Easy to see coming
Gambling and sports betting company 888 Holdings has announced that it has agreed to sell its US business-to-consumer (B2C) assets to Hard Rock Digital. The company expects to be out of the US B2C market completely by the end of the year.
888 was ready to be done with the US and just had to figure out the path to take
The move comes as no surprise, as earlier in March, 888 said it was conducting a “strategic review” of its US business and would consider “all potential alternatives that can deliver value for the business.” All potential options pointed to some sort of exit from the US B2C market, whether it was selling the business like it announced on Thursday, simply exiting the market without a sale, or some other option. Either way, it was apparent that 888 was ready to be done with the US and just had to figure out the path to take.
In fact, the impact of the sale and exit from the US B2C market was already factored into 888’s financial projections. The company expects to save ￡25m ($32m) in adjusted EBITDA annually starting in 2025. The sale price was not disclosed.
Was already out of US sports betting
888 has been one of the biggest gaming companies in the world for years, but has never really had much brand recognition in the US, at least not for a couple decades. It has an online casino in New Jersey, but that’s about it.
marketing and customer acquisition costs were simply too high
The company’s real efforts in the States were in the lucrative, growing sports betting industry. In a market dominated by DraftKings and FanDuel, along with names like BetMGM and Caesars, 888 couldn’t find a foothold. It was potentially possible to carve out a niche with a tiny slice of the market, but marketing and customer acquisition costs were simply too high.
When 888 announced its strategic review of US operations earlier this month, it also announced that it was ending its sports betting partnership with Authentic Brands Group, the owner of Sports Illustrated. The two had teamed up to create SI Sportsbook and SI Casino, but again, were never able to compete. 888 agreed to pay $50m to Authentic Brands Group – $25m now and $25m between 2027 and 2029 – to break the alliance.
Online poker still intact
888’s announcement leads to the question of what will become of its behind-the-scenes presence in the US online poker market; its software powers WSOP.com in Nevada, New Jersey, Michigan, and Pennsylvania. As that is a business-to-business (B2B) relationship, one would assume that nothing will change there.
There was no mention of poker in 888’s press release, only that it was selling “selected assets” to Hard Rock. But again, since licensing its poker software to WSOP.com is B2B, it seems like that should stay as is.
888 also provided the three racino-connected online poker rooms in Delware their software since 2013, allowing them to share player liquidity with WSOP.com in other states, despite not sharing the branding. This is no longer the case, as the Delaware Lottery switched its iGaming provider from 888 to Rush Street Interactive last year. The three Delaware online poker rooms shut down in late December and now wait for Phil Galfond’s Run It Once platform – which was purchased by Rush Street in 2022 – to spin them back up.