William Hill owner 888 slipped to a loss as UK revenue declined amid stricter regulations to protect vulnerable gamblers, but the business appears to have finally put a chaotic six months in past as it says the latest Gambling Commission probe into its operations will have no impact.
UK revenue was down by 3% to £615.3 million on a like-for-like basis for the business, which bought the country’s biggest high-street bookie William Hill last year. It said this was mostly due to a pivot towards lower-spending punters, as new rules were announced in April to ensure betting operators perform financial checks on those who spend more.
The group made a loss for the year thanks in part to high interest rates, having taken on substantial levels of debt for the acquisition.
The business has had a turbulent year, starting in late January when longtime boss Itai Pazner quit amid an investigation into the company’s anti-money laundering checks in the Middle East.
888 also paid the largest fine in UK gambling history earlier this year, for failings at William Hill that occured under previous ownership.
In June, a group named FS Gaming, including former Entain boss Kenny Alexander, bought a stake in 888, with the aim of making Alexander 888’s CEO.
However, those plans were scuppered when the Gambling Commission said it was reviewing 888’s licence, citing an HMRC bribery investigation into activities that occurred while Alexander was in charge of 888.
When the review was launched, 888 warned its licence was at risk and said it therefore had no choice but to end talks about putting Alexander in charge. With those talks ended, 888 today said it anticipates no impact from the review.
With the group having also paid a £2.9 million fine in GIbraltar, where its business aimed at the Middle East was based, it appears that a line may now be drawn under a turbulent period.
Julie Palmer, partner at Begbies Traynor, said: “Until recently you wouldn’t have bet on 888. It lost its chief executive in January after a failure to follow anti-money laundering processes and last month had its UK licence put under review by the Gambling Commission.
“But today’s results look like steadying the horses. New boss Per Widerström takes the reins next month, and 888 says the Gambling Commission’s review is not expected to impact its operations.
“However, such problems will be an unwelcome distraction, with 888 still working on integrating William Hill, which it acquired in a £2bn deal last year.
“888 says it will now achieve its target of £150m in savings from combining the two businesses a year earlier than first expected, but with the industry under increased scrutiny after a run of scandals that’s not a sure-fire bet.
“The company is also facing challenges after the Government’s gambling White Paper which has placed hurdles in the way of punters betting large amounts of cash. 888 says this is causing a ‘significant’ shift in its UK and Ireland online customer base, with fewer rollers and more lower-spending groups.
“Perhaps the biggest challenge for 888 is the cost-of-living crisis and squeezed consumers. The company makes about two thirds of its revenues in the UK and if interest rates continue to rise and inflation fails to ease, then customers will prioritise the roof over their head rather than a flutter.”
