888 Holdings and Authentic Brands Group (ABG), the parent company of Sports Illustrated (SI), have launched a new SI-branded sportsbook in Colorado, just in time for this year’s NFL season.
Under an agreement agreement announced on June 24, the UK’s 888 gained exclusive rights to SI’s digital channels, magazine and associated brands for sports betting and iGaming through its deal with ABG.
The agreement also sets SI Sportsbook as 888’s primary sports betting brand. The addition of an SI sportsbook significantly helps 888’s brand position as it looks to increase its footprint in the US.
888 CEO Itai Pazner said the partnership with ABG “gives us an incredibly powerful platform to build our US position, without incurring all of the costs of building a brand in the US. This strategy allows us to invest much more selectively and effectively in the US, with a clear focus on using SI’s brand footprint and positioning to acquire customers more effectively, and to build a profitable business over time.”
According to a joint presentation by SI and 888 outlining the terms of the JV, the SI brand license agreement includes sports betting, casino and poker in the US, with an option for Canada.
The 888-SI presentation adds that “B2C operations will be under both the SI and 888 brands” in Colorado and three other states: Indiana, Iowa and New Jersey.
Meanwhile, the agreement gave ABS an undisclosed licensing fee and a 4.9% stake in the JV. ABS has the option to acquire an additional 5% stake in the JV for $15 million and an additional 5% for another $25 million. Further options could see ABS ultimately increase its ownership to 19.9%.
888, in its official report for H1 2021, said the SI Sportsbook would “go live in Colorado this month, with further launches planned in the coming months.” The eventual launch of SI Sportsbook in Indiana, Iowa and New Jersey were specifically mentioned in a press release issued on behalf of 888 announcing the sportsbook’s launch in Colorado.
During a H1 2021 earnings call, Pazner said “the plan going forward is to roll out all the other markets that we already have licenses in — New Jersey, Indiana and Iowa — for SI.” He added that 888 is also working on acquiring additional state licenses, with plans to launch in 12 to 15 states in the next three years. “I think we made good progress this year on that roll out plan.”
Peel Hunt analysts were “bullish about the Sports Illustrated deal” and projected that 888’s earnings from the ABS partnership would increase going into 2022, according to a report Wednesday by the Financial Times.
But the launch of SI Sportsbook could complicate efforts to create an ESPN-branded sportsbook, which the sports network suggested last month.
ESPN estimates a deal could be worth more than $3 billion, but some analysts question whether such a deal is economical. In comparison, the 888-ABS agreement is valued at $10 billion and can be renewed for up to 20 years.
