UK global legal sports betting giant 888 Holdings will see full-year year-over-year revenue decline by 3% to £1.85 billion ($2.25 billion) in 2022, according to its pro forma preliminary earnings report for 2022.
The fall in revenue is largely attributable to a disappointing 15% year-over-year drop in 2022 online revenue from £1.57 billion ($1.92 billion) to £1.33 billion ($1.62 billion), however, the soft earnings performance is "in line" with previous corporate guidance issued in October, according to 888 Holdings CEO Itai Pazner.
The YoT decline in mobile wagering revenue for 888 is attributed to two factors: new gaming regulations that required the sportsbook to introduce enhanced player safety measures in the UK and the shuttering of its Netherlands gaming operations.
Revenue from online sports betting sites would have only decreased by 4% in the absence of these two extraordinary balance sheet items, explained 888 Holdings, the parent company of William Hill, 888casino, 888sport, 888poker, and Mr Green sportsbook brands, and part owner of the SI Sportsbook in the U.S.
Fourth-quarter revenue in 2022 fell by a modest 2.6% to £458 million ($558 million), partially driven by a 5.5% decrease in online revenue to £326 million ($398 million).
"As previously discussed, we continue to see pressure on our UK online revenues from regulatory change including the ongoing impact of the enhanced player safety measures, but I am confident we are building a sustainable leading business for the future," said Pazner.
The fall in Q4 mobile wagering proceeds more than offset the 4.8% increase in land-based revenue to £131 million ($160 million), registered by 888's retail William Hill betting subsidiary.
Online sports betting and iGaming proceeds accounted for the lion's share of 2022 revenue at £1.33 billion ($1.62 billion), which represents 72% of overall revenue. Correspondingly, 888 retail revenue skyrocketed from £337.0 million ($411 million) to £519.0 million ($633 million), a 54% gain over 2021 results, which were extraordinarily impacted by COVID-19 lockdowns.
CFO stepping down in March
Apart from the mixed numbers contained in the pro forma revenue report, 888 Holdings also announced the unexpected exit of CFO Yariv Dafna, who will be leaving the company on March 31 following the release of 888’s final full-year 2022 financial statement.
Dafna was largely responsible for orchestrating 888’s acquisition of William Hill’s non-U.S. assets and his departure comes after spending the last 2.5 years overseeing the company's finances.
"The board and I would like to thank Yariv for the contribution he has made to 888 including playing a crucial role in the completion of our transformational combination with William Hill and leading the recent successful financing of 888’s external debt," said Pazner.
Integration of William Hill sportsbook completed
The past year also saw 888 finalize the acquisition of its prized William Hill sportsbook in July 2022, and its preliminary full-year earnings report also includes results from Hill's first six months of the year.
In the company report, Pazner also indicated that he's pleased with the ongoing process of integrating the William Hill sportsbook into 888's corporate operations.
"During the fourth quarter of 2022, our teams continued to make rapid progress in integrating these two highly complementary businesses, and have started the process to migrate Mr Green to our proprietary global tech stack, as we execute against our strategic roadmap that we outlined at our recent capital markets day," he said.
"As we look forward, we remain focused primarily on successful integration, execution, and de-leveraging in order to unlock the potential from our enlarged business."
