Investing in the stock market is a gamble in itself, so it’s interesting to see that businesses who are built on having a flutter are attractive to investors. After online gambling really began to take off in the early 2000s, a mixture of established bookmakers and new boys battled it out to establish themselves in the online gaming market. Fast forward to today and the biggest players such as William Hill, Bet365 and Paddy Power are all household names that have strong stock offerings. One company that is flying particularly high at the moment is 888 Holdings, an online-only group of brands with an interesting back story.
Founded by two Israeli brothers in 1997, 888 Holdings began life as Virtual Holdings Ltd, with registered office in the British Virgin Islands. An administrative move to Gibraltar followed in 2003 and the company was listed on the London Stock Exchange in 2005 with a final valuation of £590 million.
Despite a successful initial public offering, the entire industry felt the pinch when the world financial crisis hit in 2006. A 2007 merge with online rival and physical bookmaker Ladbrokes fizzled out over the introduction of new UK tax laws and fears of legal action from the US government, putting question marks over the future of 888 as an independent organisation. However, increased profits and the acquisition of the bingo business of Globalcom International lifted 888 Holdings in the FTSE250 in 2008.
Fast forward into the 2010s and 888 are growing again, due in part to the increased numbers of mobile gamblers. 888Casino is a leading online casino and the flagship brand responsible for 60% of the group’s revenues, 888poker is second with 18% of the revenues and 888sport 11%, Bingo is last but not least with 10%.
Another huge opportunity is the fact that 888 Holdings own four of the five legal gaming sites in the US. Online gambling made a return to the US in 2015, so these established websites in a potentially huge market are a great opportunity to boost the company’s profile and lift stock prices considerably. This mixed with new launches in Italy and Spain and improved platform offerings in countries like Denmark have made the company an attractive prospect to investors.
Market analysts currently indicate a strong ‘buy’ rating for shares in 888 Holdings. The share value has been at its highest ever, reaching £265GBX per share at the back end of 2016. It seems that biggest increases in share value happen when the company posts strong financial performances, or when takeovers and mergers are being discussed. There is a high likelihood that 888 will continue to increase its brand offerings and certainly aren’t scared to acquire, with a failed attempt at a takeover of European giants Bwin coming out of the woodwork last year. The trend seems to indicate that share prices rise and remain even when discussions are at early stages or even if they don’t happen at all.
Online gambling and particular mobile gaming is established already, but it’s certain that as more territories and markets emerge, the more potential for investment there will be. As 888 Holdings have already demonstrated they can open in new markets successfully, they are certainly one of the best brands at not only cementing their operations but maintaining growth in profit, even in difficult climates.