Evoke plc, the global gambling company formerly known as 888 Holdings, continues downsizing its US operations to focus on European markets. The group recently shuttered its SI Sportsbook business in Colorado, a deal regarded as the latest step in its strategic retreat from North America. Recent financial results indicate that this decision might have merit, as the company returned to profitability.
Slim Profit Margins in the US Make Operations Unsustainable
The financial implications of this exit are significant. Evoke agreed to pay Authentic Brands an initial $25 million termination fee, with another $25 million by 2029 as part of the shutdown deal. SI Sportsbook had market access in several key US states, including Michigan, New Jersey, and Virginia. However, the high cost of operations and slim profit margins made continued investment unsustainable.
Despite this shutdown of US sportsbook operations, Evoke should still benefit from selling some of its US B2C assets to Hard Rock Digital. While specific details about the assets involved and the terms of the transaction remain undisclosed, the sale should close by the first quarter of 2025. These developments are part of Evoke’s decision to withdraw from the US market and focus more closely on securing its European position.
European Operations Recorded Double-Digit Growth
Evoke’s third-quarter financial results reflect this ongoing paradigm shift. The company’s financials showcased a 3% increase in group revenue, primarily driven by market share gains in its core European markets. The company is well on track with its turnaround strategy, especially in countries like Italy, Denmark, Spain, and Romania, where revenues rose 26% year-on-year.
Evoke’s online business recorded an 8% increase in sales for the three months ending 30 September, marking its first quarter of growth since early 2022. CEO Per Widerström emphasized the company’s confidence in its revamped business model and was optimistic regarding Evoke’s continued momentum for the remainder of 2024 and beyond.
Our online business is a clear growth engine for the group. Double-digit online revenue growth (was) underpinned by our focused market strategy and clearer customer value proposition and segmentation.
Per Widerström, Evoke CEO
The recent financial results mark a positive shift for Evoke, which implemented a turnaround plan in August following a profit warning. Evoke’s rebranding earlier this year was critical to its broader strategy aimed at core markets, streamlining operations, and integrating new technologies into its business model, including automation and artificial intelligence.
We are achieving our plans to improve trading in the short-term while simultaneously radically transforming the group’s capabilities for the long-term.
Per Widerström, Evoke CEO
EVOKE currently operates in 10 European countries and has licenses in six US states. However, with its gradual exit from the US market, the company has signaled that its future growth will mainly happen in Europe, where regulatory environments and market dynamics are more suitable for long-term growth.
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