Part 1: The UK – Covid-19 compounds contraction
Selected company-by-company analysis
888 – good things come to those who
wait
Having had to delay its results announcement
due to the market chaos at the end of March,
888 had to wait to show investors just how
much the company’s fortunes have improved in
the past year.
Total group revenue was up 10% on a constant
currency basis to US$560m (£454m), driven by
casino (up 17%) and sports betting (up 19%).
Not coincidentally, the company’s UK position
has improved with the growth. Revenues from the
UK grew to 36% of group total or circa $202m as
the company claimed that a focus on recruiting
recreational customers had paid off. The company
said first-time depositors had risen 26% over the
course of the year, while ARPU decreased 10%.
Notably, VIP revenues as a percentage of the
UK total fell to 4%, from 35% in 2018 and 65%
in 2017, which suggests the company has gone
through a complete overhaul of its marketing and
customer relationship practices in the past two
years and with nothing by way of a detrimental
effect on revenues.
Of course, the overhaul was needed. Back in
August 2017, 888 was on the wrong side of a
then record £7.8m fine from the UK’s Gambling
Commission for self-exclusion and customer
care failings.
In response, 888 has cleaned up its act and
reaped the benefit of an increased focus on its
‘safer gaming’ efforts, to the extent that it now
says compliance and safer gaming are “at the
forefront” of the company’s operations.
Analysts at Peel Hunt suggested the company
was now more able to withstand any potential
further regulatory shocks than many of its
competitors. Bearing in mind the temporary ban
on TV and radio advertising announced at the end
of April by the BGC, the Peel Hunt team noted
that in Italy, 888 increased its first-time depositors
number by 18% even as an advertising ban fully
came into force.
“A shift away from the relatively blunt
instrument of display advertising and in favour of
the precision of digital marketing plays to 888’s
strengths,” the Peel Hunt team added.
Gamesys – in a ‘sweet spot’
There has been a circularity about Gamesys;
having sold the JackpotJoy business to Intertain
back in 2015, this then became JPJ Group, which
then subsequently regained the Gamesys name
after a reverse takeover last year.
In amongst all that change and change about,
the UK casino and bingo business has continued
to plough its very fruitful furrow. In the most
recent trading statement from the company,
Table 2: 888 FY 2019 selected figures
Group revenue ($m) Est. UK revenues ($) Sports exposure (% of total
revenues)
Source: Company reports
580.6 202 16
Table 3: Gamesys selected figures
Q120 revenues (£m) Q1 growth rate (%) Percentage of group
revenues derived from
the UK (%)
Sports exposure as
percentage of total
revenues (%)
Source: Company reports
155.3 19 63 0
iGB Market Monitor • The UK and Sweden • May 2020 5