888 unveils surging profit after being slapped with fine

Online betting and gaming group 888 Holdings' pre-tax profits tripled in 2021, but headwinds are on the horizon with the potential for further regulatory crackdowns.

Last week 888 was fined £9.4million for alleged 'social responsibility and money laundering failings' by the UK Gambling Commission.

The UKGC, said, in one instance, 888 had not contacted a customer who lost £37,000 in a six-week period during the Covid-19 pandemic.

The London-listed firm revealed on Wednesday that profit before tax surged to $81.3million last year, while revenue from its core markets in the UK, Spain and Italy, increased by 18 per cent over the period. UK sales surged by 17 per cent.

Across Britain and elsewhere in Europe, the company's online offerings remained popular amid sporadic lockdowns, store closures and ongoing Covid restrictions in 2021.

888 said its average daily revenue through January to February rose in mid-single digit percentage compared with the final quarter of 2021.

Revenue for the first two months of this year, however, fell in double-digit percentage relative to the same period a year earlier due to regulatory and compliance headwinds.

Germany, which 888 considers a 'growth market' implemented a new gaming taxes and duties regime in July, while the company had to implement safer gambling measures, particularly in Britain, to reduce the risk of potential harm to customers.

In December, the group announced the sale of its bingo business to a unit of UK-based Broadway Gaming Group for $50million, in a bid to focus on its core offerings and the US market.

The group's £2.2billion acquisition of the non-US assets of William Hill is still due to complete in the second quarter. Due to the capital requirements for the deal, no dividend was declared today.

Gambling companies around the world have profited from record levels of interest in online betting, amid physical store closures and a desire for entertainment during lockdowns.       

A UK government white paper will be published this year, which could herald major regulatory changes to online gambling, and push major companies to push deeper into US markets.

888's fine from the UKGC marked the second time it had faced enforcement action.

In 2017, the group paid a £7.8million penalty package over concerns of its treatment of vulnerable customers.

888 shares have fallen today, and were down 2.44 per cent or 4.70p to 188.30p in late afternoon trading. The group's share price has fallen by over 40 per cent in the past year.