SI Sportsbook will soon be no more, following 888’s decision to unwind the operation less than 30 months after launching in partnership with Sports Illustrated owner Authentic Brands Group. 888 announced the news in a U.K. filing Wednesday morning.
SI Sportsbook, live in Colorado, Virginia and Michigan, is expected to be shut down over the next six to 18 months.
In the corporate release, 888 committed to exploring a sale of all or part of its U.S. consumer business, which also includes 888casino in New Jersey, as well as “the controlled exit of U.S. B2C operations or other possible strategic transactions.”
London Stock Exchange-listed 888 Holdings’ share price is down roughly 80% from the date of that September 2021 launch, following a $2.9 billion acquisition of William Hill’s non-U.S. assets and a series of management changes. Per Widerström took over as CEO in October. In 2023, 888’s non-U.K. revenues declined 16%.
“In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability,” Widerström said in a statement. “A series of record-breaking months for SI Casino has underscored the strength of the SI brand. However, despite these successes, we have concluded that achieving sufficient scale in the U.S. market to generate positive returns within an accelerated time frame is unlikely.”
According to the filing, 888 will pay Authentic a $50 million breakup fee split into two payments. As originally signed, the SI Sportsbook deal was set to run for up to 20 years, featuring an upfront licensing fee as well as a chance for Authentic to acquire up to 20% of 888’s consumer-facing U.S. business.
Now, according to an Authentic executive familiar with the company’s plans but not given permission to discuss them publicly, Authentic will embrace a “Gambling 2.0” strategy, attempting to distribute Sports Illustrated content on a non-exclusive basis to other sportsbook operators.
The strategy shift represents a response to a new era in American sports betting, with a few dominant companies overseeing a large portion of wagers.
Based on results where SI Sportsbook was available, Authentic believes the company’s brand and content will be valuable to providers looking to increase user loyalty and betting activity. Content partnerships, such as DraftKings’ new tie-up with Barstool Sports or FanDuel’s relationship with Spotify’s The Ringer brand, continue to be key pieces of major sportsbooks’ differentiation strategies.
Gambling-related royalties currently represent approximately 10% of Authentic’s SI-connected revenues, which itself makes up a small portion of the company’s licensing empire. In its editorial licensing deal with Arena Group Holdings, Authentic set up a carve-out allowing it to capitalize betting content, while incentivizing the publisher to create such stories.
Authentic is now in the process of negotiating new terms, either with Arena or another party, as active conversations continue. Uncertainty around the brand has only compounded since Arena failed to make a $3.8 million payment to Authentic and laid off SI staffers in January. It’s possible those terms could involve a change to the future publisher’s role in betting content production and/or sales relationships.
The outrage that followed January’s news in some ways proved the continued appreciation that fans still have for SI’s 70-year-old brand. Still, growth for its publishing arm remains a challenge, especially if SI’s publisher does not see the financial benefits generated from the brand’s other business lines. Increased revenue from betting-related content has the potential to offer one such path.