Changes In UK Regulation Dent Profits But US Offers Hope
Betting firm suffers after regulation change, but America opportunity looms large.
UK Regulation Hits Bottom Line
Online betting giant 888 has seen its shares dip significantly in the wake of increased levels of regulation, which subsequently forced the company to revise and refine its marketing efforts.
UK revenues decreased by 18 per cent to £65.9m, and as a result the group’s revenue has also dipped, falling from 39 per cent to 32 per cent.
The organisation – which has seen UK revenues drop by nine per cent over the last six months – has claimed that although the results would appear to indicate a poor first half of 2018, such losses are actually part of a longer term restructuring that will eventually reap dividends.
However, despite what many will regard as an unsuccessful start to 2018, 888 can point to some positives.
Overall, revenue increased by one per cent to £209.7m, a success which has in part been attributed to a 30 per cent rise in regulated markets (not including the UK).
The company also has its eyes fixed firmly on the United States, which could become one of the world’s largest betting markets should the country’s laws around gambling be relaxed.
The US currently has certain regulations in place in regards to online sports betting, but the market is still in its infancy. It is likely that any long-term benefits will only be made on the back of significant investment in terms of website and product development.
888 has already launched its first sports betting site in the United States – 888sports, based in New Jersey – with many industry experts speculating that this could be a stepping stone to bigger and more lucrative online gambling markets.
The firm are not alone in hoping that the US market becomes fertile betting ground in the near future.
At the end of September, rival operation William Hill announced that a multi-year deal has been put in place with US gaming monolith IGT, which is set to tie down sports betting contracts with numerous state lotteries.
William Hill would seem to be slightly ahead of the game when it comes to infiltrating the US, given that the company has also recently signed a 25-year deal with American casino giant Eldorado.
Paddy Power Betfair is also flexing its sport betting muscles, with the organisation’s spokespeople hinting that the US market is firmly on its radar when it comes to future development.