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888Sport Expanding To Colorado, Indiana and Iowa

James Murphy
by in Gaming Industry on
  • 888Sport is expanding outside of New Jersey into Colorado, Indiana and Iowa.
  • 888 Holdings offers sports betting and casino gaming in New Jersey along with casino gaming in Delaware and Pennsylvania. They offer poker in all three states.
  • 888 Holdings is based in Gibraltar and listed on the London Stock Exchange.

If you want to know which US states are ‘doing sports betting right’ you can just ‘follow the money’. More specifically, you can follow the investment–the states that are doing it right are getting plenty of it and the states that aren’t…not so much. Case in point–888Sport has announced the target states for their continued US expansion and they’re arguably the three best ‘post PASPA’ sports betting jurisdictions in the country. Colorado, Indiana and Iowa have so far run circles around every other state to come online since the Supreme Court decision. Not surprisingly, that’s where 888 Holdings is heading to expand their sports betting product.

Currently, 888Sports is available only in New Jersey though they offer casino gaming (888Casino) in Delaware and Pennsylvania in addition to the Garden State. They also offer online poker (you guessed it–888Poker) in all three states. Here’s the 411 from the press release announcing the three new US market access deals:

888 Holdings PLC (LON:888) has signed three multi-year market access agreements to launch in the US states of Colorado, Indiana and Iowa.

It comes as the company is increasing investment into the US amidst new gaming regulations in Germany.

The US launch will initially be under the 888Sport brand for 2021, the company noted.

888Sport will operated be under the licence of the Colorado Grande Casino, in Colorado, under licence to Catfish Bend Casinos in Iowa and in Indiana it will operate under agreement with Caesars Entertainment owned Harrah’s Hoosier Park.

888 announced the new US markets simultaneously with a trading update for the second half of 2020:

888 has continued to deliver a strong operational performance during the second half of the financial year reflecting: the Group’s high levels of customer acquisition during 2019 and 2020; the benefit from the ongoing structural shift in consumer behaviour towards online services; significant new product roll-outs; and the Group’s increased vigilance on safe gambling and player protection.

As a result, the Board expects that revenue and adjusted EBITDA for the full year will be ahead of its prior expectations. Revenue is expected to be approximately 45% ahead of 2019. The adjusted EBITDA margin for the Period is expected to be approximately 18.5%, consistent with the margin achieved in the first half of the year.

Considering the new gaming regulations that came into effect in Germany in October and the Group’s plans to increase levels of investment in the U.S. market in the year ahead, the Board’s expectations for 2021 remain unchanged. The Group intends to provide a Post-Close trading update in respect of its financial year ended 31 December 2020 in January 2021.

Itai Pazner, CEO of 888, gave these comments on his company’s YTD performance and expansion into additional US states:

“We are delighted to sign these agreements with three great partners – the Colorado Grande Casino, Catfish Bend Casino II LLC, and Harrah’s Hoosier Park – that will enable 888 to bring its first-class online sportsbook to bettors in Colorado, Iowa and Indiana. The U.S. online betting and gaming market has huge growth potential, and we continue to build a strong platform for growth across both our B2B and B2C operations.

In addition, we are pleased with 888’s trading during the second half of 2020. This performance continues to reflect strong FTD trends in line with the Group’s recreational customer focus as well as the structural shift towards online services being seen across several consumer-facing industries. We have continued to prioritise safe gambling and recognise the impact of COVID-19 on the lives of 888’s customers across global markets. 888 continues to invest in protecting customers and has again increased the volume of interactions with customers initiated by 888’s safer gambling team in order to help prevent gambling related harm. Underpinned by 888’s core strengths as a responsible operator with outstanding technology, the Group remains well positioned to deliver further strategic progress.”

Yaniv Sherman, SVP Head of Commercial Development at 888, commented on the Group’s U.S. market access deals:

“Expanding 888Sport.com into these three states represents another major milestone in our ongoing growth across the regulated U.S. online gaming market. We have deployed our proprietary technology in the U.S., and our exciting pipeline of new products will deliver industry-leading propositions to customers across both our B2B and B2C operations. We continue to appraise strategic partnerships that will provide additional brand-building and market access opportunities for 888 across the U.S. market in the near future.”

There has been speculation over the past couple of months that 888 will make a bid for the European facing online component of William Hill. Caesars Entertainment has made it clear that they purchased William Hill exclusively for the company’s US retail and online operations. Caesars continues to get their house in order following the mega-merger between Eldorado Resorts and the former Caesars Entertainment (Eldorado Resorts was the surviving entity but they rebranded as Caesars Entertainment just to confuse everyone). They continue to offload smaller regional gaming properties–most recently, the Belle of Baton Rouge riverboat casino in Louisiana–and in their most recent earnings call intimated that they could sell one or more of their Las Vegas properties as well. It wouldn’t be a surprise if they made a deal for William Hill’s European assets sooner rather than later.

888 Holdings is well known throughout Europe but less so in the US. Fortunately, they’ve got a bio on the corporate website that provides some background:

888 Holdings Public Limited Company (888) is one of the world’s most popular online gaming entertainment and solutions providers. 888’s headquarters and main operations are in Gibraltar and the company has licenses in Gibraltar, the UK, Spain, Italy, Denmark, Ireland, Romania, Nevada, New Jersey and Delaware.

888 has been at the forefront of the online gaming industry since foundation in 1997, providing to players and B2B partners an always innovative and world-class online gaming experience. At the heart of 888’s business is its proprietary gaming technology and associated platforms, allowing 888 to differentiate itself from and innovate ahead of competitors.

Immediately after the Supreme Court decision striking down PASPA a number of media outlets solicited my thoughts. I told them that it had been a long time coming but my concern was that the various state governments would find a multitude of new and different ways to screw up the implementation of sports betting. I had no idea at the time how prescient this observation would be.

Colorado, Indiana and Iowa have been the exceptions and the regulatory framework in the three states have much in common. They all provide for varying levels of competition in their online sports betting industry and further make their jurisdiction attractive to gaming companies with reasonable licensing fees and tax rates. That’s why Colorado residents have 17 online ‘outs’ (and counting) and why companies like PointsBet have opened offices in the state. Indiana now has a dozen online sportsbooks and Iowa is closing in on double digits.

You think that it would be simple for new states coming online–just take the best elements of Colorado, Indiana and Iowa and mix in a bit of the top ‘legacy’ states of Nevada and New Jersey. Play the ‘long game’ and develop an industry that will boost tourism, create jobs, attract investment capital and bring in plenty of tax revenue. Build a framework for a competitive marketplace and make it attractive for gaming companies to move in with low taxes, reasonable fees and a light regulatory touch. While you’re at it, make it prioritize the needs of sports bettors over the whims of bureaucrats. Easy right?

Unfortunately, the stupidity of government knows no bounds and few have followed this simple blueprint. If states don’t relegate sports betting to the status of a gimmick game for the state lottery they come up with usurious tax rates in hopes they can circumvent the need to develop an industry. They arbitrarily restrict competition which allows corrupt politicos to use gaming licenses as a bargaining chip. Most insidiously, the ignore the wealth of knowledge and experience available to them in states like Nevada and in the process come up with regulations that are downright absurd. Some states manage to check all of these boxes–like the District of Columbia with their lottery run grease fire or Tennessee with their 10% mandatory hold requirement that defies ‘bookmaking 101’, logic and simple math.

But I digress–we’ll return to these topics in the near future. Look for 888Sports to go live in Colorado first in Q1 2021 with Indiana and Iowa likely in Q2. Colorado in particular is going to be red hot by Spring 2021 with 888, Wynn Sports, Betsson, PlayUp, Bet365, BetAmerica’s mobile app (they already have a retail presence at Billy’s Casino in Cripple Creek) and Tipico all expected to go live. There will likely be others joining the party but just counting the companies that have announced plans to enter Colorado they state will be looking at 24 ‘outs’ with more certainly on the way.

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