The online gambling business is booming, not just in the United Kingdom, but worldwide. Last financial year the remote sector declared a gross gambling yield of £5.4 billion and held 37.3% of the market share, a 3% increase from the previous financial year. Contributing to this are nearly 350 UK-based online bingo sites. The United Kingdom has had a long-standing love affair with Bingo dating back to the 1960s, when huge purpose-built halls sprung up around the country. Now they are closing down as players move online.
While the land-based bingo halls were dominated by four big names, the online sector is far more diverse. But a recent deal that has seen a large number of sites acquired by 888 Holdings seeks to reduce the competition.
Mergers and acquisitions are commonplace in business, with deals happening every day, all over the world. Sometimes this means a lifeline for a struggling start-up and sometimes it is a move from a global giant to dominate their chosen marketplace. When 888 Holdings announced they were going to acquire Costa Bingo from the JPJ Group, it appeared to those outside the industry that this deal was going to be just that; an attempt to absorb a competitor and their burgeoning business. 888 Holdings have a long-standing history of taking over other online gambling sites, but far from just absorbing them into their current brand, they like to do things differently.
The first bingo company they acquired, back in 2009, was Wink Bingo. The online bingo market was already booming by then, due to the increasing ease with which players could access the internet. As the technology of computers, tablets and smartphones developed, the remote gambling sector strove to keep up, and new websites began popping up all over the place. 888 Holdings ran a prolific advertising campaign for Wink Bingo, eager to make it a popular online bingo site. And it worked, Wink Bingo has nearly one million people signed up to play. The brand underwent a comprehensive makeover in 2015 and again in 2018 to update its look and content but kept all the great competitions and prizes that its customers loved.
Perhaps 888 Holdings believe they can repeat this success with Costa Bingo? Costa, along with several other bingo sites including Wish Bingo and City Bingo, were part of a group of online bingo games previously run by Mandalay Media. They stand apart from other bingo sites in that they have traditionally offered free bingo games with real cash prizes. First purchased by the JPJ group in 2014, they offer an exciting opportunity for 888.
The deal for the Mandalay Media games went through in February and cost 888 Holdings £12 million up front, with a further £6 million to be paid in September 2019. With declared profits from last year of £3.7 million, it’s a good bet that Costa Bingo and its sister games will be showing 888 Holdings a good return on their investment before long.
Before the deal, 888 Holdings already had 9 different Bingo sites running alongside its other online gaming and sports betting websites. These websites brought the company annual revenue of $32.4 million in 2018. Now with the addition of the Mandalay games they have doubled their portfolio and, although this is not going to double their revenue straight away, you can see the direction they are heading in. With a larger share of the market comes a larger share of the profits. And normally, this would mean a worse deal for the customers. But 888 Holdings have worked hard to maintain the differences between their brands, with different themed sites appealing to different potential players. Far from narrowing the field, they are ensuring that the variety continues; by taking the sites into their family they reduce the risk of them disappearing.
And 888 Holdings’ group of brands really are a family. United under their Joy of Bingo network, players can transfer rewards between the different brands, unite in communal chatrooms and play group-wide games with super jackpots, without having to register for each individual site. Whether 888 Holdings seek to induct Costa Bingo into these hallowed halls remains to be seen, and existing customers will have to wait and see what changes – if any – are made to their games. But looking at their history, it seems unlikely that 888 Holdings will want to turn everything over immediately. Especially given their concerns about the state of the United Kingdom’s economy as Brexit looms.
Although they aren’t based in the UK, 888 Holdings have already fallen foul of the United Kingdom’s tightened gambling regulations, and saw a small dip in profits at the end of last year. Their acquisition of Costa Bingo may be an attempt to offset these issues and increase their profits without having to diversify. 888 Holdings have carved a nice little slice for themselves in the online bingo market and they have recognised that the fastest and most efficient way to grow quickly within the industry is to continue to add existing ventures to their portfolio. Costa Bingo was the first bingo purchase of the year, and it probably won’t be the last.