A closer look: 888

Although the casino and poker focused firm has not seen as rapid growth in mobile as its sportsbook rivals, 888 is rapidly catching up and now has a product suite to rival anyone

With its core focus on casino and poker it’s no real surprise to see 888 lagging behind its sportsbook-driven rivals in terms of mobile revenues. In 2012 the firm reported that just 11% of total revenues were derived from the mobile channel, but after a heavy investment into both product and marketing that figure trebled to around 30% during 2013. And with the battle for mobile casino now heating up, it has thrown down the gauntlet to its egaming rivals.

888’s most recent full-year results, reported in February this year, demonstrated how far the operator had come on mobile. CEO Brian Mattingley said during the results disclosure that the firm had focused “significant resources and investment” into developing its mobile products throughout 2013, resulting in an increase in mobile metrics across the board.

New apps were launched across iOS and Android for both poker and casino verticals, while an entirely new bingo product was said to have gained good customer traction despite Mattingley having voiced his concern for the future of the vertical over the year. Mobile was also at the centre of its continued strong performance in poker.

And the firm continues to invest in the platform as the gaming verticals are finally beginning to show signs of growth on mobile in the core Western European markets. “In our core platform, we invest a lot and continue to enhance more capabilities specifically on mobile side. We’ve been launching mobile applications, I think every month there’s a new platform coming out,” 888 COO Itai Frieberger said in the firms’s Q2 2014 analyst call.

Central to this investment had been the introduction of HTML5-powered apps for mobile devices. This allowed the firm to produce an increasing number of apps with “significantly reduced effort” required, while also allowing the firm to target as many devices as possible with just the one development project.

Research and development costs incurred by the operator reached $31m in 2013, up 15% year-on-year with 888 attributing this rise largely down to work on its mobile platforms, with Mattingley referring to mobile as an “engine of growth” that had enjoyed “rapid rates of adoption” throughout the year.

Revenue and new depositors on mobile increasingly “significantly” throughout the year. The vertical to benefit mostly from this rise was casino, which saw revenue jump 15% year-on-year to $190.4m, however with a fully-loaded mobile product suite now up and running there is every expectation that mobile will continue to grow across the board.

Push the product

Although it has shown impressive growth in poker during the past four years, the largest component of 888’s revenue remain in casino. The 888casino app has been continually updated since its launch in December 2012, with six updates during 2013 adding a number of in-house and third-party games. It was one of the first real-money casino apps to introduce push notifications in August last year, and live dealer games were added in November.

The app helped drive 15% growth in casino revenues in Q2 2014, with further growth expected in mobile during the latter half of the year following a major app update in August. Version 2.0 saw a number of new in-house games added as well as an improved user interface with games just a single click from the home screen and smart intuitive touch controls. It’s now arguably one of the best apps on the market.

Mobile casino is now a hugely competitive sector in the UK, Spain and Italy and the firm is expected to continue to upgrade its apps for both smartphone and tablet as we enter into Autumn. William Hill said mobile gaming revenues had peaked at 28% in H1 on the back of a major marketing drive, and Spain, where 888 is the leading casino operator, showed strong signs of mobile growth. Mobile casino is an area where 888 are keen to establish a dominant position and the firm is expected to maintain investment to retain market share.

888’s second-largest contributor to revenues is poker and one that has seen strong growth in mobile as 888 has adapted its product to the platform. An emphasis has been placed on fast-fold cash games and sit-and-go tournaments and  casino games have been added to the app in the hope of keeping users in the app and cross-selling them into more lucrative verticals. Mobile’s popularity, Mattingley says, has only given further weight to 888’s poker performance. “Mobile devices are ideally suited to the preferences and playing habits of our target recreational players,” he said.

Bingo bonanza

888’s third core revenue stream is from bingo, which returned to growth in Q2 2014 with a 17% year-on-year rise in revenues. The firm differs from many operators in the sense that it also maintains an established B2B presence with its Dragonfish bingo network, which is used by bwin.party and Costa Bingo. One of 888’s own bingo brands Wink Bingo was one of the first to launch a mobile app on the Dragonfish network in September last year, followed by Tasty Bingo and Posh Bingo launched in May and August 2014 respectively.

888’s own-name brands – 888bingo and 888ladies – were relaunched on mobile towards the end of last year as part of an effort to reinvigorate declining revenues in the vertical. The new 888ladies app launched in December 2013 with more of a focus on the vertical’s community aspect with more social features than ever before.

Smartphone and tablet-dedicated versions of the app were launched and side slot games were also introduced, designed to keep players entertained while waiting for bingo rooms to open and start. The improvements to the re-launched product have been well received, with Mattingley confirming the new mobile product to have demonstrated “tremendous growth” in active players and depositing players.

App, tap, bet

A newer area of focus from 888 is Sportsbook, following a deal struck with Kambi to provide desktop and mobile products last year. But it’s one the firm is placing increasing importance on. An emphasis has been placed on live, in-play betting and 888 has its own cash-out equivalent to challenge the likes of bet365 and Betfair. Streaming is also a prominent feature on the sports app, particularly with regards to its horse racing content provided by At The Races..

The operator made its newly launched 888Sport app the focal point of an advertising drive during last year’s English Premier League football season. The ‘Bet You Can’ campaign was launched in December 2013 across multiple channels and promoted the mobile offering with a £5 “no lose” bet on the mobile app and the strapline ‘App, Tap, Bet’, suggesting just how easy it was to bet on the app.

888 senior vice president Itai Pazner said at the time that the campaign celebrated the firm aligning sports betting “with the rest of our offering” after “being at the forefront of mobile gaming across the world”. Mobile has played a prominent role in adverts for the operator’s other products before the ‘App, Tap, Bet’ campaign first aired ten months ago. Campaigns for 888’s poker products have advertised the ability to play poker on the move on both smartphone and tablet devices and 888casino’s ‘Changing the Game’ campaign also demonstrated the availability of the operator’s iOS and Android apps.

Advertising spots for 888ladies have continued to promote the community aspect by featuring players playing and socialising through the apps on public transport, but one trick used extensively by the firm’s other verticals is the use of famous brand ambassadors to differentiate themselves from competitors.

Australian cricketer Shane Warne has become the face of 888poker in the UK. And Uruguay and Barcelona footballer Luis Suarez may have followed in the same path in Spain had it not been for his bite on Italian footballer Giorgio Chiellini in this summer’s World Cup, which forced the operator to terminate its relationship with the player after an internal review.

Building for the future

But whoever is fronting it there is no doubt 888 is planning a big push for its mobile gaming products in the latter half of the year both in the UK and the crucial growth markets of Spain and Italy. It has developed the mobile product portfolio to a point where it is punching its weight and can compete with any of its big-spending rivals. And unlike Hills, Paddys and Ladbrokes it is not fighting a cross selling war, with its casino products well integrated on its poker and bingo apps already.

In some ways the fate of 888 on mobile will be a microcosm of the success of the sector. The product set is strong, and the mix of CRM and acquisition marketing it has perfected over the past two years makes it something of a test case for how well gaming can perform on mobile and if it can prove as incremental as it has in sports betting.

Speaking after the firm’s most recent results disclosure in August this year, Mattingley noted that mobile has continued to grow in importance for the firm. At the and of 2012 approximately 11% of total UK revenues was attributable to mobile devices, however at the end of 2013 that stood at 30%. “They [bingo and casino] seem to be really good products for mobile and it really is great,” Mattingley said.

What’s more is 888’s mobile presence appears to be having a lasting effect on the business, with around 40% of first-time depositors now coming from mobile channels and life-time value of such customers soaring. “We’ve still got a long way to go, a lot more products to release and a lot more growth to see from mobile technology,” Mattingley said. “I believe that 30% has assisted greatly in UK growth therefore if you can translate that into becoming more active in Italy and Spain that will also grow those markets.”

The competition shows no signs of slowing down in any of those markets, however, as the big sportsbook firms turn their attentions to boosting gaming revenues and new entrants with a mobile-first approach such as LeoVegas make their mark. 888’s challenge for the next twelve months is translating its impressive online momentum into mobile and that will demand no let up in investment. It has the product set, and marketing nous, to succeed, but the competition is going to keep snapping at its heels.