The Commonwealth of Virginia will see another sports betting site pull the plug on its service while the market continues to break record revenue numbers month over month. Virginia will only have 14 online sportsbooks after SI Sportsbook shuts down. The company said it will cease operations on June 3.
“Deposits are disabled,” the company said in a post on the sportsbook. “Please contact support with any questions and concerns.”
888 Strategic Review Main Reason for Shutdown
The SI Sportsbook app was launched under a partnership between U.K.-based 888 Holdings and Authentic Brands Group. The partnership had granted exclusive use of the Sports Illustrated brand for the SI Sportsbook app.
During its development, SI Sportsbook obtained a sports betting license in Colorado, Michigan, and Virginia. The service was the 13th sportsbook to join the thriving Virginia sports betting market. SI Sportsbook went live in the Commonwealth on May 9, 2022.
In March, 888 Holdings, one of the world’s leading betting and gaming companies, announced they had launched a strategic review of its U.S. operations that may see the business be sold or closed altogether. The company also agreed to part ways with Authentic Brands Group and the SI Sportsbook service.
“The group has determined that its current structure will not optimize returns and has initiated a strategic review of the operations,” 888 Holdings said in a press release in March. The review may result in the sale (in whole or in part) of the group’s U.S. business, the controlled exit of U.S. operations, or other possible strategic transactions.
The company said the gross profit margin in the U.S. is lower than the group level, reflecting significant direct costs of operating in the market including duties, market access fees, and license fees, in addition to intense competition from well-capitalized incumbent participants.
“Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings,” said 888 Holdings CEO Per Widerstr?m. “A series of record-breaking months for SI Casino has underscored the strength of the SI brand. However, despite these successes, we have concluded that achieving sufficient scale in the U.S. market to generate positive returns within an accelerated timeframe is unlikely.”
Widerstrom added, “In the U.S., the intensity of competition and requirement for scale means huge investment is required to reach profitability.”
Highly Competitive Market
In Virginia alone, the company’s SI Sportsbook sports wagering app had a 0.12% market share between January 2023 and November 2023. Market leader FanDuel Sportsbook held 40% with DraftKings Sportsbook at 28% for the same period, according to the Virginia Lottery.
SI Sportsbook follows Unibet Sportsbook, WynnBET, and Golden Nugget Oline Gaming (GNOG) in their departure from Virginia and other states.
Unibet left Virginia in April, while WynnBET closed in mid-2023. Both companies are still in the process of closing in other states. Golden Nugget Online Gaming was sold to DraftKings in August 2022.
Fourteen online sportsbooks remain in Virginia: Bally Bet, bet365, BetFred, BetMGM, Betr, BetRivers, Betway, Caesars, DraftKings, ESPN BET, Fanatics, FanDuel, Hard Rock Bet, and Superbook.
Virginia sportsbooks have handled over $14 billion in bets since launching in January 2021.
