Apparat Gaming, the developer of slots with a German accent, has put...
The trouble with walking to the top of a hill is having to walk all the way down again, once the elation of conquest has passed.
FTSE 250 888 Holdings is hoping for a similar jolt of upward positive energy, without the downside, if they complete their increasingly complicated acquisition of William Hill’s non-US assets — now lowered to £1.95 billion (US$2.54bn/€2.34bn) from an initial £2.2 billion (US$2.87bn/€2.64bn).
Meantime, following their record-breaking £9.4 million fine (US$12.26m/€11.29m) imposed by the UK’s regulatory Gambling Commission (UKGC) earlier this year for extensive social responsibility and money laundering failings, 888’s miserable Q1 continues.
Not only is William Hill’s licence to operate in Great Britain currently under review by the UKGC, with a swingeing £15 million sanction (US$19.57m/€18m) in the offing, a rap reflected in the fall of its aforementioned selling price, but the 888 Group has also suffered a big decrease in earnings across both its B2B and B2C divisions during the quarter.
Corporate revenue fell 18 per cent, year-on-year, to US$224 million (£171.69m/€206.37m); mirrored by consumer revenue, which dropped to US$215 million (£164.8m/€198m) in Q1, the gaming giant has reported in a Trading Update.
A deeper investigation of B2C performance reveals a 42 per cent plunge in betting revenue, a negative the company attributes to a sharp fall in stakes, increased promotion costs and the (temporary) closure of its Dutch operations to comply with the terms of Holland’s new regulatory regime.
Lipstick on a Pig
Putting a diversionary gloss on the disappointing results, 888 seized on so-called “sequential performance”—comparing Q1/2022 to Q4/2021—to note that revenue had in fact risen by one per cent by this measure.
“[We’ve] revised the transaction terms for William Hill and completed an equity placing to part-fund the deal, we are on track to complete in June and continue to execute our plan to build a global online betting and gaming leader,” asserted CEO Itai Pazner.
“The start of 2022 has been another busy period of progress for 888. We have launched in Michigan and Ontario, with Virginia planned to follow in May,” he continued.
“I am pleased with the group’s progress, and we are looking forward to returning to year-over-year revenue growth in the second half of the year, as we benefit from further launches in additional US states, together with our expectation of re-launching in the Netherlands and ramping up our recent launch in Ontario.”
Perhaps the acquisition of William Hill International does indeed give 888 a golden opportunity to reset growth.
But Pazner, the grand CEO, now has to march his troops up to the top of the hill.
And march them safely down again to fight yet more looming battles.
For 888 Holdings it would appear that the successful completion of this campaign could not be more critical.