Leading betting and gaming group 888 Holdings has issued a cautionary statement to its investors, indicating that its Q3 performance may fail to reach initial expectations. The London Stock Exchange (LSE)-listed company remained optimistic that this downturn would remain temporary, expecting a swift recovery in 2024. This announcement closely mirrors that of Entain, signaling a potential industry-wide slump.

Negative Factors Compounded To Hinder Growth

The expected 10% Q3 drop should place 888’s quarterly revenue at roughly £400 million ($487.61 million). These results may indicate an unfortunate trend for the company as last year saw another 7% slump compared to 2021’s revenue of £484 million ($590.31 million). 888 attributes this negative trend to several factors, noting that the company remains positioned to overcome these challenges and emerge stronger than before.

Sustainability initiatives form one of the primary factors behind the projected revenue decrease. While this reflects the company’s commitment to responsible gaming, it impacted profits. Enhanced compliance measures in the UK similarly affected revenues in one of the operator’s primary markets. 888 cited ‘customer friendly sports results’ as another negative factor across all jurisdictions.

Compliance challenges are a running theme in the report, as the operator admitted that regulatory changes in dotcom markets resulted in the slower-than-expected recovery in customer activity and revenue. Furthermore, a shift in 888’s marketing strategy focusing on ‘higher return marketing’ resulted in temporary disruptions as the company adjusted to its new brand-led strategy.

The Company Maintains Its Leadership Position

Despite the Q3 revenue setback, 888 Holdings maintains a positive outlook. It expects improvements in the remainder of the year, with Q4 revenue projected to be sequentially higher than Q3, although still lower year-over-year by a mid-single-digit. 888 Executive Chair Lord Mendelsohn noted that the operator was making significant strides to improve long-term sustainability, lauding the team’s efforts.

We are strongly focused on investing to deliver good levels of expected revenue growth in 2024 as we progress towards our clear target of more than £2bn of revenue in 2025.

Lord Mendelsohn, 888 Executive Chair

888’s troubles closely mirror those of Entain, one of its primary competitors. The global gaming company cited slower growth in strategic regions and UK regulatory headwinds as the primary reasons behind the drop in projected revenue. These shared challenges could reveal insights regarding the wider gambling industry as many regulators reaffirm their focus on player protection, forcing operators to adapt.

888 is currently undergoing a leadership transition as Per Widerström prepares to assume the position of CEO. This change in leadership is part of the company’s broader strategy, which includes repaying loans related to the £2.2 billion acquisition of William Hill, achieving higher profit margins, and maintaining a net debt of less than 3.5x.

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PAGCOR has clarified that the matter concerned not so much gambling as much as it did job postings and advertisements promising excellent salaries and working conditions. According to the regulator, those ads were the work of “unscrupulous groups” involved in human-trafficking and crypto scams.

Beware of Fake POGO Job Postings, Says PAGCOR

POGOs have been causing a lot of stir in Asia, and specifically those that have been running their operations illegally in the region. Unlawful POGOs have been attracting local and foreign nationals with the promise of tidy salaries, with those arriving only to find themselves put in squalor and exploitative working conditions.

Workers attempting to leave have been beaten and placed in captivity, PAGCOR warned, citing years of reports about the issues. However, PAGCOR is now doubling down on its efforts to inform the public and keep job-seekers from falling prey to such predatory practices. For the most part, the offers that are posted concern Customer Service Representative positions that have to do with crypto trading.

The ads run by the criminal offer a high basic salary along with bonuses. However, many of these ads are proving bogus and the work of human-trafficking rings, organized criminal groups, and scammers. PAGCOR has urged the public to always make sure that a POGO that is advertising jobs is part of the Offshore Gaming Licensees and Service Providers list.

This is a list of entities that are authorized to offer gambling legally in the country and are the only ones that can be posting job offerings for similar positions. This renewed regulatory zeal comes in the wake of enforcement action that saw a POGO provider operating in Sun Valley Clark had its license suspended.

The country has also been grappling with another matter, which is the appearance of a fake website that “stole” the name of a US history awareness project and used it to beguile unwitting citizens into illegal gambling.

PAGCOR has been toughening its tone on gambling operations. The regulator explicitly warned POGOs to not sub-license to third parties, as that would breach their own licensing conditions and lead to enforcement action.

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