.8m, which the company blamed in part on the devaluation of the UK pound following last year’s Brexit vote, as bingo revenue actually improved 7% in constant currency.

888’s B2B division reported revenue falling 3% to $60.6m despite adding 23 new skins to the Dragonfish Bingo network last year. The company sees strong growth potential in its new Casino Flex platform, which now supports 26 brands.

Mobile continues to gain in importance, accounting for 60% of UK B2C revenue last year, up from 47% in 2015, and mobile revenue hit an all-time high of 66% in H2 2016.

While 888’s core UK market enjoyed 5% growth last year, 888’s Spanish business grew 45% and now represents the company’s second-largest market. 888’s Italian site enjoyed even larger relative revenue growth, improving 66% thanks to the addition of sports betting in Q1 2016.

Regulated markets accounted for 61% of 888’s group revenue in 2016, up from 59% in 2015. In constant currency terms, regulated markets grew 24% last year, twice the rate of 888’s dot-com business. Continental European regulated market growth was up 60%.

888 may have failed to acquire rival William Hill in last year’s joint bid with Rank Group, but CEO Itai Frieberger says 888 will “continue to evaluate and explore appropriate opportunities.” That said, Frieberger noted that the company doesn’t feel compelled to join in the “speed-dating” consolidation fever gripping the UK industry, as “the results coming out of the business are so strong.”

Case in point: with pre-tax profit rising 82% to $59.2m, 888 has decided to pay a special dividend, the fifth straight year the company has made it rain buckets for shareholders. Frieberger said there was “no point sitting on the cash … We’re relatively small and we have enough to do what we want to do.”