Joint venture never worked
Online gaming giant 888 Holdings has announced that it will undertake a “strategic review” of its business-to-consumer (B2C) operations in the United States. The end result could result in the company selling its US B2C business, exiting the US market, or any of a number of other moves, whatever it feels can provide the most value.
Before the review even takes place, though, 888 has decided to split with once-venerable US sports magazine Sports Illustrated and dissolve their partnership on sports betting and casino gaming. 888 will pay SI’s parent company, Authentic Brands Group, $50 million in total: $25 million up front and the other $25 million between 2027 and 2029. The company believes it will save $6-$7 million in operating costs from this move in both 2024 and 2025.
With the Sports Illustrated partnership, 888 thought it would be able to make inroads in the sports betting market in the US, but it never happened. It has only launched three SI Sportsbooks in Michigan, Colorado, and Virginia, plus SI Casino in Michigan and 888casino in New Jersey.
With formidable opponents FanDuel, DraftKings, BetMGM, Caesars, and more soaking up most of the market, it was just too expensive for 888 to compete.
“The gross profit margin in the US is lower than the group level, reflecting significant direct costs of operating in the market including duties, market access fees, and license fees, in addition to intense competition from well-capitalized incumbent participants,” the company said in Wednesday’s press release. “The Group has determined that its current structure will not optimize returns, and has initiated a strategic review of the operations.”
SI probably done
Sports Illustrated has also not been the attractive brand that 888 thought it would be. Once the name in sports journalism in the US, it has plummeted in relevance with the decline in print media and the rise of strong online competitors, quality blogs, social media, and podcasts.
Recent months have been especially turbulent for the publication, probably marking the end of its 60-year run. In late November 2023, Futurism discovered and revealed that SI had been publishing AI-generated articles credited to fake authors with AI-generated profiles, including pictures. Then, in January of this year, Arena Group, which had bought the licensing rights to SI’s editorial operations in 2019 for ten years, missed its quarterly payment. Shortly thereafter, Authentic Brand Group ended the licensing agreement and announced it was laying off all of SI’s staff.
