888 Reveals Profitable Year but Casino Struggles Persist

30 March 2009
888 Holdings, the Gibraltar operator and software supplier, finished 2008 profitably, with business-to-business revenue up an estimated 120 percent, year over year, and business-to-consumer revene, 15 percent.

Total operating income came in at $262.2 million, up 21 percent over 2007, with profits after tax in at $37.1 million, up 8.4 percent.

Revenue from casino was up 14 percent to $135.1 million, year over year, though growth between the third quarter and the fourth stagnated, down 11.9 percent on "unprecedented challenging trading conditions" and the broader economic downturn.

Poker fell just 4 percent -- beating PartyGaming (down 12 percent) -- to $77.2 million.

Meanwhile, emerging offering -- a segment which includes sports betting, bingo and live dealer -- grew 208 percent to $44.5 million.

The company inked 14 b-to-b deals during the period, including Sportech, a pools-betting operator and former client of CryptoLogic Ltd.

And Monday, the company's fourth b-to-b deal this year was announced with The Racing Post, a United Kingdom betting and racing publication, to provide a "comprehensive online gaming operation" that will go live sometime in the second quarter.

With regard to first-quarter trading, the company said average daily revenue was up 5 percent on the fourth quarter, but that total first-quarter revenue is expected to be slightly lower than the fourth quarter.

Poker and the emerging offering segment have grown, sequentially, it said, but trading in casino continues to be "challenging."

Gigi Levy, the company's chief executive, said during a presentation to shareholders Monday that the company would continue to reinvest profits aggressively during the downturn.

"Now is the time to have a quantum leap forward when others aren't looking," he said.

No material update was given on the company's negotiations with the United States Department of Justice.

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