After Market Review, 888 will Reduce Investment in Non-Core BrandsPublished August 17, 2022 by Brett C
Gaming operator 888 Holdings' Chief Executive Officer Itai Pazner announced a review of the company's international brand strategy. He cautioned that it would decrease investment in brands with lower market potential. This strategy kicks in in Q4 2022.
888 CEO Itai Pazner spoke out about the company's long-term growth potential in international markets following the company's acquisition of gaming titan William Hill. This acquisition gives 888 Holdings PLC control over three brands in multiple markets: Mr Green, William Hill and 888.
Depending on market conditions, this particular brand strategy involves laser-focused investments in brands with the highest growth potential.
Invest in Big Brands & Divest from Brands with Low Market Potential
Pazner stated that the company plans to invest in the top brands in each market and reduce investments in those less efficient brands with lower potential. He added,
This allows us more to invest in the best brands in each market, rather than all brands in every market.
He said that the fourth quarter of the year would see efforts to decrease focus on less successful brands.
The brand selections are being made right now and will be rationalised in Q4 of this year. Just to give you an example: 888sport UK is a brand that challenges the status quo but has a small market share. And if we take that and divide it between all the different markets, then we believe we have a better method to grow sports betting in those markets. We will focus the marketing investment on a roadmap into one brand in each market while keeping the other brands. I would call them tactical or secondary or withdraw them from the market.
In September (2021), 888 initially agreed to purchase the non-US business assets of William Hill. This was shortly after Caesars, a US operator, had purchased all of William Hill's business for around GBP2.90bn. The intention was to divest all its US assets.
Dealmakers Agree to Slash Purchase Price by GBP250M
The original purchase price was GBP2.2bn. But, Caesars and 888 agreed to substantially lower the purchase price of the assets by a quarter billion pounds. The cash portion of this agreement is now listed at GBP584.9m rather than GBP834.9m.
Pazner spoke after delivering 888’s H1 financial results. Revenue fell by 13.1%, somewhat due to planned efforts in the UK to increase safer gambling controls ahead of the results from the Gambling Act review by the UKGC.
888 Continues Global Expansion Efforts
The UK is 888's largest customer base, but the company plans to expand globally through product launches across the United States and the African continent. 888 launched in Kenya, Tanzania, Zambia, and Mozambique this year. The business is managed in the market under the brand 888bet, which focuses on the sports betting sector.
The company's future growth strategy will also include a relaunch in the Netherlands following October's exit from the Dutch market. According to the company, it expects the launch to occur in Q4 and not Q3.