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888 slumps following record UK fine

news-24

888 experienced a pre-tax loss in the first half of 2017 despite a 9% leap in revenues.

The operator fell into the red after being hit for $50.8m over a record £7.8m ($10m/€8.5m) fine in the UK for failing to protect vulnerable customers and a potential tax bill in Germany.

In a trading update, the company announced a pre-tax loss of $17.3m in the six months to June 30, from a pre-tax profit of $27.8m in the same period a year earlier.

888 saw a 9% year-on-year increase in revenue at a constant currency to $270m for H1.

The company’s EBITDA stood at $47.6m for the first half of 2017, up 8% from the adjusted first half 2016 EBITDA of $44.1m.

888 attributed its growth to its core casino vertical, momentum in its 888sport and strong performance in poker.

The company’s sport revenue increased by 45% in the first half of 2017 on a constant currency basis to $33.7m from $25m in the same period during 2016.

Itai Frieberger, chief executive of 888, said: “While the industry will continue to face regulatory headwinds in the second half of the year, trading in the third quarter has started well and in line with the board’s expectations.

“Underpinned by this momentum as well as the proven strengths of the group’s business model the board remains confident that 888 will achieve further progress and deliver its expectations for the full year.”

888’s revenue from the UK fell to 39% of the total in the first half, from 46% a year ago, after growth in markets such as Spain and Italy.

The firm said costs would increase because of increased regulation in the UK.

It added: “Further regulation, such as the expansion of gaming duty on casino, poker and bingo free bets in the UK taking effect in the second half of 2017, will increase the cost base for operators in the UK. At the same time, enhanced regulation in the UK around areas such as television advertising and bonuses will impact overall UK market growth.”

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