FOBT Cuts Prompt 888 Holdings to Purchase Costa Bingo Network

888 Holdings Plc is aiming to dominate the £660 million+ online bingo sector after announcing its acquisition of Jet Media Limited.

888 Holdings online bingo

888 Holdings will expand its online bingo network with the addition of Costa Bingo and its sister sites. (Image: Big Tease Bingo)

Sending out a press release on February 19, 888 Holdings confirmed that an £18 million offer to take over the online bingo network was underway. The transaction will be settled in cash, £12 million of which will be paid on completion of the acquisition, with the final £6 million due in September 2019.

Natural Move for 888 Holdings

As per the terms of the agreement, 888 Holdings will take full control of the online bingo sites owned by Jet, removing them their current parent company, JPJ Group Plc. In practice, this means the operator will own a network of sites that include popular brands such as Costa Bingo and City Bingo.

According to 888 CEO Itai Pazner, the acquisition is a natural move in the current climate. Prior to the deal, Jet had worked with 888 subsidiary Dragonfish.

Essentially forming the backbone of Jet’s online bingo network, Dragonfish has been instrumental in the growth of sites such as Costa Bingo. With foundations already in place, 888 Holdings will now take full control of the assets and expand its own online business.

“The Group continues to deliver its stated strategy of expanding across global regulated markets. This expansion is underpinned by organic growth initiatives supported by exploring value-enhancing mergers and acquisitions,” Pazner said on February 19.

888’s decision to increase its online bingo interests comes at a time when its competitors are looking for ways to offset forthcoming changes to fixed odds betting terminal (FOBT). With the UK government pledging to cut the maximum FOBT stakes from £100 to £2 in April, operators are scrambling diversify.

Race for Online Dominance Prompts Bingo Push

William Hill has already announced that it will close 900 betting shops and increase its online provisions to offset any lost FOBT revenue. With other brands enhancing their casino platforms, 888 Holdings is taking a different route.

Although online bingo only accounts for a small percentage of remote betting revenue, gross gambling yield for all UK online gaming is £5.4 billion. In 2017, the UK Gambling Commission (UKGC) put the number of active online bingo players at 29 million.

For 888 Holdings, this is a market it can take control of. Even though it doesn’t have a presence on UK high streets, the online sector is set to become more competitive in the coming months.

With its sportsbook, poker and casino platforms already well-established, the latest acquisition will give 888 another revenue stream. What’s more, it should improve the company’s USP as its peers look to establish a greater foothold online.

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