888 Holdings, a major player in the online gambling industry, has announced its decision to exit the New Jersey online gambling market. This move is part of a broader strategic realignment of the company’s business operations. The shutdown will affect both the 888poker and 888casino platforms in New Jersey, with the final day of operations set for June 3, 2024.
Strategic Realignment and Sale of U.S. Assets
The decision to leave New Jersey follows a significant announcement made in February by 888 Holdings. The company revealed plans to sell its U.S. gaming assets to Hard Rock Digital, which is owned by the Seminole Tribe of Florida. This sale aligns with 888’s strategy to focus on other global markets while reducing its footprint in North America. The move is seen as a way to streamline operations and concentrate resources on more profitable regions.
Performance and Market Share in New Jersey
888poker’s performance in New Jersey has been underwhelming. Since January 2024, the platform has contributed only about $47,954, which is approximately 0.006% of the state’s online poker revenue. In March, 888poker held a mere 0.67% share of New Jersey’s online poker market. These figures highlight the challenges the company faced in gaining a significant foothold in the competitive New Jersey market.
Player Advisory and Fund Withdrawals
Players using the 888poker and 888casino platforms are advised to withdraw their funds by June 3. Any remaining balances will be refunded by check in the subsequent months. This advisory ensures that players are not left in the lurch and can retrieve their funds without any issues.
Hard Rock Digital’s Future Plans
Despite acquiring 888’s U.S. assets, Hard Rock Digital does not plan to introduce online poker on its platform in New Jersey. This decision indicates a shift in focus for Hard Rock Digital, which may prioritize other forms of online gambling or different markets altogether.
Historical Context of Online Poker in New Jersey
The exit of 888poker marks the first departure of an online poker operator from New Jersey since September 2014. At that time, Ultimate Poker and Betfair ceased operations linked to Trump-branded casinos in Atlantic City. New Jersey remains one of six states in the U.S. with a legal online poker market, ensuring that players still have options despite 888poker’s exit.
World Series of Poker Continues Operations
While 888 Holdings is exiting the New Jersey market, the World Series of Poker (WSOP) will continue its operations in the state. The tri-state cooperative involving New Jersey, Michigan, and Nevada remains intact. This initiative aims to synchronize player pools for a unified online poker experience, ensuring that players still have access to robust online poker options.
Reasons Behind the Exit
Several factors contributed to 888 Holdings’ decision to exit the U.S. market. The gross profit margin in the U.S. is lower than at the group level, and the company faces significant direct costs, including duties, market access fees, and license fees. Additionally, intense competition from well-capitalized incumbent participants has made it challenging for 888 to achieve sufficient scale to generate positive returns within an accelerated timeframe.
Future Plans for 888 Holdings
Looking ahead, 888 Holdings will explore all potential alternatives that can deliver value for the business. This could include selling its U.S. B2C business, a controlled exit of U.S. B2C operations, or other strategic transactions. The company aims to focus on markets where it can achieve better profitability and growth.
Impact on the U.S. Sports Betting Market
The U.S. sports betting market has been booming since the overturning of a sports betting ban in 2018. Currently, sports betting is legal in some form in 38 states, and online betting is available in 25 jurisdictions. Despite 888 Holdings’ exit, the market continues to grow, with Americans having gambled more than $245 billion since legalization. In 2022, over 25 million people engaged in sports betting in the U.S., and this figure is forecasted to increase by 47% by 2025.
Conclusion
The exit of 888 Holdings from the New Jersey online gambling market marks a significant shift in the company’s strategy. By focusing on more profitable global markets and reducing its North American footprint, 888 aims to streamline its operations and achieve better financial performance. While this move may disappoint some players, the continued presence of the WSOP and other online poker options ensures that New Jersey’s online gambling market remains robust.
