It seems that one of the largest gambling operators in the UK, 888 Holdings, is facing a hard time.
After publishing its financial results for the first six months of 2017, it became clear that the company swung to a loss due to massive exceptional costs, in spite of the fact that it registered a revenue increase over the period.
Financial Results for H1 2017
Today, 888 Holdings, which is currently one of the most popular iGaming companies and solutions providers in the country, revealed its half-year results for the six months ended on June 30th, 2017.
Despite the fact that 888 Holdings saw a 3% increase in its revenue over the period, this could not compensate for the pre-tax loss of $17.3 million. In comparison, only a year ago, the operator announced a pre-tax profit of $27.8 million, which makes the loss even scarier. As explained by 888 Holdings, the poor result was due to “exceptional charges” over the first six months of 2017.
The afore-mentioned exceptional costs over H1 of 2017 reported by the operator amounted to $50.8 million. The company revealed that potential past VAT matters were estimated to a total of $45.3 million, while the other $5.5 million came as a result from the UK Gambling Commission settlement.
Apart from that, 888 Holdings revealed an increase in its business-to-company revenue, which reached $242.6 million in comparison to $229.5 million posted a year earlier. A 6% increase to $146 million was registered in the company’s casino revenue, while the poker revenue rose by 1% over the first six months of 2017. The gambling operator also managed to generate a massive 35% increase in its sport revenue, which reached $33.7 million.
On the other hand, the business-to-business revenue of 888 Holdings fell by 15%, reaching $27.5 million compared to the $32.5 million announced over the first six months of 2016.
”Exceptional Charges” Blamed for Pre-Tax Loss
As mentioned above, the operator blamed exceptional costs for its pre-tax loss over the first six months of the year. Over the first half of the year, the company was hit by increased potential past VAT matters, estimated to the massive amount of $45.3 million. In addition, a UK Gambling Commission settlement over the period cost 888 Holdings another $5.5 million.
Apart from the negative effect of these exceptional charges, the company is also likely to suffer another period of financial trouble, considering the fact that a few days earlier it suffered one of the largest fines ever imposed in the history of UK gambling.
Only a few days ago, Casino Guardian reported about an enormous financial penalty imposed on the online gambling operator by the UK gambling regulatory body. The penalty, which has been imposed on the company for failing to handle some cases of customers put at risk, amounts to more than £7.8 million.
Recently, the UK Gambling Commission has been especially focused on adequately protecting more vulnerable players and keeping them away from possible gambling addictions and problem gabling behaviour. The local gambling regulatory authority has imposed the enormous financial penalty on 888 Holdings after it found significant weaknesses in the social responsibility measures of the company.
As we have reported earlier, 888 Holdings has suffered a £3.5-million fine for failing to detect some technical issues that led to more than 7,000 customers being able to use their accounts on the company’s bingo platform after taking advantage of their self-exclusion right.
The company was also scolded by the UK Gambling Commission for failing to identify the obvious signs of a certain customer’s gambling addiction which ended up in criminal activity. The online gambling and entertainment operator is to be made to pay an additional amount of £4.25 million to a social responsibility cause, and the money required to be invested in various measures dealing with negative effects of gambling.