888 Purchase Costa Bingo
In the latest round of gambling purchases, 888 Holdings added – along with others – Costa Bingo to their extensive online gambling portfolio. The transaction between 888 Holdings and Jackpotjoy covers the sale of Costa Bingo, Sing Bingo, City Bingo and Fancy Bingo for a fee of £18 million.
Two thirds of that figure has been paid up front by 888 Holdings with the remainder due to be paid in the autumn of 2019. In an industry bursting at the seams with profits, £18 million may seem a fairly inconsequential sum of money.
However, this purchase gives us an insight into the machinations of the gambling industry and helps us to plot the future for this rapidly growing industry.
Who are 888 Holdings?
If you’re well versed in the world of online gambling, you will undoubtedly have heard of 888. With annual revenues of £600 million, 888 are clearly big players in gambling.
They are a relatively young company (established in 1997) in comparison to the traditional gambling powerhouses. They were established toward the end of the millennium with an eye on internet gambling and have, as such, focused all of their efforts on the remote sector.
888 have had great success online and quickly became a household name following their establishment. The criminalisation of online gambling in the US significantly stalled the company’s aggressive growth strategy, but they have recovered well since then.
Why have 888 purchased Costa Bingo?
Following the hit to profits that 888 suffered in the wake of online gambling being banned in the US, company bigwigs were forced to rethink their future strategy. Bingo was quickly identified as a key target area for growth.
Whilst most online providers were busy focusing on poker and casino games, 888 spotted the potential in bingo. Once the domain of crowded halls, bingo is now the fastest growing sector in online gambling.
In light of that fact alone, 888’s purchase of Costa Bingo makes sound business sense. Especially so when you consider that 888 have a history of success with online bingo.
The purchase of Wink Bingo
In 2009, 888 purchased Wink Bingo from Daub Ltd for £60 million which signalled their first foray into online bingo. At the time of that purchase, Wink Bingo’s pre-tax profits stood at a meagre £1.3 million.
10 years on and Wink Bingo’s latest pre-tax profits were £24.1 million, highlighting the growing popularity of the online bingo website and the effect of 888’s expertise on the success of the brand.
How did 888 turnaround Wink Bingo’s fortunes?
Following 888’s acquisition of Wink Bingo, the company invested heavily into a revamp of the brand. Middle-aged women were identified as the site’s key demographic and all subsequent designs and advertising campaigns were built with this in mind.
In 2018, the website underwent an extensive overhaul, being designed with a distinctive pop art feel which marketing chiefs believed would appeal to their demographic. 888 also used their industry expertise to revolutionise the technology of the games on the Wink Bingo website.
State of the art technology from Cassava Enterprises was used for the first time and 888’s industry recognised customer support team helped to increase customer loyalty and lifetime transaction values.
So why Costa Bingo?
As mentioned earlier in the article, 888 Holdings are big players in the online gambling industry but they are not the biggest. As such they simply do not have the financial muscle of some of their competitors.
Growth for 888 must be eked out in a different manner, and buying the competition is a tried and tested way of increasing profits. Jackpotjoy’s various bingo sites had punched above their weight and carved out for themselves a place in an incredibly crowded market.
By purchasing Costa Bingo and other sites, 888 not only kill off a competitor but they also take over that competitor’s revenue streams. With the expertise in 888 they will also be confident of vastly increasing the profits of the Jackpotjoy sites as well.
This purchase is just one of the many small steps on the ladder to the top of the online gambling food chain.
What will this purchase mean for punters?