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888 Holdings Very Likely to Leave German Gambling Market
- March 21, 2018 By Oliver Young -
It is very likely for online gambling giant 888 Holdings to leave the German gambling market very soon. Namely, the operator has published its earnings for 2017, which reveal that the company’s profits considerably decreased thanks to the latest regulatory changes in Germany.
Reports have shown that even though the revenue of 888 Holdings has jumped for 4% in 2017, the pre-tax profit noted a sharp fall from $59.2 million in 2016 to $18.8 million in 2017. A huge impact on this has had the charges from the German VAT, which amounts to incredible $45.3 million; also, the massive $5.5 million fine issued by the UK Gambling Commission shouldn’t be overlooked either.
888 Holdings Disappointed with Court Ruling; Considers Leaving the Market
In the 2017 earnings report, 888 Holdings pointed out that in some of its operating territories there was regulatory uncertainty, with Germany leading the way. All of this comes after a court ruling banned online gambling in some parts of the country, Baden Württemberg included; this is a territory in which 888 was already prohibited from operating. Moreover, some of the payment processors started refusing to provide some services, such as holding deposits, for gambling operators serving German consumers.
Commenting on the court ruling, 888 Holdings expressed disappointment and stated that the company may appeal it. More likely, however, the company may leave the German gambling market altogether. According to the operator’s statements, the board of directors was assessing the breadth and status of its offerings in the country. Experts saw this as an indication that 888 could soon withdraw from Germany, just like many other operators already did.
In comparison, 888 Holdings has noted improved numbers in Italy and Spain, countries that are considered the two fastest growing regulated markets. According to the report, Spain is now representing 12% of the company’s revenue, while the year-on-year revenue for both countries have jumped for 34%.
Even with Setbacks 888 Holdings Noted Strong Progress and Revenues
All in all, 888 Holdings, best known for its brands 888Casino and 888Poker, has noted a strong year. The company’s CEO Itai Frieberger stated that 888 has achieved “record revenues of $541.8 million and a 12% increase in adjusted EBITDA” thanks to expansion in both casino and sports regulated markets. Moreover, he highlighted that the company has “a number of significant growth opportunities ahead” and that the board expects for 2018 to report even better results than 2017.
Aside from the 4% y-o-y growth in revenues, the revenue from B2C operations jumped for 6% as well; in 2016 this figure was $460.2 million, while in 2017 it reached higher $486.6 million. The group’s sports operations grew significantly i.e. for 45% to $75.5 million from $51.9 million in 2016. A 4% jump was recorded in casino revenues too; these reached $293.9 million in 2017 from $282.1 million in 2016. Adjusted EBITDA improved for 12%, reaching impressive $100.7 million in 2017 in comparison to $90.2 million in 2016.