888, a company that is one of the leaders in the sports betting and online gaming sector, recently announced the sale of selected B2C assets in the United States to Hard Rock Digital.
This strategy marks the end of its operations on North American soil. Therefore, with the end of the partnership with Authentic Brands Group, 888 also loses the exclusive use of the Sports Illustrated brand for online betting and gaming.
888 must cease operations in the US by the end of 2024
During the review process, 888 considered several alternatives to add value to its US business, including selling all or part of its B2C business.
But completion of the sale to Hard Rock Digital is subject to regulatory approvals. The process involves the completion of some phases and the final forecast is for the fourth quarter of this year.
In addition, 888 is undertaking a controlled exit of its remaining B2C assets in the US and it is expected that the exit from the country could generate a recurring annual benefit of approximately £25 million to adjusted EBITDA from 2025 onwards.
EBITDA is an indicator that measures the accounting profit related to the activity effectively linked to the company’s business. But part of these savings will be reinvested in growth and value creation initiatives.
The company has already incorporated the financial impact of the sale and exit from B2C in the United States into its announced financial goals. The announcement was made recently following the release of full-year 2023 results.
The one-off net costs related to this transaction are estimated to be approximately £40 million, with additional expenditure occurring from 2024 to 2029. This includes the previously announced brand license termination fee.
