888 ends Sports Illustrated deal as intense US competition sparks review
Reuters
Published Mar 06, 2024 02:35AM ET
Updated Mar 06, 2024 03:01AM ET
(Reuters) -British bookmaker 888 Holdings said on Wednesday it had terminated its deal with Sports Illustrated and was looking at options to sell or exit its direct-to-consumer U.S. operations, due to intense competition and low margins.
Sports Illustrated (SI), known for its eponymous sports magazine, had entered the online betting market in an exclusive deal with 888 in 2021 in a bid to entice SI fans.
Sportsbetting in the United States took off in the last few years since it was legalised in 2018, with players in the country partnering up with or buying out British gambling groups that have more experience in that field.
But it has been a long road towards profitability for many sports gambling groups including market leader Flutter-owned FanDuel, which turned profitable for the first time only last year.
"In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability," 888 CEO Per Widerström said in a statement.
BetMGM, jointly owned by Ladbrokes-owner Entain and MGM Resorts (NYSE:MGM), made its first profits in the second half of last year.
888, which is active in four U.S. states, said it was terminating its agreement with SI-parent Authentic Brands and would pay a termination fee of about $25 million.
The termination is expected to help save 888 about $6 million to $7 million per year in 2024 and 2025, it added.
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Written By: Reuters
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