Shares in online gambling firm 888 dropped nine per cent today after the company reported a poor opening half to the year in its key UK market.
UK revenues decreased 18 per cent to $86.5m (£65.9m) as the company responded to increased regulation and refocused its marketing to the highest return-generating areas.
The company said it had tightened its anti-money laundering processes and increased customer due diligence and protection. As a result the UK’s share of group revenue dropped from 39 per cent to 32 per cent.
However, overall revenue grew by one per cent in all markets to $273.2m, helped by a 30 per cent rise in regulated markets, excluding the UK. The FTSE 250 company also said it has seen positive revenue trends in the UK since the end of the reporting period.
The company foresees opportunities from the US market. A Supreme Court decision in May has opened a path for US states to regulate online sports betting, with William Hill just one of the UK firms to take advantage.
But 888 warned a move into the country – which could overtake the UK as the world’s largest regulated market – will need investment and could impact short-term profitability.
Itai Frieberger, chief executive of 888, said: “The board continues to believe that 888 is very well positioned for future growth underpinned by our diversification across products and markets, technology leadership and a first-class team.
“Trading during the second half of the financial year to date has been in line with the board’s expectations with average daily revenue excluding the UK six per cent higher year on year, four per cent lower overall and an encouraging nine per cent increase in group new customers acquisition.
“We have several exciting growth opportunities ahead and the board remains confident that the profit outlook for the full year will be in line with market expectations.”