Gambling giant 888 admits defeat in war for US gamblers
888, the gambling giant which owns William Hill and a host of other major brands, looks set to exit the US market despite the country’s sports-betting boom – giving up its operation of US site SI Sportsbook.
Gambling analysts have pegged the US as a new gold rush for gambling giants as individual states gradually legalise sports betting and the major sports leagues have jumped in bed with players including DraftKings and FanDuel.
However 888 is to conduct a ‘strategic review’ of its US business and also bring to an end its partnership with Authentic Brands Group, which had seen it operate SI Sportsbook and Casino in Michigan, SI Sportsbook in Colorado and Virginia and SI Casino in New Jersey.
888 will pay ABG – which owns the Sports illustrated ‘SI’ brand – $25m to break the agreement and pay a further $25m between 2027 and 2029.
The firm’s statement to markets this morning read “the gross profit margin in the US is lower than the group level, reflecting significant direct costs of operating in the market including duties, market access fees, and licence fees, in addition to intense competition from well-capitalised incumbent participants.”
Boss Per Widerström admitted defeat in the war for US eyeballs.
“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,” he said this morning.
“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 firm’s strategic review of its US business to consumer operations will “consider all potential alternatives that can deliver value for the business” including a sale or the controlled exit from the market.
The group will remain active in the business to business market in the US.