888 Holdings posts 4% revenue increase for 2017
London-listed 888 Holdings has announced a 4% year-on-year rise in revenues to $541.8m for 2017.
The rise in revenues was largely inspired by 888 Holding’s sports betting division. Revenues for sports betting rose by a whopping 45% to $75.5m in the year leading up to 31 December 2017. Revenues at the operator’s casino division also rose, but by the much smaller margin of 4%.
However, both the operator’s poker and bingo arms experienced a decrease in revenue. Poker revenues fell by 8% to $77.9m, while bingo revenues fell 6% to $39.3m. That brought total B2C revenue in the year of 2017 to $486.6m, which is a 6% increase on the year. B2B revenue fell 9% to $55.2m.
Key growth has occurred in two of the group’s fastest growing markets, Italy and Spain. Revenues were up by 34% in each market as both countries continue to prove fruitful.
However, despite the increased revenues, pre-tax profits look set to fall from the $59.2m made in 2016. The fall in profits are largely a result of a potential VAT bill in Germany that would amount to around $54.3m and a huge £7.8m fine by the UK Gambling Commission for social responsibility failures.
The German tax bill relates to market activity pre-2015 and if issued, would result in pre-tax profit of around $18m, which would be a 65% fall from the year prior.
Speaking about the results, Group CEO, Itai Frieberger, said:
888 has delivered another year of progress achieving record revenues of US$541.8 million and a 12 per cent increase in Adjusted EBITDA. The Group’s growth was driven by further expansion in Casino, Sport and across regulated markets. This very robust outcome was achieved despite the Group’s withdrawal from certain markets during the year and demonstrates 888’s resilience and agility that is underpinned by first-class technology and an outstanding team.– Itai Frieberger, Group CEO
Company considers exit from the German market
Increased regulatory scrutiny is a common theme in the UK market, but the penalty charges in Germany, together with a court ruling that would prohibit online casino and poker in certain parts of Germany, has left the group considering their status in the country. A statement by the group read:
Following a recent ruling by the Federal Administrative Court of Germany, the Board of 888, together with the Group’s legal counsel, is assessing the status and breadth of its offerings in the German market.– Statement, 888 Holdings
888 Holdings have also claimed that several payment processors are not providing certain services for gambling companies operating in Germany. As a result, the group have stated they may petition the Federal Constitutional Court in Germany among other potential actions.