888 Holdings to sell its Latvian operations for £25m

888 Holdings has agreed to sell its Latvian business for around £25million, as the William Hill owner narrows its focus on its largest territories. 

Paf Consulting, a manufacturer and distributor of gaming consoles based on the Aland Islands in Finland, will buy the division for an estimated €28.25million (£24.6million).

The transaction will involve a £20.9million upfront payment and up to £3.7million in further payouts next year when 2023 financial statements are finalised.

Transaction: William Hill’s owner 888 Holdings has agreed to sell its Latvian business for about £24.6million to Paf Consulting, a manufacturer and distributor of gaming consoles

Completion of the sale is expected sometime in the next few weeks, after the Latvian subsidiary disburses a dividend and is incorporated into Paf’s contracts.

Gibraltar-headquartered 888 said the deal would not affect its ‘ongoing operations and synergy program’ and enables it to prioritise its ‘core and growth markets,’ which include the UK, Spain and Italy.

The takeover will make Paf the third-largest online gambling business in Latvia, where it has been operating for the past five years.

Christer Fahlstedt, chief executive of Paf, remarked: ‘We are thrilled to get the opportunity to continue to build on a great Latvian success story.

‘With a long-term perspective, we are convinced that the Latvian market is moving in the direction of increased player protection and thereby a great strategic fit for Paf.’

888’s emergence into Latvia came following its £1.95billion acquisition of William Hill’s European arm from casino giant Caesars Entertainment last July.

Just before the deal was finalised, William Hill had rebranded Latvian sports betting and internet casino operator 11.lv, having taken control of the firm after acquiring online gambling group Mr Green three years previously.

Lord Mendelsohn, executive chair of 888, said: ‘We continually review our asset base to ensure that we are only holding assets that both contribute to our long-term strategy and will maximise value for our shareholders. 

‘Our relatively limited exposure in the Baltic region means that the region is not one of our core or growth markets where we prioritise our investments.’

888 Holdings shares were 1.3 per cent up at 78p on Monday afternoon but have slumped by almost 60 per cent in the past 12 months.

In 2022, 888 plummeted to a £115.7million pre-tax loss because of debt costs related to the William Hill takeover and total turnover sliding back as loosening Covid-19 restrictions meant people gambled less online.

The group has also been impacted by scandals over failures to institute proper money laundering controls and conduct the necessary checks on new customers, including whether they were at risk of gambling-related harms.

A probe found that one customer was able to make an immediate £100,000 bet, even though this was above his credit limit and a 24-hour period is required between receiving requests for an increase in a credit limit and granting it.

The UK Gambling Commission considered suspending the company’s operating licence over the matter but instead handed out a record £19.2million fine.

This post first appeared on Dailymail.co.uk