888 has announced that it will be selling selected U.S. B2C assets to Hard Rock Digital, part of its sweeping revamp of its North American operations.
The company said in a release that the sale marks the conclusion of its strategic review of its U.S. B2C operations and the next step in a “controlled exit” from the U.S. market.
No details of which assets Hard Rock Digital will purchase or of the specific financials of the deal have been disclosed but the sale is expected to be completed in Q4 2024.
The combined net impact of the sale and exit of U.S. B2C were already incorporated into the company’s financial targets outlined on March 26. 888 expects to incur net one-off cash costs of approximately $50.5 million in relation to the exit of the US between now and 2029. It also anticipates “a recurring annualized benefit to adjusted EBITDA of approximately $31.6 million from 2025 onwards” of which approximately £12.6 million will be reinvested into growth and value creation initiatives.
Subject to regulatory approvals and process, 888 is expected to fully cease operations in the U.S. by the end of 2024. It is currently active in Colorado, Michigan, New Jersey and Virginia but it only uses the 888 brand in New Jersey with 888casino.
888’s transformation continues
888 began the review of its U.S. B2C operations at the start of March, ending the partnership with Authentic Brands Group that had granted it exclusive use of the Sports Illustrated brand for online betting and gaming. Under that agreement, 888 was live in three states with the SI Sportsbook and Casino brand.
“In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability,” said 888 CEO Per Widerström at that time. “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 time frame is unlikely.”
This week, 888 announced a total rebrand. It will continue under the name Evoke Plc, a change which is part of a sprawling Value Creation Plan (VCP) published alongside the operator’s full-year accounts for 2023 this week.
Overall, the group reported corporate revenue of $2.16 billion, up 38% year-over-year, but revenue fell 7.5% on a pro forma basis. The company’s international revenue crept up by 1.8%. CFO Sean Wilkins said at the company’s earnings call on March 26 that “we are under no illusions that this financial performance has been disappointing.”
