Online gambling group 888 Holdings said it will review its U.S.-facing business to consumer operations and it announced a mutual agreement to terminate its Sports Illustrated licensing deal with Authentic Brands Group.
888’s review will consider all aspects and potential alternatives, include selling the group’s U.S. business to consumer operations or phase out its U.S.-facing operations.
“Since commencing my role as CEO, I have been focused on ensuring the Group is set up to deliver strong value creation in the coming years. In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability,” said Per Widerström, CEO of 888. “Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings. 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 U.S. market to generate positive returns within an accelerated timeframe is unlikely.”
The companies entered a deal in 2021 to entice SI fans into the online betting market. 888 is active in four U.S. states, including Michigan with SI Sportsbook and SI Casino, SI Sportsbook in Colorado and Virginia and New Jersey with 888Casino.
To terminate the SI deal, 888 must pay $25 million upfront, with another payment of $25 million due between 2027 and 2029. The operating cost savings of about $6 million to $7 million per year in 2024 and 2025 should partially offset this payment. In late March, Widerström will update shareholders regarding the company’s plans.
