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(Sharecast News) - UK gambling outfit 888 Holdings on Wednesday admitted its bet on the US sports market hadn't paid off and was ending its deal with Sports Illustrated and mulling a potential sale of its American consumer operations.
The Authentic Brands-owned Sports Illustrated and 888 entered signed an exclusive deal in 2021 as the magazine publisher looked to cash in on the online sports betting market after it was legalised in 2018.
"In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability," said 888 chief executive Per Widerström.
He added that 888 was looking at options for its direct-to-consumer US operations, including a potential sale or controlled exit, amid intense competition and lower margins which have made it difficult for the company to gain a foothold in the market.
Authentic will get a termination fee of about $25m, while 888 said the decision was expected to help save it about $6m to $7m a year in 2024 and 2025.
Reporting by Frank Prenesti for Sharecast.com
