Three big questions after 888’s Q1 results: Quality, acquisitions and the future

With great change, comes great responsibility… can 888 Holdings pull it off? 

depth 888 q1

888 Holdings released its Q1 results for 2024 last week, although it only seemed to raise more questions than it actually answered.  

In its Q1 report, 888 revealed that sportsbook stakes were down 5% overall, from £1.43bn ($1.78bn) to £1.35bn and its betting revenue fell 10% to £159m.  

Despite the Cheltenham Festival, online sports betting stakes in the UK and Ireland dropped by 9% to £630.6m and betting revenue dropped 8% to £62.5m.  

Retail operations didn’t fare much better either. Sportsbook stakes fell 4% to £393.5m and betting revenue dipped 6% to £76m.  

Surely the international businesses did better though, right? After all, 888 runs the iconic Sports Illustrated sportsbook in North America, one of the first sportsbooks to launch in several of the newly legalised jurisdictions. Well… 888 used to run Sports Illustrated. 

In Q1 2024, international sportsbook stakes were actually up 2% to £327.2m, but revenue was down 22% to £20.5m. Not only that, but 888 agreed to terminate its Sports Illustrated deal and put it up for sale as part of a strategic review of its US B2C operations. 

888 was an international sports betting behemoth, so what happened?

Is 888’s sports betting product good enough? 

It can be difficult as a single entity to point at brands and say one is good enough, while another is not. Being ‘good enough’ is a culmination of different factors, and in sports betting this is often determined by promotions, breadth of markets and offering value for the customer.  

Customer acquisition and retention: It’s so simple on paper but a herculean task, too. If it were simple, there wouldn’t be teams specifically dedicated to each of the two divisions. However, one of the best ways to appeal to both sides is through those previously mentioned promotions.  

At the moment, while 888sport has six sports betting promotions on offer, Paddy Power has 10 and Ladbrokes has 19! Interestingly, quite a few of these operators, except for 888sport, also had free-to-play offers, such as daily tournaments that offered free bets or cash prizes. 

How do we reflect on the William Hill acquisition if retail revenues are also down? 

To say William Hill is a household name is an understatement. The operator was founded in 1934 by Mr William Hill himself, and despite it passing through several hands such as Nomura, Caesars Entertainment and most recently 888, it has remained a staple on the British high street.  

There are approximately 1,400 William Hill betting shops across the UK employing around 8,000 people. 

But let’s take a look at how William Hill is faring on the high street. Well, retail sportsbook stakes fell 4% to £393.5m, while betting and gaming revenue dropped 6% to £76m and 7% to £54.3m respectively.  

This is a little more nuanced than an online gambling brand, because while online gaming is objectively growing, retail sports betting is slowing across the board. This has been attributed to several different things, from tighter regulatory restrictions to the ‘death of the high street’ overall. 

It’s not just William Hill that has reported drops in retail figures, either. Entain, owner of Ladbrokes and Coral, reported a 2% drop in retail during FY2023 and a 6% drop in UK retail NGR in its Q1 2024.  

However, this is where we introduce a wildcard.  

Flutter, owner of Paddy Power, actually reported that its FY2023 UK and Ireland retail revenue increased by 11% to £300m. Retail sportsbook revenue grew by 12.4% during this time and its retail iGaming revenue grew by 8.1%, due to ‘product enhancements introduced during 2022 and 2023’ that were developed specifically for retail stores.  

Paddy Power is well aware that its UKI online markets are dominating retail too

In the FY2023 report, the total from UKI retail operations was £374m, while online brought in £2.67bn. It would make sense for Flutter to focus on the online demographics and leave retail out to die just as much as every other operator is, yet it’s not. And that’s interesting.  

Is 888 really going to ‘evoke’ change and switch things up, or is it just skin deep? 

A company cannot simply will itself to be successful and have it come true – if this was the case, we’d all be doing it. It’s been widely said that the definition of insanity is doing the same thing over and over again, but expecting different results.  

At the moment, 888 is not doing… optimally. Its record share price was £4.48 in September 2021, although this fell to £0.51 in March 2023. Thankfully, it’s recovered slightly, up to £0.83 at the time of writing. This isn’t going to be the kind of performance shareholders wan, however. 

888 is going to have to make several drastic choices if it wants to bounce back, and it’s starting off by perhaps making the most drastic change of all – a complete rebranding.  

The operator announced it would change its name to ‘evoke’ as a way to position itself back into success. Regardless of what your personal opinions are on the name, it’s definitely a brave move. 888 as a brand is iconic. 

888, or Evoke, will have to do more than this, though. It seems like its brands are trailing behind in every avenue; online, retail and North America. 

While FanDuel and DraftKings are desperately trying to out-innovate the other, this has led to an incredible library of products from both operators as they try to win the loyalty of customers. On the UK high street, Paddy Power is introducing initiatives to get online-only players down into their local stores, which are in turn helping to protect staff jobs and the community as a whole.  

William Hill is a fantastic brand with great credibility, but it seems like 888 doesn’t quite yet know what to do with it. While WH has great promotions, it doesn’t seem like many of these managed to make their way over to 888sport. 

If the FY2024 reports want to fare any better than this year, there needs to be a greater focus on innovation at 888. An operator can’t keep doing business one way without change just because it’s worked in the past.

Reputation can only take a company so far 

And when this reputation has been marred in the past few years by a £3m fine, a SEK 31.5m ($3.62m) fine, £9.4m fine, and the record-breaking £19.2m fine for almost £40m in penalties related to anti-money laundering and counter financing terrorism failures… maybe a complete rebrand is necessary after all. 

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