888 hails Michigan casino growth as vindication of US igaming pivot

888’s chief strategy officer Vaughan Lewis has suggested the positive performance of the Sports Illustrated (SI) online casino in its debut US market of Michigan vindicates the operator’s decision to pivot away from sports betting.

Speaking as part of the London-listed operator’s H1 2023 financial earnings call yesterday, Lewis said 888 had been “really pleased” with the performance of the brand in the state since its launch in February, with the SI Casino brand quickly acquiring a 1% market share.

“We’ve got good customer data there. We’re seeing good retention, good player values and very attractive CPAs, so that’s given us the data, the knowledge, and the experience to really push on with that with that betting 2.0 plan,” Lewis told analysts during the call.

888’s betting 2.0 plan involves pivoting the SI sportsbook fan base towards igaming states, as a way of increasing its sports betting base through targeted marketing to find what the operator dubbed the “unsexy sweet spot” in its capital markets day presentation in November 2022.

This strategy, it is hoped, will bring about profitability in the US, helping to alleviate 888’s net debts which dropped £68m during H1 to £1.7bn.

888 heavily leaned into the launch of the SI Casino in Michigan, instigating a broadbase marketing campaign in partnership with a New York-based award-winning advertising agency, as well as debuting several free-to-play games in the state.

Addressing the potential impact of the igaming focus, Lewis explained: “The igaming market is huge in the US; about $6bn across the three main states and growing at 20% or so a year.

“Our plan is focused on getting low single digit market share of the igaming market, with sports [betting] across a wider range of states but only as a complementary product.

“Most of the focus will be on growth and investment on casino and we can get to nice levels of profitability with that low single digit share across those gaming markets.

“That’s the plan. It’s started well, it’s still quite early days with the casino in Michigan, but we’ve have been really pleased with that. Its really reinforced our confidence in our US plan,” he added.

At a group level, 888 reported a 165% year-on-year (YoY) increase in its revenue for the first half of 2023 to £881.6m, spurred in part by the impact of the acquisition of William Hill International on its financials.

Company EBITDA also skyrocketed during the period, rising 211% YoY to £155.6m.