Affordability checks continue to weigh on 888 as online revenues fall

The impact of affordability checks for punters continues to weigh on 888 as the parent company of William Hill revealed in a trading update on Friday online revenues for the last three months of 2022 had fallen by five per cent.

888, which completed the acquisition of William Hill last summer, described online revenues for the quarter of £326 million as stable compared to the previous three months and said there had been a continuation of trends seen earlier in the year, with strong performances in other markets being offset by the impact of "proactive enhanced player safety measures within the UK online segment".

For the full year 888 said online revenue had fallen by 15 per cent to £1.33 billion from £1.57bn.

Last year 888 implemented a range of additional safer gambling measures, including lower affordability thresholds and reduced slot-stakes limits, in advance of the publication of the government's long-delayed gambling review white paper.

Affordability checks, which can involve customers being asked to provide sensitive financial information such as bank statements and tax returns in order to continue betting, have been blamed for a hit to British racing's finances of as much as £40m according to one estimate.

888 chief executive Itai Pazner said on Friday: "Revenues during the fourth quarter saw continued strong trading in retail, and a robust performance online.

"As previously discussed, we continue to see pressure on our UK online revenues from regulatory change including the ongoing impact of the enhanced player safety measures, but I am confident we are building a sustainable leading business for the future.

"As we look forward, we remain focused primarily on successful integration, execution and deleveraging in order to unlock the potential from our enlarged business."

888 said overall trading during the fourth quarter had been in line with board expectations with revenue of £458m, three per cent down on the previous year but two per cent ahead of the third quarter.

There was better news from the William Hill betting shop estate, where revenues of £131m were up five per cent compared to the previous year and six per cent on the third quarter.

888 said the World Cup in Qatar had provided a boostCredit: Richard Sellers

The World Cup in Qatar also provided a boost, with 888 saying it had been a strong period for both customer acquisition and engaging existing customers across online and retail, with online player days at William Hill up 22 per cent compared to the European Championship in 2021.

Earnings for the year were expected to be in line with previous guidance of between £305m and £315m.

888 also revealed that chief financial officer Yariv Dafna would step down from the role at the end of March. The company said it had started the search for his successor.

Analyst David Brohan of stockbrokers Goodbody described the update as "bang in line with expectations", but described the departure of Dafna as "disappointing", adding: "The key will be to get a strong replacement appointed as soon as possible to help guide the company through an important period."

888’s share price fell more than four per cent to 89.25p on Friday.

Elsewhere in the sector, Unibet's parent company Kindred Group reported its revenue for the fourth quarter had risen by 24 per cent.

However, the company said performance had not met expectations as turnover during the World Cup had not made up for reduced fixtures elsewhere.

Kindred said "immediate actions" would be taken to improve profitability in the short and medium term.

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