888 Holdings reported Tuesday a fall in revenue for the third quarter of the year, attributed to enhanced UK gambling laws and the closure of its Dutch division. In the three-month period ended September 30, the bookmaker saw its revenue fall 7.2% to GBP 449 million ($507 million) from GBP 484 million ($547 million) a year prior.
Retail revenue reached GBP 124 million ($140 million), stable in a year-over-year comparison despite the GBP 4 million ($4.5 million) impact from three days of temporary closures, together with sporting fixture cancellations during the period after the Queen’s passing.
Total online revenue was GBP 325 million ($367 million), down 10% compared to last year, mainly reflecting the impact of UK player safety measures and the closure of the Netherlands operations. Total UK online revenue of GBP 171 million ($193 million) was down 13%, driven by a reduction in average spend per player, which was down 14% year-over-year following the introduction of more stringent measures through Q3 and Q4 2021.
Despite these drops, the group says it has made “strong early progress with realizing synergies” after the acquisition of the international (non-US) business of William Hill in July; and in creating a more efficient operating cost base during the period and helping to deliver an improved Adjusted EBITDA margin in Q3 2022 versus H1 2022.
888 revenue was down 5%, while William Hill -which was acquired from Caesars- revenue saw a 14% drop in UK Online, down 12% in International Online and flat in retail. So far this year, the company’s revenue totaled GBP 1.39 billion ($1.5 billion), a figure that is also down 3.1% from GBP 1.44 billion ($1.6 billion).
Despite the changing macroeconomic environment and ongoing pressure on UK revenues from long-term focused enhanced safer gambling measures, the Board stated it expects revenues in Q4 2022 to grow over Q3, and resemble Q4 2021 levels.
The group also stated it has taken actions to accelerate synergies and drive “a more efficient operating cost base,” and expects an improved Adjusted EBITDA margin in H2 2022 to meet the current market expectations for full-year 2022 Adjusted EBITDA.
In a statement released along with the report, Chief Executive Officer Itai Pazner stated Q3 results have fallen in line with the trends dragged on during the recent quarters, “with relatively resilient trading across our main international markets and in our retail estate and continued pressure on our UK online revenues in light of the ongoing impact of the enhanced players’ safety measures.”
“We are changing the mix of our business to a lower spending, more recreational player base that gives us confidence in the long-term potential for our UK business,” he added.
Back in October 2021, regulatory changes from the Dutch Gambling Authority came into effect. As a result, 888 “took the decision to cease the provision of services in the Netherlands,” which is still having an impact on the company’s figures.
And earlier this year, in March, the UK Gambling Commission issued a GBP 9.4 million fine for 888 UK as it found “social responsibility and money laundering failings.” One of the responsibility issues was 888 giving a customer on a GBP 1,400 per month salary a monthly deposit cap of GBP 1,300, according to the commission.
Gambling’s only fun if you know you can afford it. Don’t stake anything you’d really regret losing! #SGWeek22 pic.twitter.com/OxtDzuah2m
— 888casino (@888casino) October 17, 2022 In April this year, the regulator published a set of new requirements to ensure companies do more to identify customers at risk of harm – Social Responsibility Code Provision 3.4.3 – and guidance to assist operators to comply with the requisites followed in June.
Subject to consultation, the Commission’s provisional intention is to publish the guidance on the requirements in December 2022, with it taking effect approximately 2 months after publication. “In the circumstances, we consider this will allow the industry a reasonable period to consider the guidance before it takes effect,” the Gambling Commission noted.
See 888’s full financial results for Q3 here.