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888 Holdings shares plummet as online gambling is hit by slowdown

Shares of 888 Holdings plunge as new security checks and re-opening of betting shops hit online gambling

  • The Gibraltar-based company’s pre-tax profits fell two-thirds to £14.4m
  • Shares of 888 Holdings fell 14.3% to 137.1p in early morning trading
  • The acquisition of William Hill’s non-US assets was completed in early July

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Shares of 888 Holdings plunged Friday after the betting group revealed a massive drop in profits.

The Gibraltar-based company’s pre-tax profits fell two-thirds to £14.4 million in the first half of 2022, as the easing of Covid restrictions and tighter security measures led to a decline in the number of Britons gambling online.

Profits were also affected by costs related to the sale of the bingo division and the acquisition of William Hill’s non-US operations, both of which were completed in early July.

Delay: 888 Holdings saw its pre-tax profits fall by two-thirds as Covid restrictions easing and tightening security measures fell, reducing the number of Britons gambling online

Delay: 888 Holdings saw its pre-tax profits fall by two-thirds as Covid restrictions easing and tightening security measures fell, reducing the number of Britons gambling online

888 Holdings Shares plunged 14.3 percent to 137.1 p in the late morning, meaning their value has fallen by just under two-thirds over the past 12 months.

The company revealed that total revenues fell 13 percent to £332.1 million, with the biggest drop in the UK, where they fell by a quarter after the group introduced lower affordability thresholds and limits on slots betting.

Trading in Europe was further impacted by the closure of its operations in the Netherlands last year, ahead of a revision of the gambling license that legalized internet-based betting in the country.

In comparison, US revenues grew 29 percent thanks to the company’s Pennsylvania launch and its partnership with the World Series of Poker tournament.

However, 888 sales in the Americas were flat, thanks to promotional investments to support the launch in Canada and the beginning of the SI Sportsbook’s relocation in the states of Virginia and Colorado.

Sports betting has become extremely popular in the US since the country’s Supreme Court overturned a law that effectively banned the activity in all but a few states.

British bookmakers have received a significant financial boost as states gradually liberalized their gambling laws, but they have also become targets for potential takeovers.

Caesars bought William Hill in 2021, intending to sell the company’s European assets and launch a bidding contest about a month after the transaction closed.

Private equity giants CVC Capital Partners and Apollo Global Management entered the race, but the company decided to strike a deal with 888 instead.

As part of the deal, 888 took control of all 1,400 William Hill betting shops in the UK and the digital gaming brands Mr Green and Redbet of US hotel and casino operator Caesars Entertainment for £1.95 billion.

888 CEO Itai Pazner said: ‘The combination with William Hill, which we completed shortly after the end of the period, has transformed the Group and laid a very strong foundation to support our ambitious growth plans.’

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