888 Holdings PLC (LON:888) has agreed to buy BetBright’s sports betting platform for £15mln in a bid to improve its prospects in the global sports betting market.
The FTSE 250 online casino operator said the acquisition would support the long-term development of 888Sport, its own online sports betting portal, as it would allow the company to “fully leverage” marketing and analytics capabilities.
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Following the integration of BetBright’s platform, which was expected to begin “as soon as practically feasible”, 888 said it would aim to “begin a phased and market-by-market rollout of its proprietary sportsbook solution”.
Itai Pazner, 888’s chief executive, said the acquisition gave the company “the missing piece” in its product and technology portfolio and would give the firm ownership over solutions across the four “major online gaming verticals” of casinos, sports, poker, and bingo.
“The BetBright sportsbook has been developed by a fantastic team and is a high quality and scalable platform. Our new colleagues joining from BetBright will significantly strengthen 888's sports betting expertise and industry know-how”, Pazner added.
The acquisition is part of several that have occurred in recent months as the company tries to cement itself at the front of the online gaming market, having paid £18mln for a clutch of brands from online bingo operator JPJ Group PLC (LON:JPJ) in February.
In a note to clients, analysts at broker Peel Hunt expected BetBright to progressively replace Kambi, a B2B sports betting services provider that currently manages 888’s sportsbook, eliminating royalties.
The broker added that running costs for BetBright “should be materially lower” in the medium-term than the royalties paid to Kambi and, more importantly, 888 would have “full control of its sports technology roadmap as it integrates sports more closely with other content and moves into more geographic markets”.
Analysts also cut their underlying earnings (EBITDA) forecasts for 2019 to US$85mln from US$96mln to reflect the costs of the acquisition among other cost pressures.
“Having reviewed, and materially lowered, our forecasts it is clear to us that FY19E is going to be another transition year for 888.”
In early trading Monday, 888 shares were down 1.3% at 177.6p.