Online gaming operator 888 Holdings reported Friday its financial results for the first half of 2022, which saw revenues drop 13% to GBP 332.1 million ($402 million), compared to the previous year. This was attributed in part to the implementation of safer gambling policies in the UK, ahead of the expected regulatory tightening yet to be established, and the ongoing impact of the closure of the company's Netherlands operations.
UK revenue was down 25% YoY, which along with 888’s exit from the Dutch market represented the majority of the decline. Outside these two markets, profits were up 2% compared to 2021. The business had previously stated that the drop in revenues was an expected event.
Adjusted EBITDA was also down to GBP 50 million ($60.7 million) from GBP 70.3 million ($85.4 million), a 29% decline. The business attributed the drop to costs associated with the launch of its SI Sportsbook product in a number of US states, as well as with compliance-related expenses.
Profit before tax dropped a further 66%, down to GBP 14.4 million ($17.5 million) for the 6-month period. Pro forma group revenue dropped by 1%, with the normalization of retail revenues substantially offsetting a 21% decline in online.
On these results, 888 CEO Itai Pazner, commented: “The group’s financial performance in the period primarily reflects market conditions in the UK. However, we believe the proactive actions we have taken to increase player protections and drive higher standards of player safety have put the group in an even stronger position for the future."
During the period, 888 put into place new safer gambling practices in anticipation of the UK’s regulatory changes, as the country is currently updating its 2005 Gambling Act. The long-delayed white paper is expected to be released next month.
Looking ahead, the business has divested itself of its bingo business, but has placed its hope for future growth on the July acquisition of William Hill from Caesars. The results for H1 do not include revenue from the William Hill operations, as the finalization date is not comprehended in the period.
Pazner referred to this move, and said it “transformed the group and creates very strong foundations" to support the company's ambitious growth plans. “This combination of two exceptional and complementary businesses creates one of the world’s leading online betting and gaming groups with superior scale, leading front-end and back-end technology, increased diversification across products, markets and channels, and a world class team," the executive added.
Pazner stated that in the second half of 2022, the company’s main focus will be on integration, “delivering on our synergy plans, and driving higher profitability across the business."
“This focus on integration, execution and de-leverage will unlock the huge potential from the enlarged business”, he said, and added that these actions will position the business "to take advantage of significant growth opportunities ahead of us, as we leverage our leading technologies to create a best-in-class global betting and gaming platform."