Brick-and-mortar casinos across the United States might be closed, but 888 Holdings PLC is looking to capitalize on the COVID-19 crisis.
The London-based company said it expects to accelerate its mergers and acquisitions in the US online gaming industry, thanks to the disruption caused by the ongoing pandemic.
888 CEO Itai Pazner encouraged the company’s investors to think ahead during the fiscal year 2019 presentation. Pazner was appointed the Chief Executive Officer in January 2019 after working for more than 17 years with 888. Pazner held various executive positions within the online gambling giant, before finally achieving the position of CEO.
“I think that companies in situations less fortunate than ours, and even those in strong positions, will be launching new processes,” Pazner said. “These take some time, but I definitely feel there will be opportunities that come up in the next few weeks and months.”
888 is in the perfect position to outlive COVID-19
888 Holdings is in a better position than most during the current crisis, with nearly $100 million in cash on hand at the end of 2019.
With sports betting making up just 16% of the company’s revenues, it’s also been less affected by the sports shutdown than its rivals. At the same time, online casino and poker games, such as those 888 offers, have received a huge boost with the huge number of people forced to stay home.
Pazner indicated that inorganic growth is a key component of 888’s US growth strategy. This includes the acquisition of struggling online gaming companies and partnerships with land-based casinos and media outlets.
“We come into the US market with unique expertise and assets, and we have a lot to offer a US partner who wants to expand into online gambling,” said Pazner.
The big players in the US casino market will have an interest in an experienced digital gaming company like 888 as they look to build their own online presence post-COVID-19.
Steady US growth for 888
US revenue for 888 jumped 7% to $51.7 million during the fiscal year 2019. Moreover, the company registered a $3 million earnings before interest, taxes, depreciation, and amortization loss from the US, due to marketing and expansion costs attributed to sports betting.
888 Holdings also forecasts a loss of nearly $8 million for 2020, with business to consumer launches planned in three of four states. That will likely include launching the World Series of Poker website in Pennsylvania to take advantage of the current boom in online poker. The 888 online gaming platform powers the WSOP website.
Indeed, the company aims to secure a prominent position in the US online poker market, thanks to the prominence of the World Series of Poker brand. The company also plans to launch its new Poker 8 tech, which has increased online poker revenues in a variety of jurisdictions.
Big aspirations for online gaming in the US
In the end, the London-based company expects half of the online gaming revenue in the US to come from poker and casino games. In that regard, 888 is in a very good position to secure a significant market share.
When it comes to sportsbooks, 888 just launched its innovative sportsbook platform in Sweden. Moreover, 888 plans to bring that proprietary piece of technology to the US market with 888 Sport. However, that’s not likely to happen until late in 2020. The company acquired the Spectate platform from BetBright last year.
“During 2020, we plan to further invest not only in our team, but also in marketing, and product development. We want to continue our progress in the US market,” Pazner added.
Pazner’s strategy to grow 888 Holdings in the US market is a good example of thinking outside the box. While many companies are putting their expansion on hold during this time, 888 is bucking the trend.