888 Holdings Announce Sharp Decline in Poker Revenue
Author: Jonathan Turner
888 Holdings, the UK-listed online gambling operator and a leading provider of online poker, announced, in a released report on Tuesday that their poker revenue has suffered a 28 percent decline in the first period of 2019.
Despite the sharp and worrying drop in poker revenue – through 888poker – from January 1st to May 18th, 2019, 888 Holdings did reveal a six per cent rise in revenue across the group’s activities, largely due to the continued rise in online sports betting and online casino revenue.
888’s Orbit Casino Platform, and its increase of 20 percent customer acquisition, played its part in the Holding company’s revenue rise, with revenue across all casino sections up 13 per cent.
888sport performed even better, with a 29 percent increase. The rapid expansion of online sports betting – which includes sports and leagues from around the world, including European soccer, tennis, and the best NFL bets, NBA and MLB – has benefitted 888 Holdings.
Yet, the decline of a flagship part of 888 Holdings’ operation should be a cause for concern for CEO Itai Pazner. However, it is worth noting that the negative growth is still a vast improvement on the 37% decrease experienced in Q4 of 2018.
“888 has enjoyed a solid start to the year with strong momentum in Casino and Sport across a number of the group’s major regulated markets,” Pazner said.
“Whilst Poker has remained challenging, we were pleased to see an improving revenue trend in Q1 2019 against Q4 2018. In addition, we are very encouraged by a 20 per cent increase in first-time depositors across the group’s B2C business in the period; this reflects 888’s outstanding marketing capabilities and is a key indicator of our growth prospects.
“As a diversified operator that owns its own technology, the Board continues to believe that 888 has a unique platform to deliver continued growth in the dynamic global online gaming industry.”
For a company that has played a key role in the development of online poker, the continued decrease in revenue percentage of 888poker is sure to raise questions about the long-term viability of poker to 888 Holdings.
The poker provider – originally launched as Pacific Poker in 2002 – has close associations with the world’s two leading professional poker series: The World Series of Poker (WSOP) and World Poker Tour.
888poker is the main sponsor of WSOP and since 2014 has been the exclusive organiser of the series’ qualifying rounds. Meanwhile, players on 888poker have been able to qualify directly for the WPT DeepStacks in Berlin since an agreement between 888 and the World Poker Tour was agreed in November 2017.
So, visibility and influence in the poker industry is not a problem for 888 Holdings, yet according to traffic ranking site PokerScout, 888poker still ranks behind competitors like Partypoker and Winamax when it comes to cash game activity.
It is clear then, that despite their continued relevance in the poker industry, 888 Holdings have chosen to focus their efforts in other areas of their business with faster growing markets – and indeed markets that boast far greater overall revenue.
The sports betting market, in particular, is expected to experience significant growth in the near future. According to market research, the Global Sports Betting Market is forecast to reach around $155.49 billion by 2024 – year-on-year increase of around 8.83 per cent.
It is therefore little surprise to see 888 Holdings apply greater investment and energy into the sports betting market. Where that leaves 888poker in the future should it continue to generate negative revenue returns will ultimately be a decision for the holding company.