Mattingley says 888 will make US profit by 2014
Brian Mattingley says operator will profit by 2014 through B2B presence in three regulated states with NJ making a meaningful contribution by 2015
888 CEO Brian Mattingley said the firm is aiming to replicate its Spanish success in New Jersey by grabbing significant market share in both poker and casino and would profit from its B2B operations by the end of 2014.
He added 888’s partnerships in all three regulated US states will lead to positive contributions to its bottom line within the first year of launch, but its B2C operations won’t have a meaningful contribution until 2015.
The Gibraltar-licensed firm has B2B deals with Caesars Interactive in Nevada and New Jersey and the state lottery in Delaware, as well as its own B2C site in New Jersey, all of which will be up and running by the end of this month.
And while Mattingley claimed the biggest of those markets “ New Jersey “ was unlikely to mature fast enough to attract positive B2C revenues in 2014, the structure of its software supply deals meant the company would have revenue share income “from day one”.
By 2015, he said, 888 would be receiving “meaningful contributions” from its US operations.
“People think 2014 will be quite an immature year for New Jersey, in the region of $250-300m net revenue market size but rising to about $500m in 2015. We don’t disagree with those kind of numbers,” Mattingley told eGaming Review. “So we hope to get some meaningful contributions in 2015 as those markets mature.”
“I think poker will be a very successful operation for us. It is a national pastime, played widely in every state and it will be a very good product for us because of the way our ecosystem works,” Mattingley said.
“But casino is growing still at double-digit rate in Europe and having our own games studio is a point of difference we have over our competitors [in the US]. I think we’ll end up as we are in Spain “ with good market share in both products.”
Karl Burns, an associate director at investment firm Panmure Gordon, backed 888’s chances of gaining good market share in New Jersey however said the US is unlikely to contribute more than 10% of group operational profits any time soon.
“Only time will tell how profitable the US will be but through its partnership with Caesars in particular we are expecting 888 to have at least 15% market share in New Jersey,” Burns said. “I’d imagine 888 will have a decent level of EBITDA from the US in 2015.”
“It’s tricky to know what value to attribute to the market due to such little visibility. We’ll learn a lot more in the first month of New Jersey’s launch,” Burns added.
You can read the full interview with 888’s chief executive Brian Mattingley in the forthcoming issue of eGaming Review, due out next week.