888 reports “sweeping changes” amid UK woes

Online gambling group 888 Holdings has reported record earnings throughout 2018 in its full year report, despite trying to navigate a tricky regulatory landscape across its core UK market.

The group reported a two per cent decrease in its overall Group Revenue from $541.8m (£415.3m) in 2017 to $529.9m (£406.1m). The operator put this down to the increased competition in the market throughout 2018, while also facing regulatory scrutiny – both of which played a significant role in the fall in revenues.

The UK government has recently introduced stricter regulations on gambling operators in a move to bid to crack down on both underage and problem gambling.

The report detailed: “Regulation continues to be a key force in shaping the future direction of our industry and the Group continues to welcome and support the development of regulatory frameworks globally that provide better protection for customers and greater clarity for online gambling operators.  

“In some cases, such as in the UK, Italy, Denmark and Romania, recent and forthcoming changes to regulation and taxation could present potential headwinds for profitability and growth.”

The operator has said that it had rolled out “sweeping changes” across its business model to comply with new regulations, which resulted in its UK revenue dropping by 16 per cent in 2018.

The CEO of 888 Holdings, Itai Pazner, commented on the results: “In my first report as CEO I am delighted to update 888’s stakeholders on the significant strategic progress made by the Group during 2018 and since the start of 2019.

“Despite headwinds in some areas of the business, the financial performance in 2018 was resilient and we achieved a record EBITDA outcome for the year. The Group achieved continued growth across several regulated markets, primarily in Continental Europe, underpinned by good momentum in Casino and Sport.

“The Group continues to base its success on its unique technology-edge, fantastic team and diversification across products and markets. Underpinned by the strength of 888’s technology and the significant strategic progress made by the Group over recent months, the Board continues to see a number of significant growth opportunities for 888 in both new and existing markets. We look forward to another exciting year of progress in 2019.”

The online gaming entertainment and solutions provider explained that its new US venture has warranted further investment, and that the group remains “well positioned” in the evolving market.

Non-Executive Chairman Brian Mattingley told investors: “Changes and developments to regulation will continue to play a major role in dictating the future dynamics and size of the global online gambling industry.

“Despite recent uncertainty arising from the US Department of Justice’s recently revised opinion to the Wire Act of 1961, the board believes that 888 remains well positioned and we will continue to invest to develop 888’s presence in the evolving US market.

“Whilst these investments will have an impact on group profitability in the coming year, the longer term growth potential for 888 in the US market, which retains the potential to become the largest in the world, remains significant.”

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