Bookmaker 888 quarterly revenue falls amid UK regulatory uncertainty

(Reuters) -888 Holdings Plc said on Tuesday its third-quarter revenue dropped, as the British bookmaker was weighed down by the country’s tightened online player safety measures and the closure of its Dutch operations.

Revenue in the reported period fell 7% to 449 million pounds ($509.48 million) from year-ago figures, the group said, adding that adjusted core earnings in the quarter improved from the first half of the year.

Gambling firms, which are seeing more punters returning to retail shops and witnessing a drop in online gaming from COVID-19 peaks, are now staring at challenges from a cost-of-living crisis as customers seek to cut non-essential spending.

“We are changing the mix of our business to a lower spending, more recreational player base that gives us confidence in the long-term potential for our UK business,” Chief Executive Officer Itai Pazner said.

888’s peer Entain said last week that it was betting on the soccer World Cup starting next month to help improve its fourth-quarter online gaming revenue after its total gaming revenue rose marginally in the third quarter.

As of Sept. 30, 888’s gross debt stood at 1.8 billion pounds, while a series of hedging arrangements helped fix 35% of interest costs.

“The debt is covenant-free and management has swapped and fixed a tranche despite the tough debt market,” an analyst at Peel Hunt said in a note.

888 expects revenue in the fourth quarter to exceed the third and be in line with levels seen in the same period in 2021.

($1 = 0.8813 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Sherry Jacob-Phillips)