Coronavirus Quarantines Helping 888, but CEO Sees Dark Clouds Looming

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The new coronavirus may have stopped 888 Holdings publishing its full-year financials, but the pandemic is increasing activity across its network.

Itai Pazner 888
888 CEO Itai Pazner says online poker is thriving due to coronavirus, but dark clouds could be looming. (Image: PR/CTech)

888, along with all listed businesses in the UK, has delayed the publication of any financials.

Due to what are called “unprecedented practical challenges,” the UK’s Financial Conduct Authority (FCA) put a two-week moratorium on preliminary financial reports.

In lieu of its full-year results, 888 provided a trading update on Tuesday. The report, titled the COVID-19 Trading Update, gives shareholders an overview of the company’s current position.

Decreased Freedom Leads to Increased Activity on 888

Alongside expected updates regarding employee safety, 888 highlighted an upturn for online poker. Although the report doesn’t provide specifics, the latest metrics show “increased customer activity” across 888’s casino and poker sites.

That’s a marked difference to the company’s tone in January. Following a tough 2019 for online poker, CEO Itai Pazner said “challenging” market conditions would be in play this year. However, with coronavirus turning everything upside down, previous negatives have turned into positives.

In fact, online poker is now being touted as a way to offset expected losses elsewhere in the company.

“There is currently evidence of increased customer activity in the Group’s casino and poker products that might, in part, compensate for the sports betting disruption for a period of time,” reads the report.

Despite coronavirus having an impact on live sports, average daily revenue is 18% higher than the same period last year. In the current year-to-date, daily revenue is 24% ahead of last year.

In comparison to many businesses that are suffering due to the coronavirus pandemic, 888 is holding firm. Even with sports betting accounting for 16% of its overall revenue in 2019, short-term spikes for casino and poker could offset future losses.

Calm Before Coronavirus Storm

However, CEO Itai Pazner also urged caution. While the current dynamics may not be catastrophic, he warned this may be the calm before the storm.

“In the event of a prolonged period of global macro-economic uncertainty, it is possible that consumer spending across the Group’s online gaming product verticals may also become impacted,” the report continues.

Online poker operators currently find themselves in a unique position. With people forced to stay inside and other forms of entertainment such as bars and clubs off-limits, people are turning to the internet.

The recent rush for online stimulation has driven increased action across the industry. Over the weekend, PokerStars’ 14th-Anniversary Sunday Million shattered previous records thanks, in part, to coronavirus.

However, if the pandemic keeps people on lockdown for too long, the bubble may burst. Although governments around the world are promising to cover wages to varying degrees, the money won’t last forever.

If people aren’t able to earn, they won’t be willing to spend money on things such as online poker. For now, the outlook is positive, but as Pazner warned 888 shareholders, it may not stay that way.

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