British sportsbook and gaming company, 888 Holdings, has announced the termination of its partnership with Authentic Brands Group, through which it had licensed the Sports Illustrated (SI) brand for its casino and sportsbook efforts.
At the same time, the leading betting and gaming company with globally recognized brands like 888, William Hill, and Mr Green broke the news that it would be assessing options to either exit or sell its direct-to-consumer operations based in the US.
The decision comes in the context of the low margins and strong competition recorded by the business-to-consumer division, and at a time when FanDuel and DraftKings continue to cumulatively dominate more than 60% of the market.
The London-listed company could not confirm a timetable for when the review would be completed. At the same time, they could not give assurances regarding what the outcome of the review might be, other than that the US business-to-business operations would remain unaltered.
The Current Structure Will Not Optimize Returns
888 explained that the “current structure” would not be able to optimize returns, thus deciding to initiate the strategic review.
Company chief executive officer Per Widerström further spoke about his focus on making sure that the group “is set up to deliver strong value creation in the coming years.”
He added that, in the US, the intense competition and ongoing need for scale equals a need for massive investment to be profitable.
Widerström also spoke about their partnership with Authentic which, as he described, “has consistently driven strong demand for the SI brand across both consumer experiences and product offerings.”
The CEO mentioned several “record-breaking months for SI Casino” which underscored the strength of the Sports Illustrated brand.
Nonetheless, despite the recorded successes, the company deems it “unlikely” to be able to achieve the necessary scale in the US market that would lead to “positive returns within an accelerated time frame”.
According to the terms of the As termination agreement, 888 will pay $25 million in cash. An additional $25 million will be paid between 2027 and 2029.
SI-branded business operations will not be interrupted during the strategic review. Shareholders will be updated on their plans in late March. In February, 888 announced the launch of a Control Centre safer gambling tool in Ontario.
Melanie Porter
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