888 has initiated a strategic review of its B2C US operations after determining that its current structure will “not optimise returns.”
The William Hill owner said it is considering “all potential alternatives” including a sale, noting that its gross profit margin in the US is “lower than the group level.”
It said “intense competition” and “significant direct costs of operating in the market” have made the US business’ future uncertain.
A controlled exit from the US for the group, which operates in four states, is also being considered alongside “other possible strategic transactions.”
For now, 888 has agreed to part ways with Authentic Brands Group, which had granted 888’s use of the Sports Illustrated brand for its SI Sportsbook and SI Casino in Michigan, and SI Sportsbook in Colorado and Virginia.
888 will pay US$25m as part of the termination agreement and will pay an extra $25m between 2027 and 2029.
“The termination of this agreement is expected to result in operating cost savings of approximately $6m-$7m per year in 2024 and 2025,” the group said.
888 CEO Per Widerström added: “In the US, the intensity of competition and requirement for scale means huge investment is required to reach profitability.
“Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings. A series of record-breaking months for SI Casino has underscored the strength of the SI brand.
“However, despite these successes, we have concluded that achieving sufficient scale in the US market to generate positive returns within an accelerated timeframe is unlikely.
“The strategic review of our US B2C operations will continue at pace and I look forward to updating shareholders on our plans for the wider Group in late March."
