(Alliance News) - 888 Holdings PLC on Friday reported a falling interim profit as gambling and betting in the UK took a hit as stricter gambling policies took effect.
Pretax profit in the half-year to June 30 dived 66% to GBP14.4 million from GBP41.9 million a year ago.
Revenue fell to GBP332.1 million from GBP380.9 million. 888 expects revenue in the second half to be in line with the first half.
888 explained revenue was down "with the majority of the business seeing relatively stable revenues, offset by declines in the UK of 25% reflecting the implementation of more stringent safer gambling policies, and the closure of the Netherlands." Excluding the UK and Netherlands, revenue was up 2% year over year, it noted.
The bookmaker added: "During the past year the group has implemented a range of additional safer gambling measures including lower affordability thresholds and reduced slots stakes limits, and 47% of UK actives in the second quarter now have limits to help ensure a safe and entertaining betting and gaming environment. The group believes it has maintained market share despite this, with the wider market also seeing similar trends, and that the strong player protections in place lay the foundations for sustainable growth."
On March 1, the UK Gambling Commission said it issued a GBP9.4 million fine for 888 UK Ltd as it found "social responsibility and money laundering failings." One of the responsibility issues was 888 giving a customer on a GBP1,400 per month salary a monthly deposit cap of GBP1,300, the commission said.
Meanwhile, 888 on Friday attributed the decline in profit to increased legal and professional costs associated with the acquisition of the William Hill Global PLC businesses and costs related to the disposal of its bingo business.
It added it saw continued strategic progress in the first half following its purchase of the non-US assets of William Hill.
The firm declared no interim dividend, compared to one of 4.5 US cents a year ago.
In July, the Gibraltar-based online betting and gaming company explained that it will begin reporting financial results in sterling from August.
"The group's financial performance in the period primarily reflects market conditions in the UK. However, we believe the proactive actions we have taken to increase player protections and drive higher standards of player safety have put the group in an even stronger position for the future. In the second half of 2022, our main focus is on integration, delivering on our synergy plans, and driving higher profitability across the business," said Chief Executive Officer Itai Pazner.
"This focus on integration, execution and de-leverage will unlock the huge potential from the enlarged business. These actions will position us to take advantage of significant growth opportunities ahead of us, as we leverage our leading technologies to create a best-in-class global betting and gaming platform," Pazner added.
888 Holdings shares fell 2.2% to 156.50 pence each in London on Friday morning.
By Tom Budszus; tombudszus@alliancenews.com
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