The global boom in online gambling is leading to major re-organisation among familiar international betting and gaming brands.
The latest demonstration of the exciting changes in the industry is that market-leading UK gambling business – 888 Holdings has agreed to sell its entire bingo division. These thriving bingo businesses include such familiar online names as winkbingo.com.
The buyer of these bingo brands is Saphalata Holdings, which has paid £38 million (US$50m) for 888’s entire bingo division. Saphalata Holdings are better known as a part of the Broadway Gaming Group. Broadway is a specialist in online bingo operations.
These are operated on the back of its five main bingo brands run from its Dublin headquarters. Broadway’s bingo brands are Butlers Bingo, Glossy Bingo, Rehab Bingo, Dotty Bingo and Bingo Diamond.
Broadway’s £38m initial bill for 888’s bingo brands could rise still further. The agreement with 888 includes a stipulation of a further payment of £3m ($4m) if revenue from these transferred bingo operations rises above certain pre-determined points.
The decision by the successful Gibraltar-based gaming group to sell off all its bingo operations came after 888 agreed to buy the non-US operations of the William Hill organisation last year. The deal to acquire the iconic UK High Street betting organisation from hotel and casino group Caesars Entertainment was worth £2.2 billion.
Now 888 has recouped some of that huge outlay by selling off the bingo sections of its wide-ranging business to Saphalata Holdings. The sale also allows 888 to focus its attention on its highly profitable core businesses.
888’s Bingo brands have brought a significant amount of their revenue over the past years.
The bingo sell-off comes despite 888 holdings announcing excellent trading performance figures in recent years. This includes the important details that revenue generated from its bingo operations has been very impressive. The holding group’s bingo divisions reported around $65million of revenue in 2020 and underlying earnings of $7.4million.
The new deal with Broadway includes 888 handing over all its bingo assets, including its technology, operations and all its consumer brands. The seller is also providing business support and advice during and after the hand-over with the aim of making the transfer go smoothly for at least a year.
Industry insiders have speculated that the deal will be dependent on UK gambling authorities allowing the transferred bingo businesses to be relicensed by their new owners. There is no suggestion that this won’t be allowed to happen.
Itai Pazner, 888 CEO, said the deal was struck following a “strategic review”. “This strategic transaction will enable 888 to further increase its focus on its core platform and unified, scalable and proprietary technology, and grow our key product verticals of casino, sport and poker, as we continue in our mission to be one of the world’s leading online betting and gaming businesses.”
He paid tribute to the performance of the bingo arm of the business and said it “had been an important part of 888’s history.” Pazner predicted that the future for the bingo business was still very bright.
David Butler, CEO of Broadway Gaming, commented that his group is “delighted” with the deal. “We have worked intensively with the 888 group over the course of the last few months and have been very impressed by the quality of the bingo platform and product,” he said.
Industry experts are welcoming the move as a sign that the gambling industry is becoming less concentrated in the hands of a small group of companies.
Meanwhile 888 is explaining the sale as part of a strategy to focus on its main business: online gaming. As a growing FTSE 250 company, 888 Holdings is also believed to have another motive for the bingo sale.
The gaming group is believed to be trying to reduce the complexity of its wide-ranging compliance operations to satisfy international gambling authorities. Across all its operations the 888 Group has been dealing with a large number and very diverse type of accounts. These require a complicated amount of administration to comply with different regulations around the world.
Meanwhile the 888 Group is dealing with the challenge of assimilating the purchase of the William Hill network, which includes the bookmaker’s estimated 1,400 stores and around 2 million users across the UK. The purchase also included William Hill’s various European gambling brands, like the Stockholm-based Mr Green.
This demonstrates to some extent the volatile nature of the gambling industry in a period of change. The Caesars organisation had only recently bought the entire William Hill operation for £2.9billion. It always stated it had the intention of then selling off the bookmaker’s operations outside the United States. This initiated a bidding battle for William Hill’s assets between various big-hitters in the industry in which 888 appears to have emerged victorious.
The ambitious purchase shows the strength and ambition of the 888 Group. The online gaming boom has particularly benefited 888’s operations in recent years. In fact, the whole industry appears to be boosted by cultural changes and by important liberalisation in US regulations too.
Sports betting, in particular, has taken off in the US in recent years. This follows a landmark Supreme Court decision to overturn a Federal Court verdict that originally banned sports betting.
Industry watchers expect 888 Holding’s success to continue in the wake of the online boom and the gradually liberalisation of gambling restrictions internationally. The group is expected to perhaps perform even better when it can concentrate more strategically on its core operations, which are casino betting, and online businesses.