Struggling to pare down its debt, 888 Holdings announced last week that it withdrawing its sports betting product out of some states. The company has decided to focus on states that have online casino gaming in addition to sports betting, going for an “unsexy sweet spot” in the US gambling market.
888 acquired Caesars Entertainment’s non-US business for about £2.2 billion earlier this year and took on a ton of debt to do so. The company currently has around £1.6 billion in debt.
The US sports betting market is dominated by just a handful of companies. FanDuel lords over all with nearly half the country’s market share, followed by DraftKings, BetMGM, and Caesars/William Hill. 888’s online sportsbook, SI Sportsbook, is barely a blip on the radar. It costs a lot of money to try to compete with the big boys, so 888 decided it wasn’t worth trying anymore in states where it didn’t also have the opportunity to capture gambling spend in other verticals.
While getting out of the sports betting-only states should save 888 money on marketing, customer acquisition costs, and the like, it will also greatly decrease revenue potential. While more than 30 states have legalized sports betting, just a handful have online casino gaming and/or poker.
888 CEO Itai Pazner pointed to worldwide inflation as a significant problem for his company, as opposed to the debt it took on for the William Hill acquisition. He said 888 has “very solid plans in order to deleverage and to create higher margins for our business.”
888 poker is strong
Though 888 is essentially an afterthought in the United States sports betting market, it is one of the major players when it comes to online poker.
WSOP.com in New Jersey and Nevada and the three racino-based online poker rooms in Delaware use 888’s poker platform. They are part of the Multi-State Internet Gaming Agreement (MSIGA), allowing them to share player pools in what is currently the only interstate online poker network in the US. Michigan, which also has a WSOP-branded online poker room, joined MSIGA in May, but has yet to actually allow its online poker rooms to link with sites in the other states.
Players in New Jersey and Nevada competed at the same tables in the WSOP online bracelet events. Though Delaware normally shares player liquidity with the other two states, players there could not participate in the WSOP online events because they do not actually play on WSOP.com.
Michigan had its own WSOP online bracelet events, as did Pennsylvania, which has its version of WSOP.com and has yet to join MSIGA.