888 reaches deal to sell US B2C operations for undisclosed amount

28th Mar 2024 07:42

(Sharecast News) - Gambling group 888 has announced that it is selling its B2C operations in the US to online sports betting and interactive gaming company Hard Rock Digital after a strategic review of the business.

The sale of the struggling unit is expected to boost adjusted EBITDA by £25m each year from 2025 onwards, £10m of which will be reinvested into "growth and value-creation initiatives".

The stock was up 4.6% at 92.55p in early deals before slumping 2.2% to 86.55p by 0832.

888 said earlier this month that it was looking at options to deliver value for the business, including a sale and controlled exit of its US B2C operations, which are active in four states across America.

The unit, which operates SI Sportsbook and SI Casino in Michigan, SI Sportsbook in Colorado and Virginia and 888casino in New Jersey, operates at a lower profit margin than the rest of 888 due to significant direct costs of operating in the market including duties, market access fees and licence fees, in addition to intense competition from well-capitalised incumbent participants.

888 said the deal would likely close in the fourth quarter of 2024 but result in one-off cash costs of £40m.