888 swings to M net loss on UKGC fine, German tax provision
British online gaming company 888 Holdings posted a US$17 million net loss in the first half of the year on exceptional charges of $50.8 million, including a settlement with the UK Gambling Commission.
In a regulatory filing, 888 reported that the UK Gambling Commission’s record £7.8 million (US$10 million) fine and charges for tax provisions in Germany dealt a heavy blow in the company as it saw a reversal of fortune this year from a profit of $27.8 million last year.
The British gambling watchdog slapped 888 with a hefty fine last week after it was found liable for allowing over 7,000 customers who had chosen to self-exclude from their casino, poker or sports betting platform to access the firm’s bingo platform via a technical failure.
“888 takes its obligations as a responsible operator seriously and remains dedicated to providing players with a responsible as well as enjoyable gaming experience,” the firm said. “During the period 888 announced that it had been informed that the United Kingdom’s Gambling Commission (‘UKGC’) was conducting licence review of its licensed activities. 888 worked cooperatively and closely with the UKGC and reached a resolution to this process which was published on 31 August 2017.”
On the other hand, the company took an exceptional charge of $50.8 million, including a $45.3 million charge related to potential value added tax (VAT) on services in Germany prior to 2015.
If there’s any consolation, the sports betting and casino segment continues to provide fuel for 888’s revenue growth.
888, which operates 888 casino, poker, sport and bingo brands, announced that its revenue rose by 9 percent to $270.1 million in January to June 2017 period from US$262.0 million last year.
Revenue at its casino and sports divisions rose 11 percent and 35 percent respectively with the latter performing strongly in Italy.
On an adjusted level, 888’s earnings before interest, tax, depreciation and amortization jumped to $47.6 million from $44.1 million last year.
“The global online gaming market is dynamic and will continue to grow driven by technology, regulatory and marketing developments,” Itai Freiberger, chief executive officer of 888, said in a statement. “However, 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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