Hard Rock Digital Begins Purchase of 888 Holdings US Gaming Assets

Article by : Erik Gibbs Mar 29, 2024

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888 has unveiled plans to divest selected US B2C assets to Hard Rock Digital as part of its extensive overhaul of North American operations. This move follows the conclusion of a strategic review and signals a deliberate withdrawal from the US market.

While the specifics of the deal remain undisclosed, it is slated for completion in Q4 2024. The financial targets outlined earlier incorporate the combined impact of the sale and US exit.

888 foresees one-off cash costs nearing $50.5 million by 2029 alongside an annualized adjusted EBITDA boost of approximately $31.6 million from 2025 onwards, with a portion allocated to growth initiatives.

With regulatory green lights pending, 888 aims to cease US operations entirely by year-end 2024. Presently active in several states, including Colorado, Michigan, New Jersey and Virginia, it also exclusively employs the 888 brand in New Jersey, home to the 888casino.

At the dawn of March, 888 initiated a comprehensive review of its US B2C operations, signaling the termination of its partnership with the Authentic Brands Group.

This alliance had granted 888 exclusive rights to utilize the Sports Illustrated brand for online betting and gaming, facilitating its presence in three states with the SI Sportsbook and Casino brand.

CEO Per Widerström emphasized the formidable competition and the imperative for scale in the American market, noting the substantial investment required for profitability.

Despite SI Casino’s commendable performance, the feasibility of attaining sufficient scale within a condensed timeframe remained uncertain.

This week, 888 unveiled a sweeping rebranding initiative, culminating in its transformation into Evoke Plc. Embarking on corporate rebranding entails inherent risks, as demonstrated by past missteps.

Standard Life Aberdeen faced ridicule after rebranding to Abrdn in 2021, while Royal Mail’s attempt to adopt the name Consignia was ultimately reverted.

Despite these cautionary tales, 888 forges ahead with its rebranding endeavor. Alongside the proposed name change, subject to shareholder approval, 888 unveiled ambitious financial objectives.

These include achieving annual revenue growth ranging from 5% to 9% over the medium term and reducing leverage by 2026.

This strategic overhaul is also a pivotal component of the operator’s expansive Value Creation Plan (VCP), unveiled alongside its comprehensive 2023 full-year accounts.

While reporting a robust corporate revenue surge of $2.16 billion, marking a remarkable 38% year-over-year increase, the company’s pro forma revenue witnessed a modest decline of 7.5%.

International revenue experienced a marginal uptick of 1.8%. CFO Sean Wilkins candidly acknowledged the company’s financial performance as “disappointing” during the earnings call on March 26.