888 to Sell All US B2C Operations to Hard Rock Digital
LISTEN TO THIS ARTICLE:888 has finished its strategic review of its US B2C operations and decided to sell its US online gambling assets to Hard Rock Digital and leave the US market.
The sale is dependent upon regulatory approvals and various other conditions. It is thought that finalization will take place in stages and be concluded in the final quarter of this year. In order to facilitate its exit from the US market, 888 has begun a controlled exit from its existing US B2C operations and it plans to have fully exited by the end of 2024.
Exit to Benefit EBITDA
888 said that it believes leaving the US will result in a recurring annualized benefit to EBITDA of roughly £25 million, which will be apparent from 2025 onwards. The company is then planning to reinvest £10 million into growth and value creation programs.
The operator factored the financial impact of the sale and market exit into its financial targets, which it published earlier this week.
888 is expecting net one-off cash costs of roughly £40 million due to the exit. These costs include an already announced brand license termination fee with payments to take place from 2024 until 2029.
Separating from Sports Illustrated
At present, 888 is active in four states, Colorado, Michigan, New Jersey and Virginia. However, only in one of these states, New Jersey, is the actual 888 brand active in the form of 888casino.
The other operations are a collaboration with Authentic Brands Group and its Sports Illustrated brand. These include the SI Sportsbook in Colorado and Virginia, and the SI Sportsbook and the SI Casino in Michigan.
During the strategic review, 888 agreed to end its partnership with Authentic Brands Group and as per the agreement, the operator will pay $25 million in cash and an additional $25 million between 2027 and 2029.
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