The recent announcement of the deal struck between 888 Holdings and Jet to acquire a number of brands, including Costa Bingo, has sent more than a few ripples through the online gaming industry.
The deal, which is worth £18 million, will help 888 consolidate its position as one of the world’s largest providers of online gaming and entertainment providers and add to its already impressive portfolio of brands.
Some may be wondering whether such a purchase is a good idea at a time of Brexit-related economic uncertainty, but one only has to look at the online gambling industry as a whole to see that this is far from the case.
While many industries are static or in decline, online gambling is undoubtedly on the up an up.
According to the most recent Gambling Commission figures covering the period between April 2017 and March 2018 remote gambling accounted for well over 33% of the total gross gambling yield for the UK.
In hard cash this meant £5.4 billion, a 13.7% increase over the previous 12 months’ figures.
As a provider with both business to consumer and business to business divisions, 888 Holdings are in a very strong position to profit from a booming industry, as it has throughout its history.
From as long ago as 2005, the organisation has been listed on the London Stock Exchange.
Coincidentally, this was the same year that it became a founding member of eCOGRA, the body that has been set up to ensure greater consumer protection in a previously relatively unregulated industry.
Other significant milestones in the story of 888 have included the transfer of all of its business operations from the Caribbean to Gibraltar in 2003.
In 2011, 888 Holdings also showed great foresight by forming a partnership in the US with Caesars Interactive Entertainment. As a result, it currently operates in Nevada, Delaware and New Jersey.
The climate in the States may soon become more relaxed in all areas of online gaming, following last year’s historic overturning of the ban on sports betting.
This suggests it could become a lucrative field – potentially even more popular than gambling has proved to be in the UK.
The fact that between 2017 and 2018 revenue from sports betting outside the UK rose by 34% for the organisation underlines the potential for the future.
Unite and conquer
As you’d expect, such a lucrative market as online gambling is also a very competitive one. To address this fact, many of the leading gaming companies have been on the acquisition and mergers trail over the last few years.
The philosophy has been that size brings strength and among the most notable mergers have been the coming together in 2016 of Ladbrokes and Gala Coral as well as Paddy Power joining forces with Betfair.
Naturally, not all acquisition attempts result in success as 888 Holdings discovered in in the same year.
At the time they were attempting to take over William Hill in a joint venture with the Rank Group. If it had come off, the £3 billion deal would have created the biggest gaming group in Britain.
However, there was a revolt amongst William Hill shareholders who considered the offer undervalued, so it never came to pass. This year, William Hill has merged with Mr Green, indicating that the intention may have been there, but the timing just wasn’t right.
A more successful coming together occurred in 2009, when 888 made one of its earliest and most significant moves into the online bingo market, with the acquisition of Wink Bingo.
Aimed chiefly at women, the online bingo firm provided them with a ready-made portfolio of bingo games with the appealing extra element of creating a genuine online community.
This extra layer of engagement tapped into the time-honoured appeal of bingo as a sociable game that could also prove to be lucrative for winners. It also pre-empted a resurgence of the real game itself.
Today more and more places are starting to offer bingo as part of the night’s entertainment, if in a very ironic and knowing way.
In the 22 years since it was originally founded in the British Virgin Islands, 888 has not only based their own success on acquiring, or trying to acquire, other companies.
Throughout their history there has been an equally strong focus on innovation and development. For example, in 2009 the decision was made to create Dragonfish, a business to business division to design and market its own range of games both to 888 brands and outside customers.
It’s through a partnership arrangement between Dragonfish and Jet that this deal has been arranged, with the result that 888 will now have direct control over Costa Bingo, Sing Bingo and City Bingo.
By strengthening the line-up of the bingo brands, it gives 888 even more fire power in the battle for dominance of the online gambling space.
It also means that the individual brands can be further refined to appeal to a particular demographic. This is something that 888 has done especially well with its casino brands. A prime example is its 777 Casino that uses classic retro styling to re-create the Las Vegas of the 1960s.
There are also clear signs that this won’t be the end of the 888 acquisition trail in 2019.
Before even a quarter of the year has passed, it’s also been announced that it has bought the BetBright sports book technology company for £15 million.
And, with reported plans to expand its operations across Europe in countries including Portugal, Italy and Sweden, it’s looking like 2019 could be the biggest year ever for 888 – we’ll just have to wait and see.