William Hill owner 888 revealed today it will pay $50 million (£39 million) as the price of an exit from its failing US business.
The gambling giant launched in the US in 2021, later than many rivals, as states legalised sports betting and online casino games. It signed a licensing deal with the owners of Sports Illustrated, using the iconic magazine’s name for its sportsbook.
Firms like Flutter and Entain have had great success in America, raking in millions from events like February’s Super Bowl, but 888 failed to gain any ground. It made just £20 million in revenue in 2022, good for a 0.2% market share, and lost more than £12 million.
After it failed to attract Sports betting customers, 888 aimed to focus the brand more on online casino games, where smaller players in the market are usually more profitable. However, American states have been slower to legalise those games.
888 will now cut its losses, launching a review that could lead to a sale, “controlled exit”, or “other possible strategic transactions” for its American arm. It will “part ways” with Sports Illustrated, which has faced difficulties of its own on the publishing side this year, with waves of layoffs and fears that it could stop printing entirely.
The betting giant will pay $25 million up front and another $25 million between 2027 and 2029 to terminate the partnership.
888 also offers some business-to-business services in the US, which will not be part of the review.
888 boss Per Widerstrom said: “Since commencing my role as CEO I have been focused on ensuring the Group is set up to deliver strong value creation in the coming years. In the US, the intensity of competition and requirement for scale means huge investment is required to reach profitability.
“Our partnership with [Sports Illustrated parent company] Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings. A series of record-breaking months for SI Casino has underscored the strength of the SI brand. However, despite these successes, we have concluded that achieving sufficient scale in the US market to generate positive returns within an accelerated timeframe is unlikely.
“The strategic review of our US B2C operations will continue at pace, and I look forward to updating shareholders on our plans for the wider Group in late March."
Markets responded positively, with shares in 888 up 3.3% to 85.6p.
