888 Holdings PLC Annual Report & Accounts 2022

ANNUAL

REPORT

AND

ACCOUNTS

2022

888 HOLDINGS IS ONE OF THE WORLD’S LEADING BETTING

AND GAMING COMPANIES AND OWNS AND OPERATES A

RANGE OF INTERNATIONALLY RENOWNED BRANDS INCLUDING

WILLIAM HILL, 888, MR GREEN AND SI SPORTSBOOK.

OUR

PURPOSE

OUR

MISSION

TO ENTERTAIN AND EXCITE CUSTOMERS WITH THE BEST

GAMBLINGEXPERIENCE IN THE WORLD.

Read more on page 4

CONTENTS

STRATEGIC REPORT

01 Highlights 2022

02 At a Glance

04 Strategic Roadmap

05 Investment Case

06 Chair’s Statement

12 Business Model

14 Strategic Overview

24 Key Enablers

24 Product and content

leadership

26 World class brands

27 Customer excellence

28 KPIs

32 Stakeholder Engagement

34 Sustainability

36 Players

40 People

44 Planet

46 TCFD Overview

48 CFO’s Report

56 Risk Management

67 Viability Statement

68 Task Force on Climate-related

Financial Disclosures

(TCFD)Report

GOVERNANCE

90 Board of Directors

92 Corporate Governance

Report

98 Nominations Committee

100 ESG Committee

102 Audit Committee

108 Remuneration Committee

111 Directors’ Remuneration

Report

126 Directors’ Report

FINANCIAL STATEMENTS

134 Independent Auditor’s

Report

145 Consolidated Income

Statement

146 Consolidated Statement

ofComprehensive Income

147 Consolidated Statement

ofFinancial Position

148 Consolidated Statement

ofChanges in Equity

149 Consolidated Statement of

Cash Flows

150 Notes to the Consolidated

Financial Statements

200 Company Balance Sheet

201 Company Statement

ofChanges in Equity

202 Company Statement

ofCashFlows

203 Notes to the Company

Financial Statements

205 Shareholder Information

205 Company Information

1,239

712

2022

2021

Reported Revenue £m

£1,239m +74%

2021: £712m

EBITDA £m

£116m +29%

2021: £90m

Average monthly players (millions)

1.6m +1%

2021: 1.6m

Pro forma Revenue £m

£1,850m -3%

2021: £1,907m

Pro forma Adjusted EBITDA £m

£311m +15%

2021: £270m

1,850

1,907

2022

2021

116

2022

2021

311

270

2022

2021

1.6

2022

2021

To see full details of our KPIs please go to page 28

888 Holdings PLC Annual Report & Accounts 2022 01

STRATEGIC REPORT

* EBITDA is defined as earnings before interest, tax, depreciation and amortisation.

Adjusted EBITDA is defined as EBITDA excluding share based payment

charges, foreign exchange losses and exceptional items and other defined

adjustments. Further detail on exceptional items and adjusted measures is

provided in note 3 to the financial statements.

Pro forma metrics, which are unaudited, reflect the results as if 888 had

owned William Hill for eachof the periods and excludes the results of the

888 Bingo business forall periods.

Highlights

2022

AT A GLANCE

A global leader with

world class brands

A RANGE OF LEADING BRANDS

DIVERSIFIED REVENUE BY PRODUCT (PRO FORMA)

AT A GLANCE

Read more on page 50



Gaming

52%

Retail

28%

Betting

20%

888 HOLDINGS IS ONE OF THE WORLD’S LEADING BETTING

AND GAMING COMPANIES.

In 2022, the Group acquired the international (non-US) business of William Hill to create one of the

world’s leading global betting and gaming operators. Incorporated in Gibraltar and headquartered

inthe UK, the Group operates from offices worldwide and employs over 11,000 people globally.

The Group owns and operates internationally renowned brands, including William Hill, 888casino,

888poker, 888sport, and Mr Green. Inaddition, the Group operates the SISportsbook and SI Casino

brands in the US in partnership with Authentic Brands Group.

The Group’s operations are split into Retail, UK Online and International Online, all of which house world-

class brands, and offer leadingproducts to excite and engage our customers.

1. Pro forma numbers, which are unaudited, reflect the results as

if888 had owned William Hill for the entire period, and exclude

the bingo business.

888 Holdings PLC Annual Report & Accounts 202202

STRATEGIC REPORT

OUR LOCALLY LICENSED OPERATIONS AND OFFICES

UK&I International

ONLINE

Our sports betting and gaming brands

are some of the most popular in the

UK&I market. William Hill and 888casino

are our flagship brands here, offering

market leading products to millions of

customers every month.

Revenue / Pro forma

revenue

£456m / £717m

Pro forma average

monthly actives

1.1m

RETAIL

Our William Hill retail estate has been

a permanent fixture on the UK high

street for over 50 years. We now have

a portfolio of 1,386 shops offering

exciting betting and gaming products

to millions of customers all across the

UK, complementing our online offering.

Revenue / Pro forma

revenue

£256m / £519m

Number of Licensed

Betting Offices at Dec-22

1,386

ONLINE

We serve customers in over 100

countries worldwide using our range

of world-class brands, with a primary

focus on our other core markets of

Italy and Spain, together with exciting

growth markets such as Canada,

Denmark and Germany.

Revenue / Pro forma

revenue

£508m / £614m

Pro forma average

monthly actives

0.5m

1. UK

2. Gibraltar

3. Ireland

4. Jersey

5. Germany

6. Romania

7. Spain

8. Italy

9. Denmark

10. Malta

11. Sweden

12. Portugal

13. Latvia

14. Colombia

15. Canada (Ontario)

US:

16. Nevada

17. Delaware

18. New Jersey

19. Colorado

20. Pennsylvania

21. Virginia

22. Michigan

1. Bulgaria

2. Ceuta

3. Colombia

4. Gibraltar

5. India

6. Ireland

7. Israel

8. Latvia

9. Malta

10. Philippines

11. Poland

12. Romania

13. UK

14. US

Locally licenced markets:

Offices:

OUR OPERATING DIVISIONS

1. Pro forma numbers, which are unaudited, reflect the results as if888 had owned William Hill for the entire period, and exclude the bingo business.

STRATEGIC REPORT

03888 Holdings PLC Annual Report & Accounts 2022

LEVERAGING OUR FUNDAMENTAL STRENGTHS AND ADDRESSING

OURCHALLENGES HEAD ON WITH SWIFT ACTIONS AND A CLEAR PLAN,

ASWE SET THE PLATFORM FOR FUTURE SUCCESS

Realising our potential

STRATEGIC ROADMAP

Our updated strategic roadmap is based around three phases:

• Position (2022): A newly combined business with world-class brands and

market-leading positions across some of the most attractive betting and

gaming markets globally. However, we operate across multiple platforms

and teams, with brands that are often competing against each other,

leading to profit margins lower than industry peers. Additionally, financial

leverage is significantly above our mid-term target of 3x.

• Plan (2023-2025): With clear strategic priorities of integration and

market focus, we will create a more scalable and efficient business model,

operating at higher profit margins and focused on select markets where

our combination of high-quality products, exceptional brands, and proven

operating capabilities provide strong potential for success. A highly

disciplined capital allocation plan will target net debt / EBITDA of less than

3.5x by end of 2025.

• Potential (2025+): With a powerful platform for future growth, scaled

business operations, and a robust and defensible suite of competitive

advantages, we will be well positioned to deliver strong, long-term, and

sustainable growth.

Across the leadership team

we have completely clear

focus on what we must deliver

in terms of our integration,

deleveraging, andensuring we

are relentless in our pursuit of

unlocking the huge potential

from this combination.

Lord Mendelsohn

Executive Chair

GOAL

Grow EPS & Deleverage

Disciplined capital allocation and

more streamlined and profitable

business to generate strong returns

Read more on page 34

888 Holdings PLC Annual Report & Accounts 202204

STRATEGIC REPORT

OUR POSITION – PLAN – POTENTIAL STRATEGIC ROADMAP WILL

CREATE THE PLATFORM FOR THE NEXT DECADE OF GROWTH,

DELIVERINGHIGH RETURN ON EQUITY

POSITION

Newly combined business

High leverage

Low EBITDA margins

PLAN

Grow EPS and deleverage through

clear strategic priorities

POTENTIAL

A global-leader with high growth

potential and attractive upside

potential for equity holders

Potential

INVESTMENT CASE

Integrate

Businesses and

realise synergies

Pro forma revenue

>£2bn

Revenue growth

+1p

per 1ppt

Focus on a smaller

number of the most

attractive markets

globally in order to

deliver our revenue

growth plans

Adjusted

EBITDA Margin

+3p

per 1ppt

Clear levers to drive

higher margins,

including synergies,

optimisation of

operations and brand

strategy, and increased

focus on key markets

Debt reduction

+2p

per £100m repaid

Capital allocation

model will prioritise

debt reduction with

a clear plan to reach

3x leverage

Debt

optimisation

+3p

per 100 bps

Some flexibility in the

debt structure enabling

the Group to capture

the future benefits of

deleveraging

Adjusted EBITDA Margin

>23%

Leverage

<3.5X

Adjusted EPS

>35p

Focus

On select markets

and key growth

opportunities

Invest

In our sources

of sustainable

competitive

advantage

Support

Sustainable growth

through Players

People Planet

foundation

Prioritise

Debt reduction

through ruthless

focus on capital

efficiency

2025 FINANCIAL TARGETS

CLEAR DRIVERS OF POTENTIAL EPS GROWTH

STRATEGIC REPORT

05888 Holdings PLC Annual Report & Accounts 2022

INTRODUCTION

2022 was a landmark year for the

Group. The transformational acquisition

of William Hill, which completed in

July for a revised total consideration

of £1.95bn, was a bold step that

sets the Group on a clear course

to becoming a global leader in our

industry. The enlarged Group will benefit

from significantly increased scale,

greater revenue diversification, and an

increased proportion of regulated and

taxed revenues underpinned by stronger

positions across our core markets of the

UK, Italy, and Spain.

For more than 25 years, 888 has grown

and developed as a technology-led

gaming business. It has built a world-

class and scalable global technology

platform alongside outstanding digital

marketing and data capabilities.

Additionally, 888 is one of the leading

online casino brands in the world.

Ontheother hand, William Hill is a

bookmaker by DNA, with an iconic

brand thatisinstantly recognised across

the UK, supported by a top-class retail

estate. The highly complementary

nature of these two businesses was

reinforced by thematerially increased

synergy target of £150m we disclosed

towards the end of the year. Throughout

this Annual Report we outline in detail

the significant benefits and value

creation opportunities that will be

delivered through the combination

of these two highly complementary

businesses, as well as update on the

positive early progress made in the

integration process.

As well as completing the acquisition of

William Hill, we also completed the sale

of our bingo business in July 2022. The

bingo business operated on a separate

platform and added operational and

technical complexity to the Group, so

the strategic disposal came at the

right time for us to renew our focus

on our core B2C betting and gaming

products, and direct investment toward

our goal of a building a scalable single

global platform. We thank our valued

bingo colleagues for their contributions

to the 888 business over several years,

and wish them well for the future.

Whilst 2022 was a year of significant

strategic progress, the trading

backdrop undoubtedly presented

several challenges for the Group and

indeed our wider industry. Global

macroeconomic conditions – in

particular following Russia’s invasion

of Ukraine in February 2022 – shifted

considerably. As a result, both the

Group and its customers faced high

rates of inflation and higher interest

rates. Asan entertainment business,

we are mindful of the potential impact

of these cost-of-living pressures on

our players.

Notably, since the acquisition of William

Hill, the Group is now more exposed

to the effect of higher interest rates

due to its current high levels of debt.

The ultimate structure of the William

Hill acquisition resulted in the Group’s

net debt being higher than had been

anticipated when the acquisition

was initially announced in 2021. As a

result, the Group was more exposed

to material changes in interest rates

in the year, which in turn impacted

its ability to reinvest excess cash

flow intoaccelerating growth in the

short term.

Meanwhile, overall market growth

rates across the Group’s key online

markets moderated during the year.

At the outset of the global COVID-19

pandemic in 2020, consumers around

WE ARE FOCUSED ON BUILDING ON OUR FUNDAMENTAL STRENGTHS

AND REALISING THE STRONG POTENTIAL FROM THE WILLIAM HILL

ACQUISITION ASWELOOK TO BECOME A GLOBAL LEADER

As a newly combined business

we have signiﬁcant scope for

improving our operating model

and delivering efﬁciencies.

Overthe next two years

we plan to fully integrate

our business – creating a

bigger, stronger and better

organisation with higher proﬁt

margins. We are focused

on building a customer-led

business with a portfolio of

world class brands that provide

complementary offerings,

supporting our ambitions to

drive market share growth in

some of the most attractive

betting and gaming markets in

the world. This will be enabled

by a scalable, uniﬁed proprietary

technology stack that will

underpin our product and

content leadership focus.

Lord Jon Mendelsohn

Executive Chair

2022 was a

transformational year

CHAIR’S STATEMENT

888 Holdings PLC Annual Report & Accounts 202206

STRATEGIC REPORT

£150m

Expected synergies from the

WilliamHill acquisition

~£20bn

Total addressable market of

ourcore and growth markets

>35p

2025 Adjusted Earnings

PerSharetarget

the world pivoted quickly towards

e-commerce and digital forms of

entertainment. This in turn drove

significantly higher growth rates for

the Group over the course of 2020

and 2021 compared towhat had been

previously achieved. Aspandemic-

related social restrictions have eased,

growth rates in our online business

have moderated, albeit with customer

activity remaining higher than pre-

pandemic levels.

Against this dynamic and testing

backdrop, I would like to thank

everyone across the enlarged business

for their continued commitment

during the year. The Group has made

very positive early progress with the

integration process, including raising

its synergy targets materially and

setting out a clear strategic roadmap

towards ambitious financial targets

for 2025. The Group has a clear

plan to maximise the value creation

opportunity from combining these

two world-class businesses and the

Board remains highly confident that

this will underpin sustained growth

andshareholder value creation over

the medium and long term.

BOARD FOCUS AREAS

As a Board, our role is to represent

our shareholders and broader

stakeholders, and to ensure that we

are holding management to account

to deliver long-term, sustainable,

shareholder value creation. To this

end, the Board has three key priorities.

The first is to ensure that the Group

executes a successful integration, and

the Board is confident that the Group

is taking the right actions to create a

more streamlined, more profitable, and

more nimble business going forward.

The Board’s second key focus is on

building and reinforcing the teams

across the Group. We significantly

strengthened the operational

management team during the year

with a broad and diverse range of

talent from the William Hill team, as

well as several important external hires.

The Board’s third focus is to ensure

that management is always thinking

about the long-term direction of the

business. As part of this, the Board

builds ESG and sustainability into

all itsplanning, whether that is by

ensuring that the Group does the right

thing by its players by maintaining

strong safer gambling standards, or

by providing a great workplace for its

people, or by doing its bit to support

the environment and fight the climate

emergency. Ledby the Board’s ESG

Committee, the Board has full oversight

of the Group’s ESG strategy, targets,

and progress. Further information on

the Group’s ESG activities during the

year can be found on pages 34-45.

888 Holdings PLC Annual Report & Accounts 2022 07

STRATEGIC REPORT

CHAIR’S STATEMENT CONTINUED

BOARD CHANGES

Following the completion of the

acquisition of William Hill, in July 2022 we

were pleased to strengthen the Board

of Directors with the appointments of

Andrea Gisle Joosen and Andria Vidler

as Independent Non-Executive Directors,

and Ori Shaked as a Non-Executive

Director. Eachnew Board member has

brought extensive and highly relevant

skills and experience to the business that

I know will continue to be of significant

benefit to the Group as it delivers its

long-term strategic objectives.

Following the year end the Group

announced further directorate changes

with regard to executive directors,

which are discussed in more detail in

the post year end developments later

in this statement.

CLEAR STRATEGIC ROADMAP:

POSITION-PLAN-POTENTIAL

The Group’s strategic roadmap over

the coming years is firmly focused on

unlocking the significant potential from

the combination of 888 and William

Hill. However, to do this we must first

acknowledge and address the key

challenges that come with our current

position as a newly combined Group.

Firstly, we recognise that our debt levels

are high, and furthermore the cost of our

debt is higher than we had anticipated

due to material changes in interest

rates and debt market conditions

since the initial announcement of the

deal in 2021. Asa result, we are currently

restricted when it comes to reinvesting

excess cash flow into accelerating near

term growth. Accordingly, we know

that deleveraging must be a key priority

for the Group, and we have set ourselves

a clear target of reducing our net debt

to EBITDA ratio from 5.6x at the end of

the Period to below 3.5x by the

end of 2025.

We also have a combination of three

main platforms across 888, William Hill

and Mr Green and in some markets,

our brands are directly competing

against each other. This fragmented

approach and duplicate operating

and technology structure means our

margins are lower than peers and

that’s something that we must change.

We have a clear plan to address

these challenges and to achieve our

potential as a more profitable business

that is sustainably positioned for

the next decade of growth. Central

to this plan is our refined strategic

framework with two clear strategic

priorities: integration and market focus.

Thesepriorities are underpinned by

our focus on continually developing our

three key strategic enablers: product

and content leadership, world class

brands, and customer excellence.

Strategic priority 1: Integration

The first of our strategic priorities is

to deliver a successful integration

programme.

During the second half of the year,

following completion of the acquisition,

we immediately began working hard on

our technology migration programme.

We analysed every aspect of the

enlarged Group’s different product

platforms and took the swift decision

to use 888’s technology as the

Group’s core platform going forward.

We also identified certain market-

leading components from William Hill’s

technology that we will incorporate

into the core platform. These include

William Hill’s global trading and retail

technology platforms.

I am pleased to report that we are

making good progress with our

technology integration, with Mr Green

launched in Germany on our core

platform. The next stage is migrating

Mr Green in Sweden on to the 888

platform in the coming months, which

will be the first major milestone for the

technology integration program as we

aim to deliver our platform of the future

over the next few years.

Not only will our platform of the future

deliver a significant cost advantage

to the Group, but we also believe

there is an important revenue upside

opportunity as we bring together our

best-in-class product and content

from across betting and gaming.

Oneexample of this is within our sports

offering, where William Hill currently

provides over 50,000 more in-play

football markets each year than

888sport. We are confident that by

expanding the range of betting options

at 888sport and SI Sportsbook we will

drive higher customer engagement

and revenue. Similarly, 888 has a

world-class games development

studio, Section8, which creates some of

the most successful 888casino content.

We are on track to be able to offer

this content to both William Hill and

Mr Green customers across various

markets in 2023.

Strategic priority 2: Market focus

The second of our strategic priorities

is ensuring that we have a very clear

focus on the key market opportunities

for the Group that will deliver superior

returns on investment.

This process categorises each of

the Group’s geographic markets

into one of four market archetypes.

Firstly, our core markets of the UK,

Italy, and Spain. Cumulatively these

countries represented around 70%

of the Group’s online revenue in 2022

and offer a total addressable market

of more than £10 billion. These are all

markets with tightening regulations

and rising barriers to entry, and where

we believe the Group can further build

market share by strengthening our

key competitive advantages. During

the year the Group made significant

investments in proactive safer

gambling measures in the UK, which

we believe positions us well ahead of

the anticipated white paper on UK

gambling regulation. Coupled with

the tough comparative period that

was aided by COVID related digital

migration, these factors led to a 20%

year-over-year decline in UK online

revenues across the Group. Welook

forward to the white paper and

subsequent level playing field that it

should bring to the UK market, and are

confident that our leading brands and

sustainable recreational customer base

will see us succeed in this market.

Our second market archetype is

our growth markets, which includes

Denmark, Germany, Ireland, Ontario

in Canada, and the USA. These are

regulated but less mature markets for

the Group where we believe we can

grow significantly through disrupting

and building on the strong initial

positions we have developed, or

by taking advantage of our unique

customer propositions. Across this

group of markets our focus is on rapid

growth, which will be achieved by

reinvesting all underlying profitability

generated across this cohort of

markets back into the most attractive

growth opportunities. Over time, as

we grow our share in these markets,

our intention is that some of these will

become additional core markets for

the Group where we will then aim to

consolidate market leading positions

and drive profitability. During the year

we launched the SI Sportsbook brand

in Virginia and Michigan in the US and

launched 888 under a local licence in

Ontario, Canada, further successfully

bolstering the Group’s growth market

portfolio. Early in 2023 we launched

newly licensed offerings with SI casino in

Michigan and Mr Green in Germany as

we further support our growth markets.

Thirdly, we have our optimise markets.

The Group currently offers its products

across a huge range of global markets

888 Holdings PLC Annual Report & Accounts 202208

STRATEGIC REPORT

and, as we have a global and scalable

platform, we can do this profitably

and successfully in both regulated

and offshore markets. Our optimise

markets are ones where either the

market opportunity is not compelling,

or where we do not currently see an

opportunity to be one of the dominant

players in that market. As a result, our

focus is on providing our products to

customers in the most cost-efficient,

profitable manner.

Finally, we have our pipeline markets.

These are regions or countries

where there is an attractive growth

opportunity, but where we need a

different model to unlock the potential

opportunity. Agreat example of this

is in Africa, where during the year we

launched ajoint venture, 888AFRICA, to

operate 888 brands in online betting

and gaming markets across selected

regulated markets in Africa. We were

pleased to report that Tanzania,

Zambia, Mozambique and Kenya

all successfully launched during the

second half of the year, in time for

theFIFA World Cup, and we have seen

some very positive early momentum.

The Group has a minority stake in

888AFRICA, with the option to increase

this to take control and ultimately own

up to 100% of the venture in the future.

KEY STRATEGIC ENABLERS

The Group’s market share gains will

be underpinned by our sources of

sustainable competitive advantage,

which act as strategic enablers.

Theseare product and content

leadership, world-class brands

andcustomer excellence.

Product and content leadership

888’s proprietary technology across

all products provides a clear strategic

advantage against our competitors

and enables complete flexibility over

the user experience. Our focus on clear

product development principles allows

us to offer best-in-class products,

differentiated content and AI-powered

personalisation. Read more about our

progress this year on page 24.

World-class brands

The Group owns and operates some

of the most recognised betting and

gaming brands in our core and growth

markets, including William Hill, 888, and

Mr Green. We harness the power of

our world-renowned brands, together

with our highly effective, automated,

and flexible data-driven marketing

machine, to acquire, retain and

engage customers in a unique way.

Read more about our progress this

year on page 26.

Customer excellence

Understanding customer needs and

building our product, marketing, and

offers to create the best experiences

possible is critical to our growth plans.

A key part of our relentless focus on

customer experience is delivering

quickand effective customer service.

Weare investing in this area all the

time and through integration will be

able to improve customer experience

even more. Read more about our

progress this year on page 27.

CRITICAL STRATEGIC

FOUNDATIONS

We know that without getting the

following three critical strategic

foundations right, we will not be able

tosucceed in executing on our vision

forthe combined Group.

888 Holdings PLC Annual Report & Accounts 2022 09

STRATEGIC REPORT

CHAIR’S STATEMENT CONTINUED

CRITICAL STRATEGIC

FOUNDATIONS CONTINUED

People and culture

Nurturing the right corporate culture

and building the right team will be

central to our future success. This

starts with our strong executive team,

which comprises the best leadership

talent from across 888 and William Hill

as well as some important new hires

who joined the business during the

Period. These include Harinder Gill,

the Group’s new Chief Risk Officer, and

Anna Barsby, our new Chief Product

and Technology Officer.

As we progress further through the

integration process, we are focused

on building a strong team culture that

brings together the best attributes

of both businesses and ensures

that the sum of these great, historic

businesses creates a combination that

is stronger together. A powerful, agile,

engaged, and unified team culture is

critical to this.

Player safety

The second of our critical strategic

foundations is player safety. We strive

to build seamless customer journeys

that enable players to easily track and

limit their spending, while also enabling

us as the operator to intervene when

there is a risk of harm. By doing this,

we will create an even more trusted

relationship with our players, who in

turn know that they can enjoy their

betting and gaming with us in a safe

and sustainable manner.

Over recent years, we have made

important progress in the critical area

of safer gambling. This includes making

significant investments in our team and

technology, which are central to our

plans to continue to reduce the risks

related to player safety. The Group’s

risk and compliance team, led by

Harinder Gill, has more than doubled

in size in the last three years to almost

400 employees and is now one of our

largest departments.

One of our key goals is to make

safer gambling a normal part of

the customer experience. This

is why we are pleased to report

an 8.5 percentage point year on

year increase in the number of the

Group’splayers with safer gambling

limits in place, with over 45% of

our global customers now utilising

limits to help ensure both a safer

and moreentertaining betting and

gamingenvironment.

When it comes to safer gambling, we

know that we are on a journey of

continual improvement, and we

acknowledge that the Group has not

always got this right. We know that we

must strive to do better and, in the year

ahead, we are focused on enhancing

the Group’s overall approach to risk

management, improving core processes,

integrating teams, and aligning the

slightly different safer gambling

approaches that exist across our

different platforms.

Planet

The Group acknowledges that the

urgency and importance of the climate

crisis requires everyone to play their

part, and we continue to build on the

progress we have made in this area.

2022 has been a year of transition

for the group, as we work to combine

the 888 and William Hill businesses.

Our carbon footprint has expanded

following the William Hill acquisition,

but we have continued to evolve both

in understanding our climate impact

and working to address our carbon

footprint. We have continued to make

progress in delivering on our climate

goals and have been rewarded with

improved ratings from various key ESG

ratings bodies. In 2022 we retained

membership of the FTSE4Good Index

as well as achieved much improved

scores in the CDP rating, achieving a

B- rating up from a previous rating of F.

In early 2023 we achieved a CSA rating

of 34, up from our prior year score of

26, an above average score for our

sector. I am pleased with progress

in this area but there is more to do

in order for us to continue to ensure

we are supporting the global fight

against climate change You can read

more about our progress this year

on page 44.

POST YEAR-END

DEVELOPMENTS

Directorate Changes

After the year-end the Group

announced that Itai Pazner, Chief

Executive Officer and Executive

Director, was leaving office as CEO and

as a Director with immediate effect on

30th January 2023. On behalf of the

Board, I would like to thank Itai for his

significant contributions to the business

over more than 20 years, including the

last four as CEO. Itai has played a very

important role in building a business

with powerful proprietary technology

and has overseen successful early

stages to the William Hill integration

process. We wish him well in his

futureendeavours.

Since that date, I have assumed the

role of Interim Executive Chairman

while the Board searches for a

permanent CEO. In this role I have

assumed the responsibilities of the

CEO and am fully focused on actively

driving the business forward and

leading our team to deliver our clear

strategic plans. Across the leadership

team we have completely clear focus

on what we must deliver in terms of

our integration, deleveraging, and

888 Holdings PLC Annual Report & Accounts 202210

STRATEGIC REPORT

ensuring we are relentless in our pursuit

of driving market share gains inour

key markets.

Also in January 2023 we announced

that Yariv Dafna, the Group’s CFO

would leave the business at the end of

2023. On behalf of the Board, I would

like to thank Yariv for his significant

input to 888’s progress in recent years

and we look forward to his continued

contributions to the Board during the

remainder of the year.

We have a very strong operational

management team in place, and

a Board priority right now is the

appointment of a permanent CEO.

Wehave been pleased with the depth

and calibre of the candidates that

we are engaging with and are making

good progress with our search.

We are absolutely committed to

appointing a CEO that will lead the

team to deliver the potential of this

business. The focus of the board is

therefore on making the right selection,

rather than just making a quick selection.

Compliance and safer gambling

We have invested significantly in our

compliance team, with the drive for

higher standards headed by our new

Chief Risk Officer, Harinder Gill, who

joined the Group last summer. The

compliance team has new personnel,

procedures and policies and are

charged with the mission to drive

higher standards across all areas of

risk and safer gambling and, as a

Board and leadership team, we are all

fully committed to this.

In late January, our internal team

identified failures where our

safer gambling policies were not

being effectively applied. Further

investigations identified similar

accounts which were later confirmed

to be a broader issue within a specific

cohort of players, namely our VIPs in

the Middle East. The Board once fully

briefed took the prudent decision to

suspend all of these accounts while

the compliance team investigated the

situation further.

Whilst this was a very disappointing

development, I am pleased with how

the business responded and that we

have been able to quickly remedy

the failings. Furthermore, I am highly

confident that our policies and

procedures are robust, and this failure

was isolated to a very specific cohort

of players. We have found no further

issues and do not anticipate any

further actions here. I am also pleased

to say that we have successfully

started reopening accounts and

revenues in the region are beginning

to recover.

On the 28th March 2023 the GB

Gambling Commission (“GBGC”)

announced a £19m regulatory

settlement in lieu of a financial penalty

had been reached with William Hill

in relation to historic player safety

failings.

The failings occurred before we owned

William Hill, so we could have had

no bearing on the areas that were

investigated. However, the team had

already taken significant remedial

action, and we have further reinforced

this following the acquisition. As a

result, the business is now in a far

stronger position from a compliance

perspective, and with the improvement

actions having already been taken, the

announcement of the settlement has

no further impact on our operations or

revenue expectations in the UK.

These historic failings are not

acceptable to me or the Board, and

the entire Group shares the GBGC’s

commitment to improve compliance

standards across the industry. We will

continue to work collaboratively with

the regulator and other stakeholders

toachieve this.

UK Gambling Act Review

We continue to await the outcome of a

review of the Gambling Act, which could

potentially lead to major changes in UK

regulation, albeit the extent and timing

of any potential changes remains

unclear. We have continued to take

proactive steps during 2022 to increase

the level of safer gambling interventions,

including lowering thresholds for

intervention and stepping up affordability

checks, as well as lowering the max

stake limits on our slots. We believe all

of this positions the business well for

any future changes through the

whitepaper and any associated

consultations that will likely follow.

OUTLOOK

Whilst – as outlined above – the Group

faces some near-term challenges with

our debt position and cost of debt,

I am confident in our clear strategic

plan to create shareholder value and

achieve our exciting potential. Over

the coming years the Group’s absolute

focus will be on delivering our synergy

targets, deleveraging, and delivering

a successful integration process that

creates a highly efficient, unified

business model.

At our Capital Markets Day towards the

end of 2022, the Group outlined four key

financial targets for FY25 which the

Board is confident will underpin strong

shareholder returns. These are as follows:

• Revenue of more than £2bn

reflecting our refined strategic focus

on a smaller number of key markets;

• Adjusted EBITDA margin of more

than 23%, up from 17% in the Period,

which will be driven by a successful

integration programme;

• Leverage of less than 3.5x,

down from 5.6x at the end of the

Period, which will be driven by an

extremely disciplined approach to

capital allocation, with a focus on

deleveraging; and

• Adjusted earnings per share of more

than 35p, reflecting the strength and

benefits of the combined Group.

The management team continues to

make very good progress with the

integration and synergy programme.

Whilst there is still much work to be

done, we are pleased with what has

been achieved so far, from critical

early decisions taken around the

technology platform and migration

plan, to defining our market focus and

bringing the teams together to execute

on this. Our new operating model

has been rolled out and the Board is

pleased with how all our colleagues

arenow working together to achieve

our common goals. The Board is

confident that this progress will support

a superior EBITDA margin for the Group

in 2023 compared to 2022.

Whilst there remain several well-

known macroeconomic and industry

challenges as outlined above,

the Board is confident that the

combination with William Hill will unlock

significant potential for the enlarged

Group and all its stakeholders.

Thiswillbe underpinned by its superior

technology, talent, brands, scale,

andmore diversified revenue streams.

Your Board and executive leadership

team will continue to ensure that the

Group remains resolutely focused on

enhancing long-term value creation

for shareholders and we look forward

making further progress in the

year ahead.

Lord Mendelsohn

Executive Chair

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 11

STRATEGIC REPORT

BETTING

Traditional bookmaking where we make a margin from

bets placed by customers on the outcome of events.

Given the variance and unpredictability in sporting

results, this can be volatile in the short term.

HOW WE GENERATE REVENUE

GROSS GAMING REVENUE

Less: free bets and promotions

REVENUE

Less: cost of sales

GROSS PROFIT

Less: marketing costs

CONTRIBUTION

Less: other operating costs

EBITDA

BUSINESS MODEL

A model for growth

GAMING

Games of chance such as online casino, slots, and

machine gaming terminals involving customers playing

against the house, where we generate a margin.

In poker, players play against each other and we

charge a commission from each hand or entry fees

fortournaments.

WINNINGS

RECYCLED

CUSTOMER

DEPOSITS

CUSTOMER

PLAYS

Winnings

withdrawn

New funds

/deposits

GROSS GAMING REVENUE

RETURN TO

PLAYER

888 Holdings PLC Annual Report & Accounts 202212

STRATEGIC REPORT

HOW WE ENABLE GROWTH

PRODUCT

AND CONTENT

LEADERSHIP

Read more on

page 24

CUSTOMER

EXCELLENCE

Read more on

page 27

WORLD-CLASS

BRANDS

Read more on

page 26

PEOPLE,

PLAYERS,

PLANET

Read more on

page 34

THE VALUE WE CREATE

Taxes

£588m

Betting and gaming duties,

VAT, corporate tax and

employee taxes

Sport contributions

£114m

Levies, sponsorship

andpicture payments

Industry

£6.4m

Voluntary contributions

toresearch, education

andtreatment of gambling

related harm

Employees

Employee net promoter score

across all our colleagues

* All of the metrics above are given on a

proforma basis as if 888 had owned William

Hill for the full year

STRATEGIC REPORT

13888 Holdings PLC Annual Report & Accounts 2022

Clear strategic

priorities

OUR UPDATED STRATEGIC

ROADMAP SEEKS TO BUILD ON

OUR FUNDAMENTAL STRENGTHS

WITH A CLEAR PLAN, ENABLING

THE GROUP TO REALISE ITS

STRONG POTENTIAL...

POSITION

Fragmented business operations

Multiple tech platforms

Duplicate functions

PLAN

Streamlined and efficient

operating model

Single unified tech stack

Player + people focus

POTENTIAL

Improved profitability

Market leading customer experience

Platform for future growth

STRATEGIC OVERVIEW

STRATEGIC REPORT

888 Holdings PLC Annual Report & Accounts 202214

...WITH CLEAR STRATEGIC PRIORITIES AS WE BUILD A GLOBAL LEADER

INTEGRATE

businesses and

realise synergies

CULTIVATE

unified team,

collaborative

work culture

OPTIMISE

cash flow from global

markets leveraging

scale

INVEST

to build leading

positions in

growth markets

SCALE

core markets,

improving

market share

& margins

DELIVER

DELEVER

CREATE

a streamlined

operating model

and unified, global

tech stack

STRATEGIC REPORT

15888 Holdings PLC Annual Report & Accounts 2022

Integration

WE ARE FOCUSED ON DELIVERING VALUE THROUGH SYNERGIES

Through the successful integration

of William Hill and 888, we will create

a global industry leader with world

class brands, scalable technology,

and premier betting and gaming

content for our customers. Soon after

bringing the two businesses together,

we identified further opportunities for

synergies, and materially increased

our cost synergy target from the

original £100m to approximately

£150m. As well as increasing the

target, we also accelerated the

timeline for delivery and now expect

to achieve approximately £87 million

of EBITDA synergies in 2023 (previous

expectations of £54m).

The increased synergy opportunity

reinforces the highly attractive

strategic rationale for bringing the two

complementary 888 and William Hill

businesses together. The integration

process will create a much larger

business that leverages a single,

unified technology stack and a wide

range of global functions, including

customer services, payments, and

digital marketing. The Board believes

the streamlined operating model will

create an even stronger, higher margin

business with scalability and significant

further growth potential.

The management team’s clear focus

is on delivering a smooth integration

process and creating an enlarged

Group that is bigger, better, and

stronger together.

WE WILL LEVERAGE 888’S

WORLD-CLASS TECHNOLOGY

At 888, we have a long and

established history of developing

our own technology and have spent

years building one of the strongest

proprietary platforms in the sector that

has successfully scaled across almost

20 regulated markets.

As a result, we made an early decision

to use 888’s technology as the Group’s

single technology platform moving

forward. We will benefit from the

platform’s proven capabilities and will

continue to evolve it by incorporating

market leading components from

William Hill’s technology, particularly

in relation to trading capabilities

and retail.

As we migrate all our brands on to

our future platform over the coming

years, we will deliver two clear benefits.

Firstly, there will be a significant cost

advantage, as we will no longer run

parallel platforms. Secondly, we believe

there will be an important revenue

opportunity as we combine best-in-

class product and content across both

betting and gaming.

To support in the execution of our

technology migration, we were

delighted to recruit Anna Barsby as

the Group’s new Chief Product and

Technology Officer towards the end

of the year. Anna has significant

experience with complex technology

integrations and migration projects

and is closely overseeing the first major

technology migration of Mr. Green in

Sweden on to the core platform, which

we expect to complete during 2023.

As we got into the details of

the integration, we uncovered

further opportunities for

savings, and increased our

cost synergy target, from

the original £100 million to

approximately £150 million.

Elena Chambers

Chief Operations Officer

OUR INTEGRATION

PROGRAMME IS CENTRED

AROUND FIVE CLEAR

GUIDINGPRINCIPLES:

We have established our

executive leadership team early,

providing clear targets and

accountability for delivery

We will not compromise on

ourcompliance and regulatory

requirements throughout the

integration process

We will deliver cost synergies

assoon as possible

We are clearly prioritising

integration projects, while

seeking to minimise disruption

tobusiness as usual growth

We are focused on identifying

and retaining the best talent

across the enlarged business

STRATEGIC OVERVIEW CONTINUED

888 Holdings PLC Annual Report & Accounts 202216

STRATEGIC REPORT

Integration: creating opportunities

Mark Skinner

Chief People Officer

provides actionable insight so we can

make changes in real time to really

make our employees voices heard. We

immediately set about rolling this out

across the 888 business as well, and

the executive teams are also holding

listening sessions and acting on the

regular feedback our colleagues

areproviding.

Employee engagement is critical for us,

and our employee net promoter score is

one of our group OKRs. Thereis always

more to do on employee engagement,

butit remains a key focus as we deliver

onour plans.

What stage of the integration program

are we at from a people perspective?

A/ Any integration process naturally

creates uncertainty for people, so

providing early clarity was critical.

Following completion in July we

quickly rolled out the first stage of the

organisational design, with the executive

and operational management teams in

place from day one. By November we

had confirmed all the direct reports to

the executive team.

Following further changes to our wider

macro and market environment in

the second half of 2022 we took the

decision to accelerate the synergy

delivery program, including making

the decision to use 888’s proprietary

technology as the future platform for

the group. This led to certain changes

from a people perspective, and meant

we had to make tough decisions and

say goodbye to a number of valued

colleagues.

In early 2023 we rolled out the second

phase of the organisational design, with

clearer reporting lines around

country

focused functions, rather than the

legacy

product and brand approach of 888.

Along with the rollout of a combined

Group-wide reward and performance

structure for 2023 this means we are

now in a strong position from a people

perspective, and while change is never

easy, we now have clarity around how

each of our colleagues will be driving

ourstrategy forward.

Q/ What are the key focus areas

for the people team as you go

throughintegration?

A/ People are critical to everything we

do and putting our thousands of

colleagues at the heart of the decision-

making process is key to ensuring a

successful integration. Our work has

centred around four key areas, being

change management, engagement,

organisational culture, and building out

our future people strategy.

Listening to and acting on feedback

from our colleagues is vital as we

progress through integration, and we

are using our listening sessions and

regular colleague surveys to ensure we

are addressing any concerns.

Find out more about what we have

been doing in the people section on

pages 40-43.

Q/ What is your approach to culture

andvalues within the newly

combinedbusiness?

A/ Prior to the combination both 888 and

William Hill had strong and distinctive

employment cultures, and it’s important

we don’t lose sight of what made each

business successful in its own right.

We also have a really diverse range

of cultures across our office locations

around the world and it’s equally

important not to lose this local sense

ofbelonging.

Our priority for shaping the culture

of the new business is to draw on

the strengths of both organisations,

maintaining and nurturing the values

and behaviours which made them great

places to work, while at the same time

ensuring we are guided by a core set

of values or principles that form the

foundations of our overall culture as a

newbusiness.

We have conducted comprehensive

culture reviews and held various

workshops and group sessions across

the business. Through 2023 our objective

is to roll out a common set of values

to bring together the best of both

organisations, and then really focus

on ensuring the business is living these

values.

Q/ What are your longer term

peopleambitions?

A/ Our people are critical to our future –

building a diverse and inclusive team,

with great growth potential and high

engagement underpins our plans to

execute at pace, and build a bigger,

stronger and better business.

We have set an ambitious 2025 people

strategy centred on being the best

place to work in the industry, where

people want to join and love to stay,

with a strong identity that sets the

standard for what great looks like.

To do this we will be focused on defining

our culture and empowering colleagues,

adding skills and capabilities to the

team so we can achieve our goals, and

ensuring we celebrate our differences

with a diverse and inclusive environment.

You can read more about our plans on

pages 40-43.

Q&A

Q/ How do you keep employees engaged

through the integration process?

A/ One of the key aims right from day one

was to be as proactive as possible with

communication around the integration,

sharing key messages, introducing

teams to each other, and being as

transparent as we can around the

future plans. An example of what we’ve

done here is a global ‘all offices’ virtual

gathering on day one with all of the

executives in our offices

hosting a round

the world gettogether.

Understanding employee sentiment

and measuring engagement is also

critical at a time like this, particularly

in a hybrid work environment where

it’s sometimes harder to get a feel for

the office buzz. We used a Workday

tool called Peakon in William Hill for

the last few years which is a monthly

survey of all colleagues where we

can tailor questions and get a real

understanding of what is going well

and where there are any concerns. This

888 Holdings PLC Annual Report & Accounts 2022 17

STRATEGIC REPORT

One of the key drivers of our

future is building the right

corporate culture and creating

an environment that motivates

and engages our colleagues

with a diverse and inclusive

team. This is particularly

important as we embark on

anintegration journey, that

canoften lead to nervousness

and uncertainty among our

people, but also creates

exciting opportunities.

Mark Skinner

Chief People Officer

WE ARE WELL POSITIONED TO TAKE

ADVANTAGE OF INDUSTRY TRENDS

An effective strategy relies on reacting to, and positioning

our business to benefit from, changing external

circumstances. We face into a wide range of major

drivers in our industry, but we believe the four most

important ones are:

Market focus

1. REGULATORY CHANGE

4. ENVIRONMENTAL, SOCIAL,

ANDGOVERNANCE

3. CHANNEL SHIFTS AND

INCREASINGMATURITY

2. M&A

In the context of our business, where

we have huge global capabilities and

can deliver our products and brands

almost anywhere, strategy is all about

helping our business leaders drive focus

so we can maximise our long-term

value creation.

Vaughan Lewis

Chief Strategy Officer

STRATEGIC OVERVIEW CONTINUED

Compared to 10 and 20 years ago, regulation within

our industry is almost unrecognisable. Regulatory

tightening is raising standards, and also raising

the barriers to entry, making it more and more

challenging to compete. Thiscanbenefit operators

like us with established market leading positions

and brands.

The industry is consolidating rapidly, but it is still

highly fragmented relative to more mature industries.

We have seenthe significant benefits of M&A

across the sector over the years, and we have a

clear plan in place to deliver thebenefits ofour

transformational M&A.

In our biggest marketthe UK, nearly 60% of gambling

is online already, sothe market is maturing and

growth will be slower. Intheless developed markets,

there is still huge growth potential and positioning our

business to take advantage ofboth trends is critical.

Customers, regulators and broader society are more

engaged with safer gambling than ever before.

Our people need clear growth and development

plans and a diverse and inclusive workplace. We

are a global business and want to contribute to the

communities we are part of. It is also crucial that we

play our part inaddressing the climate crisis and

ensure we are minimising our impact on the planet.

888 Holdings PLC Annual Report & Accounts 202218

STRATEGIC REPORT

WE OPERATE IN A LARGE AND GROWING MARKET

Source: H2 Gambling Capital

£78bn

estimated online gambling market

size in 2022

Global gambling market size £bn

2018 2019 2020 2021 2022 2023 2024 2025 2026

£40.2bn

15.8

24.3

£45.3bn

17.7

27.6

£56.2bn

22.4

33.8

£70.6bn

27.0

43.6

£78.2bn

29.8

48.4

£86.8bn

33.0

53.8

£99.3bn

39.4

59.9

£112.9bn

47.3

65.6

£123.1bn

51.1

72.1

Betting Gaming

A global growth opportunity

H2 Gambling Capital estimates that

the total addressable market for

online betting and gaming (excluding

lotteries) was £78 billion in gross

gaming revenue in 2022, having grown

at a CAGR of 18% from 2018-2022.

The industry benefits from powerful

structural growth drivers, including

digital migration from land-based

gambling, ongoing improvements in

technology, increasing internet and

mobile penetration, and the regulation

of online betting and gaming, such

that H2 estimates the addressable

market will grow at a CAGR of 12% from

2022-2026.

In 2022 H2 estimates that circa 28% of

all gambling was done online, reflecting

a significant acceleration in digital

migration driven by government policy

responses to the COVID-19 pandemic,

in particular lockdowns around the

globe. While most countries reverted

back to normal operating conditions in

2022, including the reopening of retail

gambling venues, this step change in

digital adoption has largely remained,

with customer activity online remaining

elevated, and the COVID-19 unwind

effect on revenue largely relating

to reductions in spend per head as

customers spread their leisure spend

across a wider range of activities.

Despite the recent acceleration in

digital adoption, there remains a long

runway of growth ahead, and our

business is well positioned within the

most attractive end markets to take

advantage of these trends.

888 Holdings PLC Annual Report & Accounts 2022 19

STRATEGIC REPORT

Market focus means that we

are spending our time, our

team’s time and our resources

on the opportunities where we

have the greatest chance of

success, and where we can

deliver the strongest long-

term returns.

Vaughan Lewis

Chief Strategy Officer

STRATEGIC OVERVIEW CONTINUED

A focus on locally

regulated markets

Our strategic focus is on regulated

markets, as these represent the best

opportunity for sustainable growth.

We support the development of

local regulatory regimes across our

markets, as regulation typically drives

better outcomes for customers, for the

business, and for wider stakeholders.

Locally regulated or taxed markets

represented 87% of online revenue

in 2022, and 90% of total group

including retail.

Overleaf we discuss our market focus

framework, but with all of our core and

growth markets being locally regulated

markets, together with the continued

adoption of local regulatory regimes

in some of our dotcom markets, we

expect the percentage of revenue

coming from locally regulated markets

should continue to increase. Post the

year end we suspended activities of

the VIP segment of customers in our

Middle East markets following the

discovery that best practices were

not being followed with regard to our

internal policies and processes for KYC

and AML documentation. Following

these changes, only approximately 8%

of revenue now comes from markets

served by our multi-jurisdictional point

of supply licences, with no individual

offshore market greater than 2% of

revenue. We believe this increases

the sustainability of the business,

while at the same time enabling us to

benefit from the scale advantages of

our platform to provide our services

globally and drive incremental

cashflow.

Regulatory update

Across our key markets there were

several regulatory developments during

2022, including:

UK: In June 2022 the Gambling

Commission updated its consumer

protection guidance for online

operators to cover additional

information on a range of areas

including the identification

of vulnerable customers and

indicators of harm.

In October 2022 new rules on

advertising came into effect that

prohibit the use of celebrities who are

likely to appeal to under 18s.

We continue to await the outcome

of a review of the Gambling Act,

which could potentially lead to major

changes in UK regulation, albeit the

extent and timing of any potential

changes remains unclear. We have

continued to take proactive steps

during 2022 to increase the level of

safer gambling interventions, including

lowering thresholds for intervention and

stepping up affordability checks, as

well as lowering the max stake limits on

our slots. We believe all of this positions

the business well for any future

changes through the white paper and

any associated consultations that will

likely follow.

Source: H2 Gambling Capital

We are present in seven of the top 10 regulated or regulating markets, the majority of which have a long runway of potential growth from further online migration.

GGR market size of top 10 regulated markets or regulating markets

12%

58%

28%

41%

27%

30%

51%

82%

19%

£12,486m

£2,428m

£6,577m

£2,299m

£1,406m

£1,052m

£3,856m

£4,962m

£2,592m

£1,368m

United States

Germany

United Kingdom

Canada

Sweden

Spain

Italy

Australia

France

Netherlands

888/WH present

Online as %

total gambling

888 Holdings PLC Annual Report & Accounts 202220

STRATEGIC REPORT

Italy: In October 2022 a range of new

sports betting regulations that apply

to sports outside of horse racing

were enacted including a reduction

in the minimum stake from €2 to €1,

an increase in maximum winnings

from €10k to €50k, permitting cash-

out and draw no bet options for

bettors, and permitting odds to three

decimal places.

Spain: While no major changes took

place during 2022, the market could be

subject to significant changes in 2023

following the potential introduction of

the new Royal decree on Responsible

Gambling, which will amend the

Gambling Law of 2011, and is expected

to be approved in H1 2023. New

requirements are set to be introduced

for operators to implement robust

policies and processes for detecting

problem gambling and ensure timely

prevention of gambling related harm.

Ireland: In December 2022 the

government published the Gambling

Regulation Bill. The key focus of the

new legislation will be the creation

of a new regulator and enhanced

player protection, through the

introduction of restrictions on stakes,

payment methods, self-imposed

limits, advertising, sponsorships and

promotions.

Germany: A new German gambling

regulator, Glücksspielbehörde (GGL),

gained enforcement powers from 1

July 2022 and assumed full regulatory

authority from 1 January 2023. In early

2023 the Group received its gaming

(poker + slots) licence from the GGL

and launched the Mr Green brand

under this licence in March 2023.

Canada: The Group obtained a licence

in the newly regulated Canadian

province of Ontario in March 2022,

launching its services on the day

licensed operations were permitted

(4 April 2022). It is still uncertain if

additional online licensing will be

introduced locally by other Canadian

provinces.

The US: We obtained local licences

and launched SI Sportsbook in

Virginia and Michigan during 2022

and launched SI Casino in Michigan

in early 2023. The US business is also

in the process of bidding to extend

its operation as the sole technology

provider to the Delaware lottery.

888 Holdings PLC Annual Report & Accounts 2022 21

STRATEGIC REPORT

WE HAVE A CLEAR MARKET FOCUS FRAMEWORK

Our clear market focus framework is

a critical component of our corporate

strategy. It helps us to identify the

markets where we have the greatest

chance of success, and where we

believe we can deliver the strongest

long-term returns. Across all of our

target markets, we plan to increase

share by leveraging the Group’s

investments in its key competitive

advantages, namely product and

content leadership, world class brands

and customer excellence.

We have a really disciplined data-led

approach to ensure we spend our time

and our money in the right markets.

Wecall it our market consideration

framework, and we use itto group all

our countries into four archetypes.

Core markets

The UK, Italy and Spain – these make

up around 70% of our online revenues.

The market size across these three

markets is £10 billion, and we already

have over 10% market share. Here we

are focused on building our market

share by delivering and strengthening

our competitive advantages. These are

all markets with tightening regulations

and rising barriers to entry, and

where our position and plan deliver

ussustainable market leading positions

in highly attractive markets.

Growth markets

Ontario, Denmark, Germany, Ireland

and the US – these make up about

10% of our online revenues. These are

all regulated markets, but are less

mature than our core markets, and we

have the opportunity to grow rapidly

and build on our strong initial positions.

Our focus is on growth here, so we will

reinvest all our underlying profits into

growth, and operate this group at

around breakeven at a contribution

level, targeting 5-10% market share.

Optimise markets

As we have a global and scalable

platform, we can offer our products in

a huge range of markets profitably in

both regulated and offshore markets.

But these are markets where either

the opportunity is not compelling, or

our assets don’t currently give us the

chance to be a top-3 player. Ourmain

focus in these markets is to provide our

products in a cost efficient manner,

and reap the benefits of our scalable

business.

Pipeline markets

There is a long pipeline of exciting future

growth markets. These are markets or

regions where there is an attractive

growth opportunity, but where we

need a different model to unlock this

opportunity. The best example of

this is888AFRICA, which is covered

on page 23.

All of our core, growth and pipeline

markets are locally regulated

markets, and this drives our

long-termsustainable plans.

Our growth markets will become our

core markets of the future, with high

and sustainable profits.

And in our optimise group, all the

countries are essentially competing to

become a growth market and receive

increased focus and investment from

the group.

% OF FY22 ONLINE REVENUE

MARKET GROWTH CAGR (22-26)*

GROWTH FOCUS

TOTAL MARKET SIZE (2022)*

TARGET MARKET SHARE

PROFIT FOCUS

~10%

£9.2bn

11.5%

5-10%+

GROWTH

N/A

PIPELINECORE

~70%

£10.4bn

3.5%

10-15%+

~20%

£59.8bn

13.7%

<5%

OPTIMISE

STRATEGIC OVERVIEW CONTINUED

* Source: H2 Gambling Capital (GGR)

888 Holdings PLC Annual Report & Accounts 202222

STRATEGIC REPORT

CASE STUDY PIPELINE MARKETS: 888AFRICA

Delivering a lower capital-

intensive route to potentially

large value creation

888AFRICA JOINT VENTURE

Africa is a region that has very attractive growth potential,

but one where we didn’t have the assets and capabilities to

maximise our chance of success.

To address this, and to take advantage of this strong market

opportunity, we created a new entity in 888AFRICA where

we partnered with a highly experienced and entrepreneurial

team, which is focused on driving growth in this region.

Currently we own just under 20% of the business with an

option to eventually own 100%.

RAPID PROGRESS AND STRONG EARLY

PERFORMANCE

Having set up the business in March 2022, we went live in

four regulated countries (Tanzania, Zambia, Mozambique,

and Kenya) by September 2022, and we are delighted with

the early signs of progress in the first few months, seeing

exponential growth in both actives and stakes.

The key to this is our focus on localisation; delivering

product, promotions and offers that truly resonate

with betting audiences, and doing it in an authentic

way, delivered by local teams in Tanzania, Kenya and

Mozambique.

For instance, the Dabo Dabo promotion gives players the

opportunity to win things like motorbikes and TVs – there are

prize draws for this on local TV, and this builds our brand

awareness and trust.

Another example is our World Cup campaigns, which used

insights and competitive data from each of our markets to

build our brand awareness through low-cost, high reach

local channels.

It is still early days, but we have entertained over 500,000

players already, and we are really confident that we will

build leading positions in our target countries, which will

deliver strong shareholder value.

>£1bn

estimated total addressable market

from our initial 4markets

1. Regulus Partners

20%

four current markets set to grow

~20% CAGR through to 2026

STRATEGIC REPORT

23888 Holdings PLC Annual Report & Accounts 2022

KEY ENABLERS

Product and

contentleadership

THE BEST OF BOTH BUSINESSES

THE BEST OF BOTH

BUSINESSES

888 is a gaming business by DNA

and is widely recognised as one of, if

not the, premier online casino brand

in the world. William Hill on the other

hand is a bookmaker by DNA, with a

world class sports betting offering and

trading capabilities. A key benefit from

the combination of 888 and William Hill

is that we will bring together the best

of both businesses. By moving to a

unified technology platform, we will be

able to offer customers the very best

of sports and gaming content across

all of our brands.

CONTINUED PRODUCT

INNOVATION

Our product development isn’t solely

focused on the integration though, with

both 888 and William Hill launching

several exciting new products in 2022,

as we look to deliver a best-in-class

product experience and drive customer

engagement. We look forward to being

able to offer these features across the

brands following the integration – as

we unlock the huge potential from the

combination.

The betslip is one of the key areas of

any betting app, and during the year

we upgraded the William Hill interface

to improve the customer journey.

Customers can even boost or insure

their odds pre-match, all within the

betslip, increasing value perception

and improving customer engagement.

On 888sport we redesigned our

football pages to enable quicker acca

building and further integrate in-play

markets, leading to a 20% increase in

the number of players including in-play

markets within their accumulators.

On the William Hill gaming side we

have developed a proprietary real time

promotions framework which enables

targeted interactions with our gaming

players across all game providers –

this drives engagement for customers

and enhances their entertainment

experience. We’ve also made the whole

gaming experience more personal

and relevant for our customers with

targeted games content in the lobby,

which has improved our customer

experience, value perception and

player retention.

Within 888 gaming, we have upgraded

our core platform and significantly

increased speed, introduced our in-

house AI recommendation engine and

enabled higher levels of customisation

to further improve the customer

experience. We also launched an AI-

driven bonus distribution mechanism

supported by real-time data to award

players with surprise bonuses and

increase retention.

We have also invested heavily in

ensuring we have the best content

available on the platform, including

launching over 600 games during

2022, bringing the total games

available to around 2,800. It’s

particularly pleasing that nearly 40%

of our top 20 slots are in-house games

developed by our Section 8 studio, and

we look forward to introducing that

popular products and we made

key improvements including the

addition of leg tracking and real

time views of bet status. Enabling

customers to track their bets is

a really important part of the

customer experience, and our

players can now see the status

of each individual leg, in real-

time, and whether it is winning

or losing.

As well as being a great way

to follow the action, it allows

our customers to take informed

actions – such as

cashing out.

2022 saw the launch of an

exciting new free to play game

on 888casino across our key

markets – the daily wish wheel.

Each day, a player gets a free

spin on the wheel, and can win

free spins, cash or other prizes.

This supports our recreational

play strategy and offers our

customers another layer of

engagement and excitement.

We have a range of wheels

available including a Millionaire

Genie wheel – hosted by one

of our most popular Section8

characters, Millionaire Genie,

which is a smash hit series of

slots and games that can only be

played at 888.

Our Millionaire Genie wheel gives

players a reason

to come back to

us every day, and

is also a reminder

of our unique, high

quality games.

SAFER GAMBLING TOOLS

#BUILDYOURODDS DAILY WISH WHEEL

STRATEGIC REPORT

25888 Holdings PLC Annual Report & Accounts 2022

Founded in the UK in 1934, William

Hill is an iconic sports betting

and gaming brand operating

internationally, and one of the

leading brands in the UK. It has

a strong retail heritage, with over

1,350 instantly recognisable high

street shops.

Founded in 1997 as one of the

first online casinos, 888casino

has since grown to be one of the

largest, multiple award-winning,

online casino brands globally. We

offer almost 3,000 games, from a

combination of top providers and

our own exclusive games developed

in house by our Section8 studio, as

well as one of the largest selections

of live casino tables in the world.

888sport was established in

2008 and in a category that

islargely dominated by a few

well-established legacy brands

in each market, we continue to

position 888sport as a challenger

brand by connecting with our

players through an innovative,

cutting-edge sports experience.

888 HOLDINGS OWNS AND OPERATES SEVERAL GLOBALLY RENOWNED SPORTS

BETTING AND GAMING BRANDS, INCLUDING WILLIAM HILL, 888CASINO, 888SPORT,

888POKER AND MR GREEN. WE ALSO OPERATE THE SI SPORTSBOOK AND SICASINO

BRANDS IN THE US IN PARTNERSHIP WITH AUTHENTIC BRANDS GROUP.

KEY ENABLERS CONTINUED

World class brands

888poker was launched in 2002

and has become one of the world’s

most popular poker sites offering

an award-winning online poker

environment that enables players

ofall abilities to enjoy a wide variety

of games on mobile or desktop.

Mr Green, launched in 2008, is one

of the category’s most distinctive

and premium online gaming

brands. Instantly recognisable, and

multiple award-winning, we offer

a wide range of casino and slot

games with a particularly strong

Nordic presence.

SI Sportsbook and SI Casino are

the group’s US brands and the

newest brands in our portfolio.

Established in 2021 through a joint

venture with Authentic Brands

Group (who own the Sports

Illustrated brand), our goal is

to leverage the iconic Sports

Illustrated brand and bring unique

experiences to players in the highly

competitive US sports betting and

gaming market.

888 Holdings PLC Annual Report & Accounts 202226

STRATEGIC REPORT

Customer excellence

BRILLIANT BASICS: A

RELENTLESS FOCUS ONTHE

CUSTOMER EXPERIENCE

To us, customer excellence means

delivering the best possible customer

experience. Whether that’s by ensuring

we have the best products and

content on the market or delivering

the best possible service, we know

that by continually building customer

excellence, we will increase player

loyalty and improve engagement.

Digital entertainment businesses in all

areas of consumers’ lives, from media

and entertainment to travel and banking,

are consistently raising the standards

for superior customer experiences.

Asa result, our customers’ expectations

of their experiences with our brands

are also increasing. Consequently, we

continue to focus on enhancing multiple

areas of our products including

interfaces, improving loading times,

developing responsible gaming tools,

and delivering quality customer support

to ensure that our customers enjoy the

best possible experiences with our

brands. We benchmark ourselves against

leading brands across entertainment,

banking, and all other digital services,

not just gaming operators.

One of the key focus areas at William Hill

over recent periods has been on

improving customer journeys by focusing

on optimising the basic things that

players do the most. This could be

resetting a password, depositing and

betting, tracking bets, or changing

player safety limits. We focus on

understanding the flow of these

customer journeys and constantly

testing different options with our

customers to make their experience

asseamless as possible.

We call this concept “brilliant basics”

and have made significant improvements

across both William Hill and 888 during

2022 and this is a key focus area

goingforward as well. Weknow that by

getting the basics right and improving

our customer service we can drive

higher retention and player value.

A FIRST-CLASS RETAIL

EXPERIENCE

Our customer excellence philosophy

is critical to the success of our William

Hill shops. Our more than 6,500

shop colleagues are custodians

of the William Hill brand, and are

responsible for providing high quality,

retail experiences for our customers.

This is supported by our continuous

investment in in-store technology and

training, particularly in safer gambling

which is an intrinsic part of the retail

customer experience.

Customer excellence underpins

our whole philosophy.

Understanding our customers

and what they want, as well

as how we can engage them

and create great experiences

for everyone, is critical to

our success.

Phil Walker

UK & Ireland MD

888 Holdings PLC Annual Report & Accounts 2022 27

STRATEGIC REPORT

KPIs

Measuring our progress

WE TRACK THE FOLLOWING KEY

FINANCIAL AND NON-FINANCIAL

PERFORMANCE INDICATORS (“KPIS”).

These KPIs allow us to assess ourprogress against the

Group’s strategy and help inform decisionmaking. These

KPIs are also some of the most commonly usedKPIs for

external stakeholders, particularly our shareholders,

whenassessing the performance of the Group.

Pro forma metrics reflect the performance of the Group as

if it had owned William Hill for all periods, and exclude the

results of the 888 bingo business for all periods.

FINANCIAL KPIS

Pro forma Revenue £m

£1,850m -3%

Reported Revenue £m

£1,239m +74%

1,850.1

1,907.0

1,238.8

712.3

Definition:

Revenue represents the total amount staked or wagered by

customers, less amounts paid out to customers, free bets

and promotional credits, and VAT. B2B revenue reflects fees

receivable for the provision of gaming services.

Why we measure it:

This measures the Group’s ability to generate return on its

marketing investment and grow market share across its key

geographies and products, in line with the market focus

pillar of our strategy.

Performance:

Reported revenue increased by 74% in 2022, driven by the

acquisition of William Hill, which completed on 1 July 2022.

Pro forma revenue decreased by 3% in 2022, with a 54%

increase in retail revenue following the reopening of shops

post lockdown, more than offset by a 15% decline in online

revenue, primarily driven by proactive safer gambling

measures in the UK and the closure of the Netherlands.

Pro forma Adjusted EBITDA £m

£311m +15%

Reported EBITDA £m

£116m +29%

310.6

269.9

115.5

89.6

Definition:

EBITDA represents total earnings before interest, tax,

depreciation, and amortisation generated from our

operations. Adjusted EBITDA also excludes any exceptional

items which are typically non-recurring in nature.

Why we measure it:

This measures the underlying profitability of our business

driven by our investment choices and our ability to

effectively manage costs and leverage our growing scale.

Performance:

Reported EBITDA increased by 29% in 2022, driven by the

acquisition of William Hill.

Pro forma Adjusted EBITDA increased by 15% in 2022, driven

by the benefit of retail reopening post lockdowns, and the

early delivery of some synergy benefits.

888 Holdings PLC Annual Report & Accounts 202228

STRATEGIC REPORT

Leverage ratio (net debt / Adjusted EBITDA)

5.6x

5.6

N/A

Definition:

Leverage ratio is calculated as net debt divided by trailing

12-month pro forma Adjusted EBITDA. Net debt comprises

the principal outstanding balance of borrowings, accrued

interest on those borrowings and derivatives held for

hedging debt instruments less cash and cash equivalents

(excluding customer balances).

Why we measure it:

Deleveraging is a key strategic priority for the Group and

the leverage ratio is a measure of our capital allocation and

ability to achieve our potential. We have set a 2025 target

for leverage ratio to be below 3.5x.

Performance:

Leverage increased significantly in 2022 following the largely

debt-funded acquisition of William Hill.

Adjusted EBITDA Margin (%)

17%

16.8%

14.2%

Definition:

Adjusted EBITDA Margin reflects pro forma Adjusted EBITDA

divided by pro forma Revenue.

Why we measure it:

Adjusted EBITDA Margin is a measure of the profitability of

our business, and measures how much of our revenue we

convert into underlying profitability. Improving Adjusted

EBITDA Margin is a key strategic priority for the business.

Performance:

Adjusted EBITDA Margin of 16.8% was an increase of

2.6ppts compared to 2021, driven by retail reopening post

lockdowns, and the early delivery of some synergy benefits.

Adjusted Basic Earnings Per Share (pence)

15.1p -32%

Reported Basic Earnings Per Share (pence)

(28.3)p

15.1p

(28.3)

22.2p

13.4

Definition:

EPS represents net earnings divided by the weighted

average number of shares. Adjusted basic EPS

represents earnings excluding exceptional items, share

benefit charges and share of post-tax loss of equity

accounted associate.

Why we measure it:

This measures the effectiveness with which the Group

achieves long-term value for our shareholders in line with

the Group strategy.

Performance:

Basic earnings per share decreased to a loss of 28.3p

(2021: profit of 13.4p) due to the exceptional items

resulting from the William Hill acquisition. Adjusted EPS

of 15.1p decreased by 32% in 2022 with the increase

in Adjusted EBITDA being more than offset at a net

profit level by additional interest charges following the

acquisition of William Hill.

888 Holdings PLC Annual Report & Accounts 2022 29

STRATEGIC REPORT

N/A

Employee net promoter score

Customer net promoter score

19% +2ppts

Average monthly players (millions)

1.6m +1%

1.6

Definition:

Average monthly players (AMPs) represents the total number

of players who have placed and/or wagered a stake and/

or contributed to rake or tournament fees during the month.

The figure reflects the average of the monthly figures for the

relevant reporting period.

Why we measure it:

Customer engagement is a key driver of long-term growth,

and is useful in assessing performance against strategic

objectives, which are centred around customer experience.

Performance:

AMPs are stated on a pro forma basis and increased by 1%

in 2022 reflecting continued expansion of our recreational

customer base across core markets despite the tough

comparative period.

Definition:

Employee engagement is measured by eNPS, which looks

at how likely colleagues are to recommend 888 William Hill

as a place to work on a scale of 0-10. The percentage

of detractors (scoring 0 to 6) is subtracted from the

percentage of promoters (scoring 9 or 10) to give the net

promoter score.

Why we measure it:

We believe eNPS is a true reflection of our People initiatives.

It encapsulates the employee experience and, particularly

through a period of change, allows us to understand whether

we are supporting colleagues in the right way.

Performance:

eNPS of +8 for the Group as a whole is a positive outcome

considering the Group is going through a period of change

following the acquisition. Read more about our People

initiatives on pages 40-43.

Definition:

Customer NPS asks customers if they would recommend us

and is measured as the percentage of detractors (scoring 0

to 6) subtracted from the percentage of promoters (scoring

9 or 10) to give the net promoter score.

Why we measure it:

Customer NPS measures whether we are delivering good

experiences for our customers, which is core to our strategy.

Performance:

Customer NPS here reflects William Hill only while we are in

the process of rolling out tracking group wide. NPS increased

by 2ppts in 2022 reflecting product improvements and a

continued focus on improving customer service.

NON-FINANCIAL KPIS

KPIs continued

888 Holdings PLC Annual Report & Accounts 202230

STRATEGIC REPORT

31888 Holdings PLC Annual Report & Accounts 2022

CUSTOMERS COLLEAGUES REGULATORS

WHY?

Our business and livelihood depend

upon our customers. Building strong

relationships with them, using the

expertise of our teams, ensures we

gain a deep understanding of their

needs, allowing us to identify areas

of support.

Our competitive customer offering is

achieved by protecting customers,

improved product personalisation

and innovation and best-in-class

customer support.

By understanding what our

customers think about our brand,

products and services, we can focus

on continuous improvements that

align with their priorities.

The priority for our customers is

a superior betting and gaming

experience. This means playing

great products, enjoying quality

customer service and having

confidence that they are playing in

a safe and secure environment.

The talent, commitment and skill

of our colleagues around the world

underpins our ability to deliver our

strategic priorities.

We are proud of our colleagues

and want to provide them with a

workplace where they canflourish.

Empowerment, career development,

health and well-being and social

responsibility are all areas our

colleagues have told us they

consider important in the workplace.

We have an inclusive informal

culture, rooted in respect, care and

commitment.

Regulators across various territories

give the Group a licence to operate

and set the terms for providing

services in their markets.

We need absolute clarity on their

regulations to ensure we align with

their priorities. Regulators have an

important role in promoting a safer

gaming environment, which benefits

all operators such as 888 that are

committed to responsible models

of operation. As such, it is valuable

for the business to maintain regular

dialogue withregulators.

Regulators must be reassured that

operators are using the full scope of

their resources to comply with local

market regulations and deliver a

safe gaming environment.

HOW?

We regularly measure the quality of

our service performance through

customer satisfaction, Net Promoter

Scores, surveys and web analytics.

Our customer services teams and

retail colleagues are in contact with

our customers daily. We operate

multiple communications channels

to generate feedback, to gain

insight and to understand their

preferences and needs.

We use data analytics and

AItogether with our customer

communications channels to

promote safer gambling.

More information about Safer

Gambling can be found in our

Sustainability Report on page 34

Our workplaces are informal, open

and collaborative underpinned by

high professionalstandards.

Regular “Town Halls” are held to

update on business developments

and allow questions and feedback.

All colleagues have the opportunity

to provide feedback through

employee engagement surveys,

forums and apps such as Slido.

eNPS is measured group wide

following the acquisition of William

Hill, with a current score of +8.

We are committed to proactive,

timely and transparent internal

communications with our team on

an ongoing basis.

We continue to monitor and develop

our approach to performance

management, to promote a culture

of continuousimprovement.

Read more on page 59

STAKEHOLDER ENGAGEMENT

Who are our stakeholders?

888 Holdings PLC Annual Report & Accounts 202232

STRATEGIC REPORT

SHAREHOLDERS COMMUNITIES PARTNERS

WHY?

As investors in the business we

want to ensure we understand

the views of our shareholders and

debtholders.

The relationship between the

Board and its investors is based on

trust, transparency and the timely

disclosure of information.

The Board recognises the

importance of demonstrating a high

level of openness and engagement

to maintain confidence in our ability

to create value.

Investors seek clear evidence

that the company has a strategy

for value-creation across the

short, medium and long-term.

They demand transparency as

the foundation of a trust-based

relationship and expect clarity on

the Board’s approach to maximising

opportunities and managing risks.

We recognise that the local

communities where we operate can

be a business’s greatest advocates,

particularly when it comes to

recruitment.

To maintain a positive relationship,

we need to listen to local issues

and understand how we can have a

positive impact.

The communities around our global

offices look for the company to

demonstrate its commitment to the

local area by being a responsible

corporate citizen.

Our retail estate depends on the

support of our local communities.

We aim to build lasting relationships

within the communities in which we

operate and our retail colleagues

know and understand their

customers.

We work with partners in various

areas of our business.

It is imperative we maintain an open

dialogue with our partners in order

to operate effectively together and

ensure that our interests are aligned.

Our partnerships rely on our track

record for effective management,

value creation and responsible

business operations.

Our partners want to know that this

reputation is secure for the long-

term and that they can trust our

team to deliver a mutually beneficial

partnership.

HOW?

We have an open dialogue and

regularly meet with our major

shareholders and debtholders to

get their views and feedback.

We provide regular investor updates

through the publication of trading

updates, half and full year results.

Market views and shareholder

analysis is included as a standing

Board item.

We ensure an ongoing conversation

with investors through our financial

reporting as well as events such as

our Annual General Meeting and

Capital Markets Events.

Read more on page 43

We have an open, constructive

and effective relationship with all

partners through regular meetings

which provide both parties the

ability to feedback on successes,

challenges and the future roadmap

The Group’s whistleblowing hotline is

available to suppliers to allow them

to raise any concerns anonymously

and all issues are tracked and

monitored.

The Company views stakeholder engagement as an important part of its ongoing

governance arrangements. As a Gibraltar company the UK Companies Act 2006 does not

apply, however we continue to comply with the requirements of section172. In accordance

with the UK Corporate Governance Code 2018, the Company’s key stakeholders are

considered in Board discussions and decision-making with all board papers including an

explanation of how the impact to stakeholders has beenconsidered.

STRATEGIC REPORT

33888 Holdings PLC Annual Report & Accounts 2022

ESG framework –

Players,People, Planet

SUSTAINABILITY

OUR APPROACH TO ESG AND SUSTAINABILITY IS FUNDAMENTAL TO THE

GROUP’S LONG-TERM GROWTH AMBITIONS, AS WE CONTINUE TO BUILD

THE BUSINESS INTO A GLOBAL ONLINE BETTING AND GAMING LEADER.

Both the 888 and William Hill

businesses have made significant

progress in these areas in recent

years and as a combined Group

things are no different – we take

our responsibilities seriously and

this is a critical foundation to all our

strategic plans.

As we work through the integration of

the two businesses, we have reviewed

our respective approaches to ESG

matters and have begun work on

creating a bigger and bolder holistic

framework that encapsulates the

global nature of our business, along

with ensuring we do the right thing for

the millions of players we entertain

each year and the thousands of staff

we employ throughout the world.

Our ESG framework, called Players,

People, Planet is now the bedrock for

our broader corporate strategy moving

forwards. We realise that if we do not

invest in this area, we will not reach

our overall business goals. We also

strive to run our business the right way,

caring for our players, our colleagues,

the communities we are part of, and

the planet we live on. We strive to

have long-term and mutually fruitful

relationships with our players, ensure

our colleagues can thrive at work and

ensure we are protecting the planet

we live on.

We continue to increase investment in

this area building on the great work

done by both businesses in recent

years. The ESG Committee of the

board meets regularly, and during

the year was led by the Chair of the

Board, Lord Mendelsohn. In January

2023, Andria Vidler took over as Chair

of the ESG Committee following Lord

Mendelsohn’s move to an Executive

position on an interim basis.

Part of the evolution of our ESG

framework, and our bigger and

bolder ambitions, will involve the

establishment of a range of goals

related to different areas, against

which the board will receive regular

updates about progress. Our wider

executive team are intimately involved

in our ESG plans and will have relevant

targets related to our goals in this

area included as part of their annual

bonus plan.

We also strive to run our

business theright way, caring

for our players, our colleagues,

the communities we arepart of

and the planet we live on.

Phil Walker

UK & Ireland MD

888 Holdings PLC Annual Report & Accounts 202234

STRATEGIC REPORT

Players

PROTECTING OUR ENVIRONMENT,

INCLUDINGNETZEROCARBON

Planet: Work continues to reduce our carbon emissions in line with our net

zero goals. Key highlights include 888 achieving a B- CDP rating, and retaining

membership of the FTSE4GOOD index, which shows us to be making coordinated

action on ESG issues. William Hill also made significant progress in this area prior

to the completion of the acquisition including becoming certified as carbon neutral

this year across its Scope1 and Scope 2 emissions – a fantastic achievement

considering the size of our large retail estate.

In 2023, we will continue to strive to deliver against our ESG goals. We are aiming

to increase our impact in all areas to ensure we are running a truly socially

responsible business.

Planet

People

AN ENGAGING AND INCLUSIVE ENVIRONMENT

WHERECOLLEAGUES CAN THRIVE

People: 2022 has been a year of significant change for colleagues across the Group

as we brought the two businesses together. During the first half of the year it was all

about supporting colleagues in advance of completion, and following completion

is has been about transparent communications and regular updates on integration

progress. We also rolled out employee engagement tracking to all 888 colleagues so

we now have agroup wide view of how our colleagues are feeling. This is crucial as we

enter a period ofsignificant change with the rollout of our new operating model, and

as we look to build a winning culture for the future.

PREVENTING HARM THROUGH SAFER GAMBLING,

ANDENGAGING PLAYERS WITH POSITIVE EXPERIENCES

Players: Work continues across all brands as we aim to make player safety an

integral part of customers using our products. During the year we launched an

intuitive Profit & Loss product feature to the William Hill app and enhanced the

control centre product on 888 apps giving users further control over their play. We

continue to invest in new tools, processes and technology to ensure that we build

safe and sustainable gambling experiences.

THE EVOLVED FRAMEWORK FOR OUR ENLARGED BUSINESS

COVERS THE FOLLOWING AREAS:

STRATEGIC REPORT

35888 Holdings PLC Annual Report & Accounts 2022

SUSTAINABILITY CONTINUED

As we work to integrate the two

businesses, player safety will remain

critical to everything we do. We strive

to maintain long term relationships with

our players, which we know must be

built on ensuring customers gamble in

a safe and sustainable way.

As part of the ‘Players’ pillar of

our ESG framework, teams across

the business are working on a new,

holistic approach to player safety

that can be consistently applied

across all of our brands, platforms

and geographies, subject of course to

ensuring compliance with specific local

requirements where relevant. Safer

gambling is an area both businesses

have not always got right in the past,

but under new leadership we are re-

doubling our efforts to ensure player

safety is embedded at the heart of

everything we do and enhancing our

approach in this area is a key part

of the plan.

During 2022, and partly in anticipation

of the gambling white paper being

published by the government in the

United Kingdom, we continued to

enhance our player protection strategy

across our brands in the UK. The wider

group has taken on William Hill’s prior

top tier membership of the trade

association, the Betting and Gaming

Council (BGC) in the United Kingdom.

The BGC has worked hard to drive

standards in the UK in recent years

delivering cross industry collaboration

on such projects as:

• Whistle to whistle ban – restricted

gambling adverts during sporting

events before 9pm;

• Ad-tech – using the latest online

advertising technology to reduce

exposure to gambling content in the

young and ensure that targeted ads

are seen by players aged over 25;

• Research, Education and Treatment

(RET) spend – increasing voluntary

funding year on year up to 1%

of GGY in 2024 from the biggest

brands, including William Hill; and

• Ongoing work around piloting new

cross industry initiatives such as a

single customer view.

Players

UK example: Always on player

monitoring system

Control environment invisible to the

average recreational customer who

can play freely

Account creation

• All accounts fully age verified

• GAMSTOP database screening

• Global spend limits mandated

• Know Your Customer checks

• Education on safer gambling

High spend

• Spending alerts

• Financial vulnerability

checks via Transunion

• Strict limits for those at risk

of financial harms

• Enhanced due

diligence checks

• Source of funds checks

Behavioural change

• Behavioural analysis

checks daily

• Alerts based on different

behavioural triggers

• Account reviews undertaken

by highly trained team

Interactions

• Automated ‘nudges’ based

on behaviour

• Phone interactions for higher

risk customers

Interventions

Options range from:

• Account closure

• Temporary cool-off

• Enforced limit

• Industry data sharing

888 Holdings PLC Annual Report & Accounts 202236

STRATEGIC REPORT

Education

and

awareness

Personalised

risk profiling

Safer

gambling

tools

Human: e.g.

personal

interaction; further

monitoring

Monitoring

of markers

of harm

Automated:

e.g. marketing

suppression

targeted comms

Player

safety

On the 28th March 2023 the GBGC

announced that a £19m regulatory

settlement in lieu of a penalty had

been reached with William Hill in

relation to historic player safety

failings.

The failings occurred before we owned

William Hill, so we could have had

no bearing on the areas that were

investigated. However, the team had

already taken significant remedial

action, and we have further reinforced

this following the acquisition. As a

result, the business is now in a far

stronger position from a compliance

perspective.

KEY TRENDS

The usage of deposit limits by

customers continued to rise across

all our brands. Deposit limits are an

important safer gambling tool, and

adoption increased from 36.6% in 2021

to 45.1% in 2022 as we continued to

encourage customers to set their own

limits, while also proactively imposing

limits on some customers where we felt

prudent to do so.

We increased our interactions with

customers through different contact

methods. Interactions with customers

helps us to identify and prevent

harmful play before it occurs, and

in 2022 we recorded over 2.7 million

customer interactions across our

brands, which represented an 18.6%

increase year on year.

In retail we pride ourselves on our safer

gambling focus and the relationships

our highly trained colleagues can build

with customers. In 2022 we conducted

88,308 safer gambling interactions,

up from 37,704 in 2021, albeit the retail

estate was closed for much of 2021.

The global roll out of 888’s proprietary

Control Centre safer gambling product,

which empowers players to make

more informed decisions about their

gambling through intuitively presented,

real time data, continued at pace, with

72% of 888 brand players worldwide

now having access to the product, up

from 39% this time last year.

We also continued to deliver safer

gambling training to all colleagues

across the business, regardless of

role, to strengthen our culture of

playerprotection.

Financial vulnerability checks using

third party service providers were

rolled out in the United Kingdom for

all customers at low levels of spend

across all of the Group’s brands – with

over 500,000 of these checks taking

place in 2022.

KEY ACHIEVEMENTS IN 2022

Work continued throughout the year

to advance the Group’s approach to

player safety across all brands and

channels.

Reflecting on our progress we have

delivered several key initiatives across

the three focus areas of our player

safety framework:

Prevent: Instil safer gambling principles

across the player base and with

colleagues to help prevent gambling

related harm before it occurs.

Identify: Use best in-class proprietary

and third party technology to identify

risky players quickly.

Act: Interact with players at different

risk levels at the right time using the

right contact method.

Progress against each of these

focus areas is listed below. Alongside

this we have continued to invest in

strengthening our Compliance and

Safer Gambling teams, which now

comprise more than 400 professionals.

We also continue to invest in the

technology and product required to

ensure we are offering our players

a safe and sustainable gambling

experience and ensuring safer

gambling is an intrinsic part of playing

with our brands.

Players

888 Holdings PLC Annual Report & Accounts 2022 37

STRATEGIC REPORT

SUSTAINABILITY CONTINUED

PREVENT

We believe that a core principle

of safer gambling is the upfront

prevention of harm. We do this through:

Education and awareness: Ensure

players know the risks of gambling

and normalise discussions about safer

gambling. We also strive to ensure

colleagues are informed about the

potential risks a small proportion of

our players can face from using our

products, so they are better positioned

to identify vulnerable players and

prevent the risk of harm.

Safer gambling tools: Drive mass

adoption of safer gambling tools

that help players control spend and

provide alerts regarding their betting

behaviour.

In 2022 we saw good progress in this

area with the adoption of deposit limits

by our players increasing by 36% to

45% of our total player base. Processes

have also been adopted to add in

mandatory limits for players early in

their account life and to ensure the

limits available are appropriate.

William Hill has continued to improve its

profit and loss tool by making it more

intuitive, with simple and clear visuals of

a player's activity. The tool is also now

more prominent across its products,

making it much more visible to players

throughout the customer journey.

Along with the Control Centre product

on 888 brands these features give

us great data and insight into what

customers interact with, what works

and what doesn’t. We will continue to

innovate, learn and improve.

In retail, a new system of alerts have

been built into machines to flag to

retail colleagues if a customer may be

exhibiting concerning behaviours.

We continued to normalise the use

of safer gambling tools by including

messaging in above the line TV

adverts and direct player marketing

campaigns across all our brands.

Finally, training of colleagues across

the business has continued at pace

with all colleagues now participating in

safer gambling training each year.

IDENTIFY

We believe technology is a key driver

of a successful safer gambling strategy

and we have continued to invest in

building up our capabilities in this area.

Our focus here is twofold:

Monitoring of markers of harm:

Timely analysis of player behaviour to

highlight potential risk factors.

Personalised risk profiling: We want

to ensure players get an individualised

gambling experience that relates to

them directly.

Across William Hill’s retail estate, we

continued to advance our technology,

with new player safety warnings now live

to colleagues via the EPOS till system.

The Group’s retail presence is a huge

strength of our business, particularly

for safer gambling interactions. Our

trained retail colleagues can interact

face to face with any customers who

might exhibiting signs of harmful

gambling and can do so in a one

to one, effective manner. Our shop

colleagues carried out over 80,000

safer gambling interactions in 2022.

With the number of brands in our

portfolio we now have a complex

ecosystem across multiple different

platforms. Key work has been

undertaken to start to align our

platforms, including sharing self-

exclusion information and account

closures around our brands, ensuring

players are better protected across

the Group.

In the United Kingdom the issue of

affordability continues to be a critical

point of discussion across stakeholders

including operators, the regulator and

politicians. We made significant strides

in introducing automated checks within

our ecosystem in partnership with third

party service providers. These checks

use technology alongside financial

markers of harm, such as bankruptcy

and county court judgement data to

help us identify players who may be at

elevated risk offinancial harm.

ACT

We believe that multiple different forms

of interactions with customers must

take place to ensure we create a truly

safe gambling eco system. We believe

that we must build a system that utilises

automated nudge interactions as well

as harnessing the power of our highly-

trained colleagues to talk to customers

on a one-to-one basis. We use an

increasing number of automated

interactions at the lower end of the

player risk spectrum, but where the risk

is higher, we use a mix of human and

automated interactions to ensure we are

doing everything in our power to support

the player. A great strength of the retail

model is the ability to have a human

interaction with almost every customer

that walks through the door and

indeed our retail teams build up strong

relationships with regular customers.

Our work across the act pillar focuses

across two key interaction types:

Human: We carry out thousands

of one-to-one interactions with our

players on a daily basis. We want our

colleagues to have the best training

available to ensure they are in the

best position to deliver meaningful and

impactful interactions.

Automated: We are a business of

scale that has millions of players

around the world. In order to effectively

communicate with such a large

player base, we must have a scalable

technology solution to be able to

interact with our players at multiple

points in their gambling journey.

In 2022 we continued to evolve our

interaction abilities in both areas. We

invested in enhanced training, reduced

thresholds which trigger interactions,

and introduced mandatory safer

gambling interactions in retail. Online

we continued to grow our team across

Players continued

888 Holdings PLC Annual Report & Accounts 202238

STRATEGIC REPORT

Compliance and Player Safety to

ensure we have the appropriately sized

team to deal with our growth plans.

We also modernised how we review a

player’s account and have deployed a

new bespoke player case management

system to improve our record keeping

and accuracy when reviewing a player’s

account. For 888 brands, the Observer,

our proprietary player monitoring

system, continued to drive effective

automated interactions with players,

supporting a 4 % increase in automated

interactions at 888’s brands in 2022.

RET FUNDING SUMMARY

888 Holdings is a Category A member of

the Betting and Gaming Council (BGC),

the industry trade body for the United

Kingdom. As part of their commitment

to safer gambling, the core BGC

members have committed to increased

funding for organisations supporting

research, education, and treatment of

problem gambling. This commitment

has seen spending at William Hill grow

from 0.1% of GGY in 2018/19 to an

enhanced level of spending of 0.75%

in 2022/23 to reach a target of 1% in

2023/24. The primary beneficiaries of

our RET spend in 2022 were:

Gambleaware: An independent charity

which commissions treatment and

prevention programmes across the

United Kingdom, including funding the

National Gambling Treatment Service.

Funding continues to be provided

as part of the Betting and Gaming

Council’s long-term commitment to

guarantee funding for the charity.

EPIC Risk Management: A training,

education, and advisory company that

specialises in using lived experience of

gambling harm to deliver programmes

around how to prevent gambling-

related harm. We partnered with EPIC

to deliver a game changing gambling

harm minimisation programme for the

horse racing industry. The focus on

this educational programme will be on

how professional and amateur jockeys,

and individuals working in multiple

roles across the horse racing industry,

interact with gambling and gambling

related messages.

Anonymind: Anonymind is a provider of

both online and residential treatment

and therapy for individuals suffering

from gambling harm. We supported its

treatment programmes, ensuring those

that need support can get it quickly.

Gamcare/YGAM: We support

the funding of the national Young

People’s Gambling Harm Prevention

Programme, a joint national education

programme for young people around

the United Kingdom. This is a four year

programme that runs from April 2020

until April 2024 across the country.

Gordon Moody Association: Gordon

Moody is a charity providing support

and treatment for gambling addiction.

We supported Gordon Moody’s female

residential treatment programme. The

programme, which is a world first, was

launched at the end of 2021.

Betknowmore: Betknowmore is a

charity that provides gambling support

and training services. William Hill has

supported their Gambling Outreach and

Living Support programme. This is a

community outreach programme initially

launched in two London boroughs.

NEXT STEPS IN 2023

As we move into 2023 our focus turns

to evolving and enhancing our safer

gambling plans to ensure they support

our bigger and bolder ambitions as

a new, enlarged business. We aim to

bring together the best of all of our

brands to evolve our offer and develop

a best-in-class player protection

framework for our brands across the

world. Compliance with the regulations

around the world is a minimum

requirement, we aim to go above and

beyond to ensure our revenues are

sustainable and we retain our player

base for years to come.

Players continued

888 Holdings PLC Annual Report & Accounts 2022 39

STRATEGIC REPORT

SUSTAINABILITY CONTINUED

2022 has been a year of significant

change for colleagues across the

Group. With the acquisition of William

Hill non-US business completing on

1July the year has been divided into

two distinct periods. The first saw

both legacy organisations supporting

their colleagues in preparation for the

acquisition and the expected impact

on teams. The second has been a

period of change with the impact of

the acquisition beginning to be felt

across the Group as we work to bring

both businesses together.

Bringing together over 11,000

colleagues in our new combined

business has challenged the leaders

in our business and the People team

who support them, with a focus on

fourkey areas.

• Integration and change: The

need to quickly establish the

operating model and structures

of our combined business to

enable the business to achieve

ambitious synergy targets meant

rapid and significant change for

ourcolleagues.

• Engagement: Maintaining

engagement levels through periods

of change is a key challenge for

the business, making clear and

regular communications meaningful,

supportive and transparent.

• Organisational culture: Both legacy

organisations have their own unique

cultures, our priority looking forward

is to build our new winning culture

where people want to join and

love to stay.

• Future People strategy: There are

consistent themes within the people

strategies of William Hill and 888,

the focus now is to create a new

strong identity and set out our

ambition for the future.

INTEGRATION AND CHANGE

The first priority for the Group following

the acquisition of William Hill was to

establish the strong leadership team

who would guide the business through

change. On 1 July we announced our

new Executive Team, combining the

previous William Hill and 888 teams to

create a new management team with

vast experience and a track record of

success in the industry.

Following these appointments the

Executive Team began their work to

design and build their new operating

models to understand the structure

of their new leadership teams. In

November we were able to announce

our new senior leadership team,

putting in place the individuals who

would support the Executive Team in

delivering their strategies. In doing

this we were able to draw on the large

and experienced combined talent

pool of the Group, ensuring a balance

between both legacy organisations

and diversity across our locations.

In early 2023 we announced the

immediate departure of our CEO, with

Lord Mendelsohn stepping in on an

interim basis as Executive Chair, and

the intended future departure of our

CFO. Given the plans that had already

been put in place, and the stability

within the wider executive and senior

management team, we are confident

our people can navigate through this

additional element of change.

With accelerated plans to deliver

synergies across the business in late

2022 through into 2023 the business

then began plans for change. Several

key initiatives were delivered through

the second half of the year with

highlights including:

• Business operations and customer

service model

Although we are only in the early

stages of bringing the customer

operation teams of the two legacy

organisations together, we have

already started to look at how the

different processes, systems and

teams can be aligned to support all

customers. Our People team across

several of our locations including

the UK, Gibraltar, Romania, Bulgaria

and the Philippines have been an

integral part of this work.

• Bolder in Retail

This initiative aimed to restructure

the William Hill UK Retail business to

change the way we work ensuring

the sustainability and profitability of

retail into the future. We appointed

a revised retail leadership team with

a refreshed regional model and

introduced new roles to our shop

teams with changed responsibilities.

This meant over 1,000 colleagues

stepping into the new role of Team

Leader, with extensive support from

our retail People team to help them

transition into this new role.

• Product and technology

Our Product and Technology team

continues to play a vital role in

the business. The appointment of

Anna Barsby as Chief Product and

Technology Officer, an experienced

transformation leader with a strong

track record of delivering large

scale change, was a key first step

in the integration of our platforms

and products. Anna moved quickly

to determine the future of the

Group’s technology and product

infrastructure, with decisions relating

to future platforms and structures

made soon after her appointment.

These decisions had a significant

impact on teams within her business

area, and the People team were

vital in supporting individuals in

many of our locations.

ENGAGEMENT

Management recognise that

maintaining colleague engagement

through a period of significant change

will be a key challenge for the business.

Prior to the acquisition both 888 and

William Hill had been through several

years of change and uncertainty and

there was unanimous agreement that

the second half of 2022 into 2023 and

beyond would be no different.

The first priority for the Group was

to ensure we were able to measure

and track engagement in a way that

was consistent across both legacy

organisations as we worked to bring

them together. Very soon after

acquisition we were able to launch

Workday Peakon, the platform through

which William Hill had previously

delivered its engagement surveys, to

colleagues across the whole Group.

This established a regular cadence of

surveys to understand how colleagues

were experiencing the change across

the business. These surveys allow

colleagues to answer a series of

questions about the business as well

as leaving comments and feedback

for leaders to acknowledge and

respond to, creating a consistent

two-way communication channel.

Our engagement surveys are issued

People

888 Holdings PLC Annual Report & Accounts 202240

STRATEGIC REPORT

People

WHAT IS ENPS?

eNPS is measured by asking

colleagues to score the question

“How likely is it you would

recommend 888 William Hill as

a place to work?” on a scale

of 0-10. The percentage of

detractors (scoring 0 to 6) is

subtracted from the percentage

of promoters (scoring 9 or 10) to

give the net promoter score.

We believe that a positive eNPS

is a true demonstration of the

success of our People initiatives.

It encapsulates the employee

experience and, particularly

through a period of change,

allows us to understand whether

we are supporting colleagues

in the right way. We are proud

to have finished 2022 with an

eNPS of +8 across the combined

Group, with a score of +28 and

+29 in the non-retail businesses of

William Hill and 888respectively.

Recognising the importance of

this measure, eNPS has been

included in the remuneration

targets for the Directors,

Executive Committee and other

senior leaders to promote a

collaborative approach to

engaging colleagues across

the Group. We anticipate

many significant challenges to

engagement in 2023 – large

scale people change as we

deliver the new organisational

design, continued external

economic pressures on customers

and colleagues, and ongoing

regulatory challenges in our

key markets. We aim to at least

maintain our current engagement

levels with plans in place to build

on this strong foundation.

to 100% of our colleagues via the

Workday Peakon platform, with an 80%

response rate.

The key measure of success identified

as the main focus for the Group is our

employee net promoter score, or eNPS.

ORGANISATIONAL CULTURE

Prior to the acquisition both 888 and

William Hill had strong and distinctive

employment cultures. Our priority

for shaping the culture of the new

business was to draw on the strengths

of both organisations, maintaining and

nurturing the values and behaviours

which made them such successful

businesses in their own right.

The first step on this journey was to

undertake a comprehensive review

of the culture of both organisations,

to enable the development of a

well-informed plan for change

and engagement. To do this we

engaged third party consultants

to independently assess each

organisation, exploring the two

heritages with the aim of providing a

shared understanding of their culture

in relation to values, leadership and

People team.

The outcome of this review gave us

key insights into our shared values.

The core principles of collaboration,

respect, transparency, authenticity

and caring underpinned those

values and the behaviours each

organisation expected of its leaders. It

is these principles which will form the

foundations of our new culture and

our plan to continue to integrate the

twobusinesses.

For 2023 our key objective is to define

and embed a common set of values

to bring together the best of both

organisations. To be authentic these

values must be embedded into the

day to day experience, owned and

role modelled by leaders, celebrated,

and used as a means to hold ourselves

and each other to account. We are

now developing a plan to create

these values with a consultative and

collaborative process with the business,

led by our centres of expertise in HR.

FUTURE STRATEGY

There are consistent, shared themes

across the legacy People strategies of

888 and William Hill. Our focus since

acquisition and into 2023 has been on

creating the new, and we have started

with our 2025 People Ambition.

Across both organisations we believe

it is clear that there are three priority

areas of focus to build the foundations

of everything we do:

• Defining the working culture of

our organisation, tied to the new

values of the Group, empowering

colleagues to work in the way that

suits them best and supporting

them in every aspect of their

lives. This includes our approach

to flexible working, the health

and wellbeing support we extend

to colleagues, and developing

empathetic and supportive leaders;

888 Holdings PLC Annual Report & Accounts 2022 41

STRATEGIC REPORT

SUSTAINABILITY CONTINUED

People continued

FUTURE STRATEGY CONTINUED

• Adding the skills and capabilities

that the Group will need as we

move forward to achieve our

ambitions, investing in nurturing

and developing our talent to set

the standard across the industry.

This gives colleagues access to

the industry’s best development

programmes and makes sure we

support the career ambitions of all

of our colleagues; and

• Ensuring that we celebrate our

differences and have a culture

where all colleagues, no matter their

background and experiences, feel

represented and respected. Here

we focus on inclusion and belonging

with the natural consequence of

diversifying our business across

every level of the organisation.

MEASURING OUR PROGRESS

Alongside the focus on integration and

our people plans around this, both

legacy organisations continued with a

range of people initiatives throughout

the year, alongside tracking a range

of people related metrics, the data

for which is set out below. Given the

transaction completed on 1July 2022,

the data presented below (unless

otherwise specified) is taken as

the combined position as if we had

been one company for the whole of

2022. We will use the 2022 numbers

presented here as a baseline and

during 2023 as we create a combined

people strategy, we will look to define

specific objectives and targets related

to certain of these metrics.

DIVERSITY AND INCLUSION

Both legacy organisations have

strong commitments to developing

inclusive cultures rooted in respect.

We know that an integral part of our

success is diversity of background,

experience and perspective and we

actively promote inclusivity, including

ensuring there is no less favourable

treatment on the grounds of sex, sexual

orientation, gender re-assignment,

marital or civil partnership status,

race (including colour, nationality,

ethnic or national origin), disability,

religion or belief, age, or pregnancy

and maternity. We strive to ensure

reasonable adjustments are provided

for people with disabilities who are

applying to or already working with us.

Key highlights of 2022

• William Hill added an Inclusive

Leadership module to the

Leadership Essentials programme,

requiring all new people leaders to

develop their understanding of why

diversity and inclusion is integral

to organisational success and how

they can be an inclusive leader.

• In October 2022, many of our

locations around the world

introduced a global menopause

policy, with other locations set to

introduce it in 2023.

• In November 2022, we continued the

evolution of our family leave policies,

launching our new Neonatal policy

in the UK, providing full pay for the

duration of a neonatal admission.

• Our Product & Tech department

also employed several women

through the company Code First

Girls, who provide free coding

courses to women across the UK.

• We continue to celebrate and

mark key dates in the Diversity

and Inclusion calendar with global

events and internal communication

campaigns including International

Women’s Day, Men’s Health

Awareness, Pride, Mental Health

Awareness and Black History Month,

among others.

As we continue to build on the

strengths of our two businesses, our

priority remains building an inclusive

organisation where individuals are

respected and valued for who they

are. Our focus for 2023 will be driving

progress through our new DE&I

governance structure which will provide

a framework for all DE&I activity across

the new, combined organisation.

The new structure will include the

introduction of a group wide steering

committee, providing strategic

direction and guidance for all DE&I

activity; the launch of an employee

led Inclusion Council to provide

employee voice and input to shape our

DE&I approach; and the creation of

multiple employee networks, bringing

colleagues with shared experiences

and interests across all areas of the

organisation together.

Diversity at 888 William Hill 2022

Employees worldwide 11,861

Female employees 5,622

% of female employees 47%

Part time employees 4,097

% part-time employees 35%

Number of contractors 141

% of women on the Board of Directors 44%

% of women in senior management positions 32%

% of women in junior management positions 33%

% of women in STEM positions 22%

% of women in management positions in revenue-generating functions 39%

18-24 14%

25-34 35%

35-44 25%

45-54 14%

55-64 10%

65+ 2%



Workforce by age

11,861

888 Holdings PLC Annual Report & Accounts 202242

STRATEGIC REPORT

People continued

COMMITTED TO COLLEAGUE

DEVELOPMENT

Learning support is available to every

colleague via a suite of blended

learning solutions that is tailored to

either role, function, or level within

the organisation e.g., individual

contributor/people leader/senior

leader, as well as a variety of other

content to support personal and

competency development. Every new

colleague receives a tailored induction

which includes access to learning

content that is location specific. Every

colleague has access to a Learning

Management System, which hosts all

company required learning, optional

personal and skills development

content, and the ability to book onto

live webinars or courses that are

delivered by our internal experts.

In 2022 every level of leadership in

the WH business had access to a

structured leadership development

programme, which will be broadened

to the wider 888 WH audience in

2023. During 2022, 888 used external

suppliers to support development

progress for colleagues and leaders.

In our Product & Technology function,

colleagues have access to O’Reilly,

a global and best in class online

learning platform that offers a range

of learning paths, conferences,

online live events, and sandboxes for

colleagues to learn about the most

up to date developments and in the

global industry.

Talent at 888 William Hill 2022

Total number of new hires 4,395

Total number of new hires

from internal candidates 1,235

Total employee

turnoverrate 35%

Voluntary employee

turnover rate 29%

* How have senior management, junior

management, STEM and management positions

in revenue-generating functions been defined?

Senior management:

Executive team and their direct reports.

Junior management:

Women in non-senior management roles.

STEM:

Women in Technology roles, excluding Trading.

Management in revenue generating functions:

Colleagues that work directly for our P&L

functions (UK&I Market (including Retail & Online),

International Market).

Our 2025 ambition is to be

the best place to work in the

industry, with a strong identity

that sets the standard for

what great looks like. We

celebrate individuality, care

for each other and invest in

developing talent

ECONOMIC AND COMMUNITY

CONTRIBUTIONS

The Group employs a significant

number of people across over 1,350

retail outlets and offices in more than

14 territories. As such, our economic

footprint is significant and in 2022, we

contributed £588m in taxes and duties

across our countries of operation.

During the year the William Hill

hardship fund awarded 11 grants for

employee hardship, with an average

value of over £2,000, ensuring our

colleagues are cared for when they

need it most.

We are part of communities all over

the world and we want to play a key

role in giving back in those areas.

As part of that colleagues from all

our brands have volunteered across

numerous projects worldwide. In the

United Kingdom, William Hill have

built a partnership with Neighbourly,

a platform that provides volunteering

opportunities for colleagues across the

country. As part of the first year of this

programme 92 colleagues participated

in 18 projects across the country

focusing on supporting work covering

the themes of wellbeing, sport and the

environment. Across our 888 brands

colleagues volunteered supporting

such causes as typhoon relief, animal

shelters and other charities chosen

by colleagues that were relevant to

their location.

Pro forma contributions at

888 William Hill 2022

Total tax contribution £588m

Sports sponsorship, levies

and picture payments £114m

Employee hardship

fundgrants £22,390

888 Holdings PLC Annual Report & Accounts 2022 43

STRATEGIC REPORT

SUSTAINABILITY CONTINUED

2022 was a year of transition for the

Group as we began work to combine

the 888 and William Hill businesses.

TheGroup’s carbon footprint

expanded significantly with the

William Hill acquisition due to its large

retail estate, and we have continued

to evolve both in understanding

our climate impact and working to

address our carbon footprint. Focus

on addressing environmental impact

has been increasing across both

businesses in recent years and we

intend to build on this as a combined

Group movingforwards.

We will be reviewing our environmental

goals and targets reflecting our

priorities and operations as a

combined Group. We recognise that

climate change is one of the greatest

challenges of our time and we want

to ensure we are playing our part by

minimising our impact on the planet

and setting strong, challenging,

emission reduction goals.

We are proud of our progress so far

which has been recognised across

various ESG Ratings bodies though we

recognise there is more work to do to

reduce our impact on the environment.

KEY ACHIEVEMENTS IN 2022

• Net zero by 2030: achieve 80%

reduction in Scope 1 & 2 (2019

baseline) – 888 (excluding William

Hill) – 44% reduction in Scope 1 and

2 (market-based) emissions from

2019 baseline.

• Net zero target across value chain

by 2035 – 888 (excluding William

Hill) – 10% reduction in Scope 3

emissions from 2021.

• ESG ratings – improvements in our

CSA and CDP ratings alongside

maintaining our strong MISC and

FTSE4GOOD ratings.

• William Hill became one of the first

operators in the sector to become

certified as carbon neutral (Scope 1

and 2 emissions).

• First qualitative climate-related

scenario analysis performed and

climate is recognised in the Group

Risk Register for the first time.

TCFD SUMMARY

We again publish our Task Force on

Climate-related Financial Disclosures

(TCFD) report, building on our work last

year, with a summary provided in this

section and more detailed information

about the climate related governance,

strategy, risk management (including

scenario analysis) and metrics and

targets available in the dedicated

TCFD Report found on page 68.

Governance

Our climate governance begins with

the Board’s approval of the strategy

and targets set out in the Zero Carbon

Report 2022 (available on our website).

The Group has an established system

of ESG governance which is embedded

throughout the organisation, with the

Board being ultimately accountable

for the implementation and delivery of

the transition plan. The ESG Committee

of the Board has oversight of all ESG

matters across the three pillars of our

framework (including Planet) and the

Group’s ESG governance structure is

outlined on page 69.

Our ESG governance structure evolved

to include a Risk and Sustainability

Committee, a monthly executive

management committee which

provides oversight to support the ESG

Committee of the Board in managing

risks to 888’s long-term strategic

objectives. In March 2023, an ESG and

Sustainability Director was appointed

who has executive responsibility for

the Group’s overall ESG framework. The

ESG and Sustainability Director leads

the ESG Forum, a cross-functional

forum through which ESG issues can

be managed and escalated to the

Risk and Sustainability Committee

asappropriate.

In 2023, climate-based targets will

be linked to executive remuneration

for the first time, with Initial targets

included covering the three pillars of

the ESG framework: Players, People,

Planet. As the ESG Committee of the

Board reviews the implementation of

the ESG strategy, it will consider the

appropriateness of these targets and

whether additional ESG metrics and

targets should be incorporated into

executive remuneration.

Strategy

Climate change is a key focus area

of our ESG framework. In 2021, we

set an ambitious climate goal to

reach net zero greenhouse gas

(GHG) emissions by 2035. For us,

‘net zero’ means ensuring that the

GHG emissions associated with our

business are reduced towards zero as

far as possible, with residual emissions

balanced by quality carbon removal

initiatives, thereby achieving a ‘net

zero’ position. Our data centres, retail

estate, offices, and business travel are

the main sources of our GHG emissions.

Our net zero strategy was first

published in the ‘Zero Carbon Report

2021’

. This year’s progress against

the 2021 net zero strategy and

development of 888’s transition plan is

published in the Zero Carbon Report

2022 found on our website.

Risk management

Climate-related scenario analysis was

conducted for the first time this year

to inform our climate-related strategy

and risk management. The climate-

related scenario analysis considers the

risks from transitioning to a low-carbon

economy or transition risks (which may

entail policy and legal, technology,

market, and reputational risks) and the

physical risks resulting from climate

change. Physical risks can be event

driven, such as extreme weather events,

or longer-term shifts in climate patterns.

The climate-related scenario analysis

demonstrates that the material risks

and opportunities the Group faces

from climate change include both

physical and transition risks in the

global markets in which we operate.

To respond to these risks, we will

take enterprise-wide action and

build resilience by managing the

physical (sites, supply chain) and

transition (market, policy & legal, and

reputational) risks and opportunities in

the value chain, through mitigation and

adaptation and business continuity

planning. We believe we already have

strong business continuity planning in

place after the impact of COVID-19,

and these foundations can be built on

as the climate challenge evolves.

Planet

888 Holdings PLC Annual Report & Accounts 202244

STRATEGIC REPORT

Based on the scenario analysis results,

climate was included in the Group’s

Risk Register for the first time this

year and the material climate-related

risks have been mapped against

other business risks according to

the materiality, nature, and size of

their impact.

ACQUISITION AND

DIVESTMENT ACTIVITY

In comparison with other sectors,

our overall environmental impact is

relatively low as our products are

largely virtual. Our carbon footprint

changed during 2022 as a result of our

acquisition of William Hill and the sale

of 888’s bingo business.

Welcoming William Hill into the Group

means our overall carbon footprint

has increased due to the brand’s large

UK retail estate and ten global offices

(William Hill has approximately 10,000

employees and over 1,350 shops).

The sale of 888’s bingo business had

an immaterial impact on the Group’s

carbon footprint as it involved the

transfer of only a small number of

employees at two existing sites.

Historically William Hill’s carbon footprint

has been carefully managed and

it has already started the journey

towards reaching net zero. In May

2022, WilliamHill achieved its goal

to become a certified carbon-

neutral business across Scope 1 and

2 emissions

. In 2022, smart meters

for electricity were fully installed

across the UK retail estate to enable

monitoring of energy usage and to

drive down energy consumption.

Theimpact on the Group’s GHG

emissions from acquiring William Hill’s

carbon footprint has therefore been

reduced for Scope 1 and 2 emissions.

The focus area for the transition plan is

therefore reducing William Hill’s Scope

3 emissions, with further detail included

in our Zero Carbon Report 2022.

Metrics and targets (set in 2021,

excluding William Hill)

• Net zero by 2030: 80%

reduction in

Scope 1 & 2 (2019 baseline).

• Net zero target across 888’s value

chain by 2035.

Against the net zero targets, 888

(excluding William Hill) achieved a

44% reduction in total Scope 1 and 2

(market-based) emissions from a 2019

baseline and a 29% reduction on prior

year. The material drivers for reducing

Scope 1 and 2 emissions on prior year

are the re-classification of emissions

to Scope 3 for subletting part of the

Israel office, reduction in energy use

in Gibraltar, cessation of the UK data

centre, and a reduction in energy

supplied to European data centres.

Across our wider value chain, 888

(excluding William Hill) achieved a 10%

reduction in Scope 3 emissions from

prior year mainly due to a reduction

in spend with high emitting suppliers

(spend-based assessment used)

and lower emission factors used in

the GHG accounting calculations.

Due to COVID-19 restrictions in place

during 2021, there is a significant

year on year increase in emissions

this year for business travel and

employee commuting, which have

been calculated for all offices this

year whereas last year only Israel was

included. Focusing on engaging with

suppliers to reduce Scope 3 emissions

will be a cornerstone of our transition

plan next year.

In 2023, William Hill’s emissions data

will be fully integrated, and we will

re-calculate the baseline values for

our net zero targets. Once we have

recalculated the baseline, we will

seek third-party validation over our

commitments and may consider third

party assurance of our emissions data.

We have made significant progress in

this area and we have been recognised

as such by the various ESG Ratings.

The business achieved an improved

rating of 34 in the CSA, up from 26 the

previous year and above the sector

average of 21.

Our CDP rating was B-, again improved

year on year and well ahead of

industry averages.

We also retained membership of the

FTSE4GOOD Series Index, achieving a

rating of 3.9/5. This is a high score for

a business in the Travel and Leisure

subsector, with high ratings achieved

across the social and governance

elements of the scoring.

Our AA rating was also maintained in

the MCSI ESG rating.

ALIGNMENT WITH THE TCFD

REPORTING FRAMEWORK

Overleaf we summarise the 2022

alignment with the TCFD reporting

framework, with further detail

included in the TCFD Report on

page 68. We are aligned with the

TCFD’s recommendations, subject

to the following areas, which need

further work due to the timing of the

acquisition of William Hill, and the

scenario analysis (completed Nov-22):

• Strategy, parts b) & c); and

• Metrics and Targets, parts a) & c).

Where our disclosure is not consistent

with TCFD recommendations, the

reasons for this are outlined in the full

TCFD Report and a plan is in place

to improve the maturity of the TCFD

reporting in future reporting periods.

NEXT STEPS IN 2023

As we move forwards as a

wider business our focus on our

environmental impact is clear. After

good progress in 2022, particularly

across our Scope 1 and Scope 2

emissions, we must re-examine our

climate targets, ensuring we are doing

the most we can to minimise our

carbon production. Scope 3 emission

reduction will become a focus and we

will work with our suppliers to ensure

that they have proactive plans inplace

to reduce their emissions.

We must also work to ensure we

effectively merge our climate data

groupwide to allow us to re-baseline

our targets for the new, larger business.

Once that has been achieved, we

will seek third party validation of

our climate commitments and may

consider third party assurance of our

emissions data.

We will also continue to work with

external ratings agencies to sense

check our progress across both

industry peers and other comparable

businesses as we work towards

reducing our environmental impact.

Planet

888 Holdings PLC Annual Report & Accounts 2022 45

STRATEGIC REPORT

TCFD OVERVIEW

888’S ALIGNMENT WITH THE TCFD FRAMEWORK

Disclosure Level: Full Partial Omitted

TCFD Recommendation Reference/Further work

Governance

a) Describe the Board’s oversight of climate-

related risks and opportunities.

• TCFD Report, page 68

• Governance, page 90

• Zero Carbon Report 2022, page 20

b) Describe management’s role in assessing and

managing climate related risks and opportunities.

Strategy

a) Describe the climate-related risks and

opportunities the organisation has identified over

the short, medium, and long term.

b) Describe the impact of climate-related

risks and opportunities on the organisation’s

businesses, strategy, and financial planning.

• TCFD Report, page 68

• Planet Pillar, ESG Report, page 44

• Zero Carbon Report 2022, page 14

• Further work is required to integrate the

outputs of the scenario analysis into the

business strategy and financial planning

cycles moving forward including developing

metrics to monitor climate-related risks and

potential financial impacts as required.

c) Describe the resilience of the organisation’s

strategy, taking into consideration different

climate-related scenarios, including a 2°C or

lower scenario.

• TCFD Report, page 68

• Further work is required on the consideration

of the potential impact of climate-related

issues on financial performance and position

across different climate scenarios, together

withsensitivity analysis.

Risk

Management

a) Describe the organisation’s processes for

identifying and assessing climate-related risks.

b) Describe the organisation’s processes for

managing climate-related risks.

• TCFD Report, page 68

• Risk Management section, page 56

• Zero Carbon Report 2022, page 18

c) Describe how processes for identifying,

assessing, and managing climate-related risks

are integrated into the organisation’s overall

riskmanagement.

Metrics

and Targets

a) Disclose the metrics used by the

organisation to assess climate-related risks and

opportunities in line with its strategy and risk

management process.

• TCFD Report, page 68

• Zero Carbon Report 2022, page 25

TheGrouphas started to qualify the

financial impact of climate-related risks, but

quantified scenario analysis needs to be

conducted.

b) Disclose Scope 1, Scope 2, and, if appropriate,

Scope 3 greenhouse gas (GHG) emissions, and

the related risks.

• Zero Carbon Report 2022, page 25

• ESG Supplementary Information, page 82

• In 2023, the Group will integrate William

Hill’s data, exclude 888’s bingo business

data, and re-calculate the baseline values

for its net zero targets. The Group may

also consider applying William Hill’s wider

environmental metrics to 888.

c) Describe the targets used by the organisation

to manage climate-related risks and opportunities

and performance against targets.

888 Holdings PLC Annual Report & Accounts 202246

STRATEGIC REPORT

47888 Holdings PLC Annual Report & Accounts 2022

Setting the platform for

future growth

CFO’S REPORT

SUMMARY

Reported revenue for the year was

£1,239m (+74%) with the main driver

being the completion of the acquisition

of William Hill on 1 July 2022. On a pro

forma basis revenue of £1,850m and

Adjusted EBITDA of £311m were both

in line with the guidance given at our

capital markets day in November 2022.

Alongside the transformation in our

revenue and earnings, our balance

sheet has significantly changed

following the acquisition, with the

predominantly debt-funded deal

leading to a highly leveraged balance

sheet with debt of £1.7bn and a net

debt to Adjusted EBITDA ratio of

5.6x at 31 December 2022. Given

the deterioration in debt capital

market conditions between signing

and completing the acquisition, the

ultimate structure of the William

Hill acquisition left the Group more

exposed to changes in interest rates,

which continued to increase through

the second half of 2022 following

completion. We were pleased to

successfully issue £347m equivalent of

new debt in December 2022 to repay

some of the initial deal financing, and

increase the level of hedging we have

in place such that approximately 70%

of interest is fixed for at least the next

three years.

Increased interest costs, the current

macroeconomic climate and the

impact of high inflation on the cost

base, is putting pressure on the profit

margins and cash generation of

the Group. This restricts our ability

to reinvest excess cash flow to

accelerate near term growth and

means our focus in the short term

is on improving profitability through

synergies and other cost savings

generated from the transformation and

integration programme. This will allow

us to enhance cash generation and

deleverage which is the key priority of

the Group.

The integration and transformation

programmes encompass both the

programme to integrate the William Hill

business into the 888 Group, unlocking

approximately £150m cash synergies

per annum, and wider transformation

initiatives across the combined Group

to drive efficiencies in operations.

The programme is expected to

continue until 2025, albeit many of the

initiatives are expected to complete

in 2023. There is an expected £100m

of cash costs to achieve synergies

expected to be incurred across the

integration programme; with the

expense expected to be greater than

this due to non-cash items, such as

impairments of software assets not

required as the technology stack of

the two businesses are integrated,

and costs associated with the wider

transformation programme.

As the Group executes these plans

to improve profitability margins and

deleverage, this will enable further

investment in the growth opportunities

available to the Group, in order to

achieve the key financial targets for

FY 2025 as outlined within the Capital

Markets Day in November 2022 and

which the Board remain confident in

achieving:

• Revenue of more than £2bn

• Adjusted EBITDA margin above 23%

• Leverage of less than 3.5x

• Adjusted earnings per share of

more than 35p

WE ARE VERY FOCUSED ON DELIVERING A LEANER, HIGHER MARGIN, MORE

EFFICIENT BUSINESS, THAT WILL DRIVE RAPID DE-LEVERAGING AND UNLOCK

THE STRONG POTENTIAL OF OUR BUSINESS

Our plan is improve

proﬁtability and ensure

we are really disciplined

with our capital

allocation, prioritising

debt reduction. This has

the potential to deliver

superior shareholder

returns with a target of

at least 35p of adjusted

EPS by 2025.

Yariv Dafna

Chief Financial Officer

888 Holdings PLC Annual Report & Accounts 202248

STRATEGIC REPORT

Reconciliation of Statutory EBITDA to Adjusted EBITDA, Adjusted profit before tax and Adjusted net profit

Adjusted results

Exceptional items

andadjustments Statutory results

2022

£'m

2021

£'m

2022

£'m

2021

£'m

2022

£'m

2021

£'m

Revenue 1,238.8 712.3 0.0 0.0 1,238.8 712.3

Cost of sales (440.4) (242.3) (0.1) (10.9) (440.5) (253.2)

Gross profit 798.4 470.0 (0.1) (10.9) 798.3 459.1

Marketing expenses (257.8) (222.6) 0.0 0.0 (257.8) (222.6)

Operating expenses (323.0) (127.7) (102.3) (19.2) (425.3) (146.9)

Share of post-tax profit of equity

accounted associate 0.3 0.0 0.0 0.0 0.3 0.0

EBITDA* 217.9 119.7 (102.4) (30.1) 115.5 89.6

Depreciation and amortisation (63.6) (26.4) (56.7) 0.0 (120.3) (26.4)

(Loss)/Profit before interest and tax 154.3 93.3 (159.1) (30.1) (4.8) 63.2

Finance income and expenses (73.8) (4.2) (37.1) 0.0 (110.9) (4.2)

(Loss)/Profit before tax 80.5 89.1 (196.2) (30.1) (115.7) 59.0

Taxation (16.3) (6.5) 11.4 (2.5) (4.9) (9.0)

(Loss)/Profit after tax 64.2 82.6 (184.8) (32.6) (120.6) 50.0

Basic earnings per share 15.1 22.2 (28.3) 13.4

* EBITDA is defined as earnings before interest, tax, depreciation and amortisation.

Adjusted EBITDA is defined as EBITDA excluding share based payment charges, foreign exchange losses and exceptional items and other defined adjustments.

Foreign exchange losses and share benefit charges were excluded to allow for further understanding of the underlying financial performance of the Group.

Furtherdetail on exceptional items and adjusted measures is provided in note 3 to financial statements.

In the reporting of financial information, the Directors use various APMs. These APMs should be considered in addition to, and are not intended to be a substitute

for, IFRS measurements. As they are not defined by International Financial Reporting Standards, they may not be directly comparable with other companies’ APMs.

The Directors believe these APMs provide additional useful information for understanding performance of the Group. They are used to enhance the comparability

of information between reporting periods and are used by management for performance analysis and planning. An explanation of our adjusted results, including

areconciliation to the statutory results is provided in note 3 to the financial statements.

Pro forma

2022

£'m

2021

£'m Change

Revenue 1,850.1 1,907.0 (3.0%)

Adjusted Cost of sales (599.2) (646.4)

Gross profit 1,250.9 1,260.6 (0.8%)

Marketing expenses (331.8) (433.0)

Adjusted operating expenses (608.7) (558.5)

Share of post-tax profit of equity accounted associate 0.2 0.8

Adjusted EBITDA 310.6 269.9 15.1%

* Pro forma information presented in the financial summary (including the associated narrative) is not part of the audit of financial information performed by the

Independent Auditor. These are defined on page 50.

In FY23 specifically, we currently

expect revenue to decline by low to

mid single digits but EBITDA margin,

on an adjusted basis, to improve to

greater than 20%. This is a significant

increase compared to the pro forma

adjusted EBITDA margin of 16.8% in

FY 2022, reflecting the realisation of a

large proportion of the synergies from

the acquisition.

In the UK market, we look forward to

the Gambling Act white paper and

subsequent level playing field that it

should bring, and are confident that

our leading brands and sustainable

recreational customer base will see us

succeed in this market. The acquisition

of William Hill has also meant the

Group is more diversified with a Retail

business and an improved position

internationally, in particular in our

core markets of Italy and Spain. This

creates a more sustainable business in

a changing regulatory environment.

Revenue for the first quarter of 2023

was £446m, representing an increase

of 168% on a reported basis and

decrease of 5% on a pro forma basis.

The reduction on a pro forma basis

reflects strong growth in retail of

+8%, more than offset by UK&I Online

being down 9% with the continued

impact of safer gambling changes,

and International Online being down

11% as a result of our refined market

focus and compliance changes in the

Middle East.

888 Holdings PLC Annual Report & Accounts 2022 49

STRATEGIC REPORT

SUMMARY CONTINUED

Pro-forma results

Given the significance of the

acquisition of William Hill midway

through the year, the statutory results

do not provide a clear comparison of

performance to the previous period as

they consolidate results of the William

Hill business for the second half of

the year in FY 2022. As such, in the

analysis below, focus is given to the

pro forma results showing a clearer

performance of the Group in FY 2022

compared to FY 2021.

Within these pro forma unaudited

results which do not form part of the

audited financial statements, the FY

2021 financials cover the 52 week

period from 30 December 2020 to 28

December 2021 for William Hill. Since

the acquisition, the William Hill business

has aligned to the monthly financial

calendar of the Group and, therefore,

the FY 2022 financials cover the

period from 29 December 2021 to 31

December 2022.

Change in presentation currency

The Group has changed the currency

in which it presents its financial results

from US Dollar to UK pound sterling

(GBP) with effect from 1 January 2022,

in consideration of the William Hill

acquisition and current business mix

which has now significantly higher

GBP exposure and with 888 US Dollar

denominated earnings a relatively

lower proportion of overall earnings.

The opening balance sheet and

comparatives have all been translated

and re-presented to GBP following this

change in presentational currency.

Segmental change

The Group has changed its operating

segments within the year to reflect

geographic divisions as opposed to

segments by product as disclosed in

previous years. This reflects the way

in which results are monitored and

reported in the enlarged Group.

Following the acquisition of

William Hill, the business has been

restructured to be managed as a

UK business, comprising UK Retail

and UK&I Online segments, and an

International business with both

supported by a Corporate centre. The

US business is disclosed within the

International segment and the Irish

business is managed within the UK&I

Online segment.

The results of the Bingo business that

was sold during the year are presented

within ‘Other’.

The comparatives have been

re-presented to display the results

inthese new reportable segments.

CONSOLIDATED INCOME

STATEMENT

Revenue

Revenue for the Group was £1,238.8m

for FY 2022 on a statutory basis; an

increase of 74% to FY 2021 of £712.3m

with the consolidation of William Hill

revenues across H2 2022.

On a pro forma basis, revenue was

£1,850.1m; a decrease of 3% compared

to £1,907.0m in FY 2021.

The decline in revenue primarily

reflects the additional player safety

checks implemented in the UK&I Online

business across both brands over

the previous two years with a 20%

reduction in UK&I Online revenue in FY

2022 compared to FY 2021.

The International business declined by

9%, mainly due to regulatory changes

across a range of markets, most

notably the impact of the Netherlands

business closing at the end of Q3 2021.

This is partly offset by a 54% increase

in Retail revenues driven by a full

year with a full Retail estate trading

compared to lockdowns and other

restrictions particularly across H1 2021.

Online sports betting revenue of

£363.1m reflected a decline of 24%,

and online gaming revenue of £968.0m

reflected a decline of 11%. Performance

across both products was principally

driven by the same factors as above,

with the decline larger in sports due to

country mix, with more of the sports

business being in the UK. Alongside this

FY 2022 had a tough comparator from

a sporting fixture perspective, with

2021 containing additional fixtures as

major football leagues caught up post

COVID-19 disruption.

Cost of sales

Cost of sales mainly comprise gaming

taxes and levies, commissions and

royalties payable to third parties,

chargebacks, payment service

provider ("PSP") commissions and

costs related to operational risk

management and customer due

diligence services. Cost of sales

has increased on a statutory basis

to £440.5m from £253.2m due to

the acquisition of William Hill. On

a pro forma basis, cost of sales

has decreased by 7.3% to £599.2m

reflecting the reduction in revenue, with

cost of sales representing 32.4% of

revenues (FY 2021: 33.9%).

Gross profit

On a statutory basis, gross profit has

increased to £798.3m from £459.1m

with the consolidation of the results

of William Hill for the second half

of FY 2022.

On a pro forma basis, gross profit has

decreased by 0.8% from £1,260.6m to

£1,250.9m but with an increase in the

gross margin from 66.1% to 67.6%.

Marketing expenses

Marketing is a significant investment

for our Group to drive growth through

investing in our leading brands, as

well as customer acquisition and

retention activities. On a statutory

basis marketing increased to £257.8m

compared to £222.6m in FY 2021 with

a marketing ratio of 20.8%, which

decreased from 31.3%, driven by the

inclusion of the retail business, which

has significantly lower marketing ratio.

On a pro forma basis, marketing

decreased by 23.4% from £433.0m

to £331.8m. Certain marketing is

demand driven and flexible so part

of the reduction is as a result of the

reduced revenue noted above, with

further marketing savings being

achieved following the acquisition with

a refined brand marketing strategy to

focus marketing on specific brands

in specific countries. The marketing

to revenue ratio has decreased

from 22.7% in FY 2021 to 17.9% in FY

2022. This partly reflects the mix of

revenue with more generated from the

Retail business where the marketing

investment is lower. Excluding the

Retail segment, the marketing ratio

decreased from 27.1% to 24.4%

reflecting the refined brand marketing

strategy.

Operating expenses

Operating expenses mainly comprise

employment costs, property costs,

technology services and maintenance

and legal and professional fees. On

a statutory level, operating expenses

increased to £448.5m from £160.2m

in FY 2021. This increase is due to the

acquisition of William Hill with the

Retail business having a much higher

proportion of operating expenses to

revenue given the employment and

property costs required to operate.

CFO'S REPORT CONTINUED

888 Holdings PLC Annual Report & Accounts 202250

STRATEGIC REPORT

On a pro forma basis, operating

expenses excluding depreciation

and amortisation have increased

by 9.0% from £558.5m in FY 2021 to

£608.7m in FY 2022. The main reason

for this increase is due to inflationary

pressures, in particular the impact

of utility cost inflation in the Retail

business.

Adjusted EBITDA

Reported EBITDA increased by 28.9%

from £89.6m to £115.5m. On an adjusted

basis, the increase was 82.0% to

£217.9m from £119.7m, with an increased

margin of 17.6% compared to 16.8%

in FY 2021.

On a pro forma basis, adjusted EBITDA

increased by 15.1% to £310.6m in FY

2022 compared to £269.9m in FY 2021.

The adjusted EBITDA margin increased

from 14.2% in FY 2021 to 16.8% in FY

2022 driven by the focus on cost

efficiency alongside the early benefits

of synergy delivery, particularly

marketing savings from the optimised

brand marketing strategy across

different markets.

Income statement by segment

The below table shows the Group’s performance by segment:

As reported

Revenue Adjusted EBITDA

2022

£'m

2021

£'m

Change from

year

% of

reported

Revenue

(2022)

2022

£'m

2021

£'m

Change from

year

% of

Adjusted

EBITDA

(2022)

Retail 255.5 — 20.6% 41.2 — 18.9%

UK&I Online 455.5 255.2 78.5% 36.8% 61.6 7.7 700.0% 28.3%

Total UK 711.0 255.2 178.6% 57.4% 102.8 7.7 >1,000% 47.2%

International 508.3 410.4 23.9% 41.0% 118.3 114.1 3.7% 54.3%

Other 19.5 46.7 (58.2%) 1.6% 1.7 7.3 (76.7%) 0.8%

Corporate — — — — (4.9) (9.4) (47.9%) (2.2)%

Total 1,238.8 712.3 73.9% 100.0% 217.9 119.7 82.0% 100.0%

Pro forma

Revenue Adjusted EBITDA

2022

£'m

2021

£'m

Change from

year

% of

reported

Revenue

(2022)

2022

£'m

2021

£'m

Change from

year

% of

Adjusted

EBITDA

(2022)

Retail 519.0 336.8 54.1% 28.1% 90.7 0.3 >1,000% 29.2%

UK&I Online 717.4 898.9 (20.2)% 38.8% 111.9 165.2 (32.2)% 36.0%

Total UK 1,236.3 1,235.6 0.1% 66.8% 202.6 165.4 22.5% 65.2%

International 613.7 671.4 (8.6)% 33.2% 136.0 147.5 (7.8)% 43.8%

Other — — — —

Corporate — — (28.1) (43.0) (34.7)% (9.0)%

Total 1,850.1 1,907.0 (3.0)% 100.0% 310.6 269.9 15.1% 100.0%

For the commentary on divisional performance below, the focus is given to the pro forma financials in order to give a clearer

comparative of performance compared to the previous period. Furthermore, it reflects adjusted results, since that is the basis

on which these are reported internally and in our segmental analysis. An explanation of our adjusted results, including a

reconciliation to the statutory results, is provided in note 3 to the financial statements.

888 Holdings PLC Annual Report & Accounts 2022 51

STRATEGIC REPORT

UK&I Online

On a statutory basis, revenue

increased by 78.5% to £455.5m and

Adjusted EBITDA increased by £53.9m

compared to the previous period.

On a pro forma basis, revenue declined

by 20.2% to £717.4m mainly due to

the additional player safety measures

implemented across 888 and William Hill

brands across the previous two years.

In addition to this there was a positive

substitution impact from Retail in the UK&I

Online business in the first months of 2021

during the lockdown in the UK. Pro forma

adjusted EBITDA has declined by £53.3m

or 32.2% with the Adjusted EBITDA margin

declining as a result of a high fixed cost

base, which is being addressed through

the integration programme.

Retail

On a statutory basis, Retail generated

revenue of £255.5m and Adjusted

EBITDA of £41.2m as the Retail business

continued to deliver robust financial

performance and strong cash

generation following its re-opening.

On a pro forma basis, revenue

increased by 54.1% to £519.0m as 2022

was a return to a full year of trading

with a lockdown until April 2021 in the

prior year. Pro forma adjusted EBITDA

increased by £90.4m to £90.7m in FY

2022, again reflecting the increased

profitability from a full year of an open

trading Retail estate. At the same time

the Retail estate had a particularly

large impact from the inflationary

pressures and specifically rising utilities

costs in FY 2022.

There were 1,386 shops open at the end

of FY 2022 compared to 1,407 at the

end of FY 2021. The small reduction to

the already well optimised estate largely

reflects the impact of inflationary cost

increases making certain shops no

longer commercially viable.

INTERNATIONAL

On a statutory basis, the International

business revenue increased by 23.9%

to £508.3m and Adjusted EBITDA

increased by £4.2m compared to the

previous period.

On a pro forma basis revenue declined

by 8.6% to £613.7m, in part due to the

closure of the Netherlands market in

September 2021, as well as additional

regulatory impacts and other smaller

market closures. The two core markets

within the International business, Italy

and Spain, were both flat compared

to 2021. Pro forma adjusted EBITDA

declined by £11.5m to £136.0m with

the Adjusted EBITDA margin declining

as a result of a high fixed cost base,

which is being addressed through the

integration programme.

Within the International business, the

US business revenue was £20.4m, an

increase of 27% compared to the

previous period. Adjusted EBITDA was a

loss of £12.3m in the period compared

to a loss of £12.1m in the previous

period with the continued investment in

marketing and other costs to grow the

business.

CORPORATE COSTS

On a statutory basis, corporate costs

were £4.9m in FY 2022 compared to

£9.4m expense in FY 2021. This is due

to the timing of the release of staff

incentive accruals across the Group

including those accrued prior to

acquisition within William Hill.

On a pro forma basis, there was

a reduction in corporate costs of

£14.9m to £28.1m due to the removal

of staff incentive accruals for FY 2022

compared to FY 2021 and certain

synergies being generated through the

integration programme.

Exceptional items and Adjustments

2022

£'m

2021

£'m

Exceptional items

Retroactive duties and associated charges (3.9) 4.2

Acquisition related costs 24.5 10.9

Transformation costs 14.4 2.2

Disposal of 888 Bingo 11.7 —

Impairment of US Goodwill and other assets 55.7 —

Revaluation of deferred consideration (9.2) —

Total exceptional items before interest and tax 93.2 17.3

Bond early redemption fees 14.1 —

Gain on settlement of bonds (7.1) —

Total exceptional items before tax 100.2 17.3

Tax on exceptional items 2.8 2.5

Total exceptional items 103.0 19.8

Adjustments

Amortisation of finance fees 7.4 —

Amortisation of acquired intangibles 56.7 —

Foreign exchange 26.7 6.7

Share benefit charge 5.2 6.1

Total adjustments before tax 96.0 12.8

Tax on adjustments (14.2) —

Total adjustments 81.8 12.8

Total exceptional items and adjustments 184.8 32.6

CFO'S REPORT CONTINUED

888 Holdings PLC Annual Report & Accounts 202252

STRATEGIC REPORT

Total exceptional items in the year

were £103.0m in FY 2022 compared to

£19.8m in FY 2021.

Exceptional items are defined as those

items which are considered to be one-

off or material in nature to be brought

to attention to better understand the

Group’s financial performance. Refer to

note 3 to the financial statements for

further detail.

There were £24.5m of costs incurred to

complete the acquisition of the William

Hill business, predominantly comprising

adviser fees.

Furthermore, £14.4m of costs were

incurred relating to the on-going

transformation and integration of the

William Hill business. This includes

£12.5m of cash costs incurred to

achieve synergies, which is still

expected to total £100m across the

integration. There were also £1.9m

of additional transformation costs

relating to a restructure of the Retail

operating model to drive further

efficiencies, albeit these efficiencies

are not classified as synergies.

The transformation and integration

programme is expected to take three

years until 2025 and is currently

expected to generate synergies of

approximately £150m, an increase of

£50m over our initial target.

During the year, as part of the

annual impairment review, the Group

has impaired the goodwill of its US

business. As such, the goodwill of the

US business has been impaired in full,

totalling £25.7m. In addition to this

there were non-cash impairment costs

of £30.0m relating predominantly

to the write off of software acquired

with the William Hill business that is

not planned to be used by the Group

following the decision to use the

existing 888 platform as the Group’s

platform going forward.

We completed the sale of the Bingo

business to Saphalata Holdings

Ltd., a member of the Broadway

Gaming Group, for a total cash

consideration of £37.4m with the loss

on disposal of £11.7m recognised as an

exceptional item.

As a part of the transaction agreement

with Caesars for the purchase of

William Hill, an amount of up to £100m

consideration was deferred subject

to the enlarged group hitting specific

EBITDA metrics. This was fair valued

on acquisition at £9.6m and revalued

at the year-end date to £0.4m,

leading to a release in this contingent

consideration of £9.2m.

The final operating exceptional item

was a credit of £3.9m relating to

the reversal of previous regulatory

provisions after a settlement of a

specific liability relating to Spain;

with the credit recognised as

an exceptional item to ensure a

consistent accounting treatment to the

recognition of the original provision.

There were also £7.0m of non-

operating exceptional items within

finance costs. This reflects £14.1m

of costs associated with the early

settlement of the William Hill Senior

Unsecured Notes representing

early redemption fees and the the

accelerated write off of unamortised

finance fees, offset by a credit of £7.1m

representing the reduction in value on

settlement of the William Hill Senior

Unsecured Notes compared to the fair

value recognised on acquisition.

Adjustments were those items that

are recurring items that are excluded

from internal measures of underlying

performance in order to provide clear

visibility of the underlying performance

across the Group. They are items

that are therefore excluded from

Adjusted EBITDA, Adjusted PAT and

Adjusted EPS.

The amortisation of the specific

intangibles assets recognised on

acquisitions has been presented as an

adjusted item, totalling £56.7m relating

to the William Hill acquisition. This

amortisation is a recurring item that

will be recognised over its useful life.

The other items that have been

presented as adjusted items are

foreign exchange losses of £26.7m

(£6.7m in FY 2021), share based

payment charges of £5.2m (£6.1m in FY

2021) and amortisation of finance fees

of £7.4m (£nil in FY 2021).

FINANCE INCOME AND

EXPENSES

Net finance expenses of £110.9m

(2021: £4.2m) related predominantly

on the interest expense from the

debt on acquisition of William Hill

(£75.0m). There were also exceptional

net finance charges of £7.0m related

to the bond early redemption fee

and gain on settlement of bonds as

explained within Exceptional items

and Adjustments section above.

The finance expense resulting from

operating leases was £3.0m (2021:

£0.9m) with the increase due to the

acquired Retail business within William

Hill and the finance expense from

hedging activities was £3.3m.

PROFIT BEFORE TAX

The net loss before tax for 2022 was

£115.7m (2021: net profit before tax of

£59.0m). On an adjusted basis, profits

decreased by 10% to £80.5m (2021:

net profit before tax of £89.1m) with

the increased financing costs from

the debt on acquisition of William Hill

offsetting the increased earnings from

the enlarged Group.

TAXATION

On a statutory basis, the Group

recognised a tax charge of £4.9m on

a loss before tax of £115.7m, giving

an effective tax rate of 4.2% (2021:

tax charge of £9.0m and an effective

tax rate of 15%). The tax charge and

therefore the tax rate is higher than the

expected tax credit arising on the loss

of 19% primarily due to the lack of tax

relief on exceptional costs associated

with the acquisition of William Hill and

which is offset by prior year credits

in respect of additional tax relief

obtained on interest costs.

On an adjusted basis, the Group

recognised a tax charge of £16.3m on

a profit before tax of £80.5m, giving

an effective tax rate of 20.2%. (2021:

tax charge of £6.5m and an effective

tax rate of 7%). The tax charge and

therefore the tax rate is broadly in line

with the expected tax rate of 19%.

The Group’s adjusted effective tax rate

for 2023 is now expected to be c8%.

888 Holdings PLC Annual Report & Accounts 2022 53

STRATEGIC REPORT

NET (LOSS)/PROFIT AND

ADJUSTED NET PROFIT

The net loss for 2022 was £120.6m

(2021: net profit of £50.0m). On an

adjusted basis, profits decreased to

£64.2m from £82.6m in 2021.

EARNINGS PER SHARE

Basic earnings per share decreased

to a loss of 28.3p (2021: profit of 13.4p)

as a result of the reduction in net

profits in 2022 predominantly due to

the exceptional items surrounding

transaction and transformation

related costs.

On an adjusted basis, basic earnings

per share decreased by 32% to 15.1p

(2021: 22.2p). Further information on

the reconciliation of earnings per share

is given in note 10 to 2022 financial

statements.

DIVIDEND

The Board of Directors is not

recommending a dividend to be

paid in respect of the year ended

31December 2022 (2021: 3.2p per

share), in light of the Board’s decision

to suspend payments of dividends until

leverage is at or below 3x, as previously

announced following the acquisition.

ACCOUNTING FOR THE

ACQUISITION OF THE WILLIAM

HILL BUSINESS

As part of the accounting for the

£1.95bn acquisition of the William Hill

business, it is necessary to allocate the

acquisition value between acquired

assets and liabilities. As such the

Group have valued the acquired assets

and liabilities of William Hill to fair value

as at the 1 July 2022 acquisition date.

This has led to the recognition

of certain separately identifiable

intangible assets on the consolidated

statement of financial position of the

Group in addition to other fair value

adjustments on other recognised

assets and liabilities.

The separately identifiable intangible

assets include the value of the William

Hill brand of £574.4m, the value of

customer relationships of £595.1m

and £8.5m in respect of licences.

These assets are amortised, with

the amortisation recognised as an

Adjusting item within Exceptional

items and Adjustments to aid further

understanding of the underlying

financial performance of the Group.

The remaining value of the transaction

after recognising the fair value of all

identifiable assets and liabilities has

been allocated to goodwill, with the

value of £785.6m recognised. This

goodwill value represents a number of

factors such as the future growth of

the William Hill business, potential to

achieve buyer specific synergies and

the value of the workforce.

CONSOLIDATED STATEMENT

OF FINANCIAL POSITION

The consolidated statement of

financial position consolidated the

acquired William Hill business from

1 July 2022 and as such there are

significant differences in the 31

December 2022 position compared to

the 31 December 2021. Note 16 to the

financial statements shows the assets

and liabilities acquired which explain a

majority of the differences.

Non-current assets increased by

£2,297.2m to £2,457.1m compared to

£159.9m at FY 2021, predominantly due

to assets recognised on the acquisition

of the William Hill business of £2,614.8m

including goodwill (£785.6m); brand

(£574.4m); customer relationships

(£595.1m); licences (£8.5m); software

and technology (£226.2m); property,

plant and equipment (£109.5m); right

of use lease assets (£72.3m) and

investments and associates (£40.0m).

Within the period there were material

impairments relating to the US B2C

business of £25.7m, due to changing

market and economic conditions

leading to a revised strategy in the US

business and an increased discount

rate driving an impairment. In addition

to this there were non-cash impairment

costs of £30.0m relating predominantly

to the write off of software acquired

with the William Hill business that is

not planned to be used by the Group

following the decision to use the

existing 888 platform as the Group’s

platform going forward. Within this

£28.1m specifically related to the

impairment of the Unity platform that

had been under development within

William Hill.

Current assets are £494.4m, an

increase of £254.2m compared to

£240.2m at FY 2021. Within this cash

and cash equivalents has increased

to £317.6m from £189.4m, although this

includes £141.3m of client funds held

compared to £60.1m at FY 2021 due

to the additional client liabilities in the

William Hill business. Excluding client

funds, cash and cash equivalents have

increased by £47.0m from £129.3m in

FY 2021 to £176.3m in FY 2022.

Total current liabilities have increased

by £451.5m from £251.9m at FY 2021 to

£703.4m at FY 2022. This includes the

increase of client funds held and the

trade and other payables acquired on

acquisition of the William Hill business

of £382.3m. Provisions have increased

to £111.5m from £19.0m. This includes

the current portion of the provision for

customer claims, as well as a provision

of £19.2m for the regulatory settlement

agreed between William Hill and the

GB Gambling Commission. There are

then additional provisions of £61.7m

for gaming tax in Austria; £2.0m of

provisions relating to shop closure

costs and £3.7m of restructuring costs.

Non-current liabilities are £2,088.9m, an

increase of £2,065.2m to the balance

of £23.7m in FY 2021. This increase

is predominantly due to funding the

acquisition of William Hill of £1,697.5m.

In addition, the deferred tax liability

has increased by £218.5m mainly

driven from the acquisition accounting

and the lease liabilities have increased

by £46.9m with the acquisition of

the Retail estate in William Hill. This

includes the non-current portion of

the provision for customer claims

of £86.2m, predominantly in Austria

and predominantly recognised on

acquisition of William Hill as part

of acquisition accounting where

previously held contingent liabilities

were recognised on the statement

of financial position in line with the

business combinations accounting

standards.

Net assets of £159.2m is an increase

of £34.7m compared to £124.5m at

FY 2021. The equity includes the net

proceeds of £158.5m from the share

issue in April 2022 to partly fund the

acquisition of the William Hill business.

CFO'S REPORT CONTINUED

888 Holdings PLC Annual Report & Accounts 202254

STRATEGIC REPORT

Cash flows

2022

£'m

2021

£'m

Cash generated from operating activities before working capital 139.6 98.0

Working capital movements (169.8) (1.4)

Net cash (used in)/generated from operating activities (30.2) 96.6

Acquisitions (386.8) —

Disposals 33.0 —

Capital expenditure (76.8) (23.0)

Net movement in borrowings incl loan transaction fees 527.6 —

Proceeds from equity placing 158.5 —

Interest paid (75.6) (0.5)

Dividends paid — (43. 8)

Other movements in cash incl FX (21.5) (2.9)

Net cash inflow 128.2 26.4

Cash balance at 31 December 317.6 189.4

Gross Debt (1,815.0) 0.0

Net Debt (1,727.7) 106.4

Overall the Group had a cash inflow

of £128.2m in the year, compared to

an inflow of £26.4m in FY 2021. This

resulted in a cash balance of £317.6m

as at 31 December 2022 (£189.4m

at 31December 2021) although this

included client funds and other

restricted cash of £141.3m such that

unrestricted cash available to the

Group was £176.3m compared to

£129.3m in FY 2021.

The cash inflow in the year

predominantly reflected the financing

for and acquisition of the William Hill

business. The inflows from the net

borrowings after payment of loan

transaction fees and the refinancing

of the debt within the William Hill

business was £527.6m coupled with

the proceeds from the equity issue

in April 2022 of £163m, before fees

with net proceeds of £158.5m. The

acquisition of William Hill was for a

cash equity value of £386.8m, net of

cash acquired, which nets to an inflow

of £299.3m. Cash interest payments on

the borrowings were £75.6m.

The disposal of the Bingo business to

Saphalata Holdings Ltd., a member

of the Broadway Gaming Group,

generated cash of £37.4m with

£0.5m generated from the sale of

property, plant and equipment in the

Retail business.

Cash flow from operations was a

£30.2m outflow compared to an inflow

of £96.6m in FY 2021. This reduction

was partly due to significant working

capital outflows in the period coming

from the acquired balance sheet from

William Hill and the exceptional items

in the year causing a statutory loss

before tax as well as a reduction of

staff incentive accruals and reduced

marketing spend driven from the brand

marketing synergies.

DEBT

2022

Borrowings (1,702.3)

Loan transaction fees (112.7)

Gross Borrowings (1,815.0)

Lease liability (89.0)

Cash (excluding customer balances) 176.3

Net Debt (1,727.7)

EBITDA 310.6

Leverage 5.6x

The gross borrowings balance as at

31 December 2022 was £1,815.0m. The

earliest maturity of this debt is in 2026,

which is £11m, with the vast majority

of the debt maturing across 2027 and

2028. In addition to this, the Group has

access to a £150m Revolving Credit

Facility maturing in January 2028,

which is currently undrawn.

The debt is across GBP sterling; Euro

and US Dollar with 50% of the debt

in Euro; 43% in GBP and 7% in USD.

The Group have undertaken hedging

activities such that 70% of the interest

costs is at fixed costs and 30%

at floating rates with the hedging

relationships in place for three years.

The net debt balance at 31 December

2022 was £1,727.7m with a net debt to

EBITDA ratio of 5.6x. The Group has the

target to bring this down to less than

3.5x by FY 2025.

Yariv Dafna

Chief Financial Officer

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 55

STRATEGIC REPORT

RISK MANAGEMENT

INTRODUCTION

Following the acquisition of William

Hill, the Board took an important

strategic decision to create the new

role of ChiefRisk Officer. This helps

put the culture of risk management

and compliance truly at the heart of

its activities and drives continuous

improvement in risk management best

practice across the business.

Our top priority is to ensure the

long-term stability and success

of the business, and effective risk

management plays a critical role in

achieving this goal. We continue to

operate in a dynamic and challenging

environment with macroeconomic,

political and social uncertainties,

increasingly demanding regulatory

obligations and, a competitive

landscape needing innovation within

product and content leadership.

While the business continues to take its

regulatory and compliance obligations

very seriously, aiming for minimal risk

exposure, we are prepared to take

risks in other areas, where we can

create value through selective risk

taking in accordance with our risk

appetite. A condition is that we have

the necessary tools and capability to

effectively manage the exposure.

A critical part of my role will be

to ensure we continue to invest in

resources to build a sustainable

business and adapt to the changing

regulatory and competitive landscape,

while ensuring we continuously strive to

improve risk management processes

and policies, fostering a culture of

transparency and accountability.

During 2022 the risk profile of the

Group was impacted by both the

acquisition of William Hill and the

sale of the B2B and B2C bingo

operations. The sale of the bingo

business reduced the Group’s

dependency on B2B relationships,

and thereby its partnership risk,

as well as reducing regulatory and

technologicalcomplexity.

The acquisition of William Hill gave rise

to certain risks to which the Group had

not previously been exposed, such as

risks around the acquisition financing,

integration, and operating an estate

of LBOs in the UK. Alongside this there

were areas of risk to which the Group’s

exposure materially increased, such as

regulatory risks and increased sports

betting exposure.

The Group issued a prospectus dated

29 April 2022, which is available on

our website, and which sets out in

detail the assessment of the risks to

which the Group is exposed following

completion of the acquisition.

Early in 2023 we saw the benefits ofour

enhanced compliance culture and

processes when it was self-identified

by the compliance team that certain

best practices had not been followed

regarding KYC and AML for certain

888 VIP customers in the Middle East.

The ensuing actions we have taken

reflect the proper functioning of the

Group’s enhanced compliance culture

and serve as a good example of

what a proactive approach to risk

management looks like. Theprocess

of reopening accounts is based on

an assessment of customer accounts,

policies, procedures and controls

against the company’s developed

compliance standards and alignment

with industry best practice, rather than

limiting ourselves just to compliance

with the legal and regulatory

requirements applicable inGibraltar.

OUR TOP PRIORITY IS TO ENSURE THE LONG-TERM STABILITY AND SUCCESS OF

THE BUSINESS, AND EFFECTIVE RISK MANAGEMENT PLAYS A CRITICAL ROLE IN

ACHIEVING THIS GOAL

The effective

understanding,

measurement,

acceptance, and

mitigation of risk is

fundamental to the

Group achieving its

strategic priorities.

Harinder Gill

Chief Risk Officer

Improving

sustainability

888 Holdings PLC Annual Report & Accounts 202256

STRATEGIC REPORT

KEY SUCCESSES IN 2022

• Addressing player protection and safer gambling:

A culture of player safety and sustainability is being

established while maintaining competitive advantage

and achieving operational excellence.

• Strengthened AML framework: Enhancements have

been made to strengthen the AML risk assessment

framework as the business seeks to develop a

unified approach across the merged entities and the

jurisdictions within which it operates.

• Management governance and oversight: The

Group has improved governance oversight with the

introduction of an Executive Risk & Sustainability

Committee, which is chaired by the Chief Risk Officer

and enhances second-line of defence oversight.

KEY PRIORITIES FOR 2023

• Continuing compliance with regulations and industry

standards: The growing complexity of the Group’s

regulatory footprint means a robust understanding

of the legal and regulatory position in key locations

worldwide is crucial to mitigating this risk, combined

with strong relationships with regulators. The Group

continues to engage routinely with independent legal

advisers and specialist third parties to review our

internal risk and control framework andrelated operations.

• Strengthening the Group’s risk management

processes: The Group continues to focus on the

development and embedding of an enterprise risk

management framework, including investing in a

Governance, Risk and Compliance ('GRC') system and

a broader and more extensive compliance monitoring,

testing and evaluationprogramme.

• Managing and mitigating emerging risks: As the

business and economic environment continues to

evolve, the business must stay attuned to new and

emerging risks that may impact the organisation.

Thisincludes risks related to the regulatory landscape,

technology and cyber security, geopolitical

instability, and more.

• Solidifying a strong risk culture: Ensuring risk

management is understood and prioritised by every

employee as the business continues to promote

accountability and ownership and encourage risk

reporting and transparency.

In the following risk report, we detail our approach to risk management and seek to explain the principal risks and uncertainties

in our business and how these risks are managed, with the aim of ensuring the Group maintains an appropriate risk profile.

888 Holdings PLC Annual Report & Accounts 2022 57

STRATEGIC REPORT

RISK MANAGEMENT STRATEGY

The effective understanding,

measurement, acceptance and

mitigation of risk is fundamental to

the Group achieving its strategic

priorities. The Group’s approach to its

risk management strategy is strongly

focused on improving its ability to

identify, evaluate, monitor and manage

its principal risks as well as responding

to the challenges presented by new

and emerging risks.

The risk management strategy is

underpinned by a robust governance

structure and a culture of transparency

and accountability. It involves:

• Having a comprehensive risk

management plan in place to

identify and assess potential risks,

including emerging risks, as well

as the implementation of controls

to mitigate, manage or avoid

adverse impacts;

• The continuous monitoring,

assessment, and review of risks

to ensure they are kept at an

acceptable level, including financial

risks to ensure the company can

withstand market fluctuations

and unexpected events, such as

economic downturns;

• The implementation of strict

compliance and regulatory

measures to ensure the company

is compliant with relevant laws

andregulations;

• Having a crisis management plan

in place to respond to unexpected

events, such as natural disasters

or security breaches, to minimise

damage and quickly return to

normal operations;

• Effective communication and

training provided to all employees

to ensure they understand their

role in identifying and managing

risks; and

• Staying abreast of industry trends,

competitor activities and market

conditions to make informed

decisions and adapt to changes

within the operating environment.

The Group is committed to maintaining

a culture of risk awareness and

continuous improvement in its risk

management practices.

RISK APPETITE

The organisation is committed to

achieving its strategic objectives,

maintaining a strong focus on risk

management. The business recognises

that taking on certain levels of risk is

necessary to achieve its goals, but it

also understands the importance of

managing these risks effectively.

The Group’s risk appetite is to take

on calculated and manageable risks

that are aligned with the strategic

objectives and that the business

has the capabilities to mitigate. The

company will not take on risks that

could have a material impact on the

Group’s ability to achieve its objectives

or that could threaten its viability.

The risk appetite encapsulates both

financial, such as credit, market and

operational risk, and non-financial

risks such as regulatory, reputational,

and environmental and social risks. It

is formally articulated through the Risk

Appetite Statement (RAS) and consists

of both qualitative statements and

quantitative metrics.

The following principles guide

the Group’s overarching appetite

for risk and determine how these

are managed:

STRATEGIC

• The Group’s strategic goal is to

grow earnings per share and

deleverage, underpinned by the

strategic priorities of integrating

William Hill and a disciplined market

focus. Whilst the business has a low

appetite to risks that jeopardise its

brand and reputation, where it has

discretion, the business is willing to

assume more risk to remain agile

in meeting the challenges of an

evolving business, and a changing

external and regulatory landscape.

• The company is dedicated to

building a sustainable business

for the future and the Group has

a low tolerance to risks that could

disrupt the critical foundations

of its strategy encompassing its

people, players, planet and the core

governance that underpins these.

FINANCIAL POSITION

• The Group aims to deliver on its

growth plans by focusing on a

small number of the most attractive

global markets and by driving

higher margins through synergies

and optimisation of its business and

operating model.

• The business aims to maintain

a strong capital, liquidity and

funding position by ruthless focus

on capital efficiency, with our

capital allocation plans centred

on prioritising debt reduction

anddeleveraging.

OPERATIONAL ACTIVITIES

• The business aims for a more

cost-efficient operating model by

generating returns in line with its risk

appetite and focusing on delivering

synergies through evaluating cost

of sales, marketing and other

operating costs.

• The Group expects its people to

uphold the highest ethical and

legal standards, encouraging

employees to act with integrity

and to act in accordance with the

law. The Group therefore has zero

tolerance for deliberate attempts to

defraud, misappropriate property

or circumvent regulations, law or

company policies or procedures.

• As an online B2C and B2B business,

the availability and integrity of 888

Holdings IT infrastructure is crucial

to the supply of its offerings and

compliance with its regulatory

obligations and to the maintenance

of customer loyalty. The business

therefore has a low appetite for

technology failure or disruption

due to outage, degradation and/

or inaccurate data being consumed

by the Company, which could

cause significant impact to core

businessactivities.

• Understanding customer needs

and building product, marketing,

and offers to create the best

experiences possible is critical to

business growth plans. A key part

of the Group’s relentless focus on

customer experience is delivering

quick and effective customer

service and creating the safest

possible gambling experience.

RISK MANAGEMENT CONTINUED

888 Holdings PLC Annual Report & Accounts 202258

STRATEGIC REPORT

REGULATORY COMPLIANCE

• The Group’s markets operate in an

increasingly complex regulatory

environment. The business continues

to invest in its Risk and Compliance

function to ensure compliance with

applicable laws and regulations.

• The business takes its AML and

CTF responsibilities very seriously

and has a rigorous risk assessment

framework with direct oversight by

the Board. It is important to us to

unify the risk assessment processes

across the entities and jurisdictions

that we operate in.

• Player safety is at the heart of

what the business does, and we

strive to embed this in products

and customer experience, using

data and analytical insights to drive

continuous improvement.

EMERGING RISKS

Emerging risks are new and developing

risks that are often difficult to quantify

but may materially affect the

operations of the business. These are

usually uncertain risks external to the

business or which relate to changes

in the markets in which the Company

operates. The Group takes a proactive

approach to managing them, with the

objective of mitigating their impact on

the delivery of its strategy. Examples of

emerging risks include global economic

changes, the ongoing war in Ukraine,

technological advancement, and

climate change.

888 Holdings PLC Annual Report & Accounts 2022 59

STRATEGIC REPORT

GOVERNANCE

The risk management governance

framework to oversee and manage all

business activities includes specific

roles, responsibilities, and decision-

making processes. It ensures that the

company’s risk management strategy

is being implemented effectively and

efficiently and that the risk strategy is

aligned with overall company goals and

objectives. Our three lines of defence

model consists of three distinct lines

of responsibility and provides a clear

and transparent risk management and

reporting framework to support the

board in its oversight responsibilities.

An overview of the Group's risk

management governance structure

along with key responsibilities is

outlined right.

BOARD OF DIRECTORS

EXECUTIVE RISK AND SUSTAINABILITY COMMITTEE

DIVISIONAL COMMITTEES AND FORUMS

BOARD AUDIT COMMITTEE BOARD ESG COMMITTEE

BOARD OF DIRECTORS

The Board of Directors is responsible for

approving and aligning the company’s

strategic objectives with its risk appetite

and overseeing the effectiveness of

the risk management framework. This

includes reviewing and approving

the Company’s risk management

and internal controls system, policies

and practices as well as reviewing

management reports on the company’s

risk profile and mitigating factors.

BOARD AUDIT COMMITTEE

The Board Audit Committee has overall

responsibility for ensuring that the Group

maintains a sound system of internal

control. It develops and maintains an

approach to assess the adequacy of

risk management that incorporates risk

appetite and tolerance, the framework

within which risk is managed and the

responsibility and procedures pertaining

to the application of the policy.

BOARD ESG COMMITTEE

The Board ESG Committee will provide

Board-level oversight of 888’s ESG

strategy, targets and progress against

key performance indicators.

EXECUTIVE RISK AND

SUSTAINABILITY COMMITTEE

The Executive Risk Committee was

introduced in 2022 to oversee the

implementation and effectiveness of

the risk management framework, and

expanded its role to include additional

Sustainability duties. The Committee

provides appropriate executive

management oversight to support

the Board in managing principal and

emerging risks to its long-term strategic

objectives, including its impact on

environment, social and governance

issues as part of its sustainability

strategy. The Committee will monitor the

Company performance against Board

risk appetite, review the effectiveness

of the Company’s risk management

framework and ensure risk management

decisions are aligned to long term goals.

DIVISIONAL COMMITTEES

AND FORUMS

Committees and Forums are either

already in / being put in place with

delegated authority from the Executive

Risk and Sustainability Committee

to support the Group Chief Risk

Officer in exercising specific risk

management responsibilities. Dedicated

Committees include, a Financial Crime

Committee, Compliance Committees,

Data Governance forum and other

forums related to delivering specific

change initiatives following internal or

external reviews.

RISK MANAGEMENT CONTINUED

888 Holdings PLC Annual Report & Accounts 202260

STRATEGIC REPORT

Trend

Increase Decrease Stable

Risk level

Low Moderate High

Risk Category Risk Summary

Links to

strategy

Potential

Impact

Trend from

prior year

Strategic

risks

Reputational

Risk that the business’s brand and image

is adversely impacted by compliance or

operational weaknesses

2, 3, 4

ESG

Risk that the business does not meet

its environmental, sustainability or

governanceobjectives

Financial

risks

Market Risk

Risk of poor liquidity, debt management

or FX fluctuations that lead to issues with

suppliers and lenders, increased costs and

reduced profitability

3, 5

Taxation

Risk that taxes and duties increase the

Group’s cost base impacting profitability

3, 5

Operational

risks

People

Risk that the business fails to retain key

colleagues or recruit sufficient experienced

employees to achieve its targets and objectives

All

Integration

Risk that the integration of William Hill

will not deliver all or substantially all the

expected benefits and against the expected

delivery timelines

1,2,3,5

N/A

Cyber &

Technology

Risk of cyber-attacks or technology failures

leading to reduction in availability of services

and/or disruption to core operations and

customer access to our products and services

All

Partnership

Risk that contractual obligations are

notmet to/from strategic partnerships or

suppliers impacting the long-term viability

ofouroperations

All

Regulatory

and

compliance

risks

Regulatory and

Compliance

Developments

Risk of changes in regulations and laws that

can impact the organisation's operations

and financial performance or risk of failure

tomeet our compliance obligations

All

Data Protection

and e-privacy

Risk that personal data processes are

determined to be in contravention of data

protection regulations or risk of unauthorised

access to or loss of customer, employee, or

other stakeholder data

All

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties that are considered to have a potentially material impact on the Group’s future

performance, sustainability and strategic objectives are set out on the following pages, along with more detailed

commentary and a summary on how the Group mitigates these risks. This list is not exhaustive but encompasses

management’s assessment of those risks which require considered response at this time.

Links to strategic objectives

1. Integrate Businesses and

realise synergies

2. Focus on select markets and key

growth opportunities

3. Invest in our sources of sustainable

competitive advantage

4. Support sustainable growth through

Players People Planet framework

5. Prioritise debt reduction through

ruthless focus on capital efficiency

Risk link

Strategic risks

Financial risks

Operational risks

Regulatory & compliance risks

888 Holdings PLC Annual Report & Accounts 2022 61

STRATEGIC REPORT

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Risk link

Strategic risks

Financial risks

Operational risks

Regulatory & compliance risks

Trend

Increase Decrease Stable

Risk level

Low Moderate High

The Group is committed to the policies, procedures and

controls over the delivery of its Environmental, Social

and Governance (ESG) objectives.

ESG issues include risks such as climate change, player

protection, diversity & inclusion, cybersecurity concerns

and social responsibility not just to employees and

customers but also to the communities where the

business bases its operations and retail outlets. Unlike

most other risk types, certain aspects of ESG risks are

often emerging with unique characteristics. Climate-

related risks for example tend to have little relevant

historical data associated with them and tend to be

non-linear in nature.

Nevertheless, The Group has identified several ESG

objectives and has developed sustainability metrics

andtargets to monitor progress against these. The ESG

framework is called ‘Players, People, Planet,’ and the

Group’s progress and targets are detailed on pages34–45

in this Annual Report. The Group’s strategic focus is on

protecting our players from gambling related harm,

creating an engaging and inclusive environment where

colleagues can thrive and protecting the environment

by achieving net zero carbon emissions by 2030.

How we manage and mitigate the risk

Key ESG policies, procedures and controls to support

the ESG framework are reviewed and updated on an

ongoing basis, with overall oversight provided by an ESG

committee of the Board.

The business maintains oversight of the Group’s

performance against its sustainability strategy (as

defined in the Company’s ESG Framework and as

amended from time to time), including the monitoring

of any material risks which could threaten the financial

and operational performance of the Company and

its strategic objectives, including its commitment to

corporate social responsibility.

The Group has developed sustainability metrics and

measures to monitor progress on performance against

management initiatives and any sustainability related

commitments communicated externally in support of

the Company’s objectives.

Management constantly review global developments

and consider the Company’s position on emerging

sustainability issues as well as reviewing any other

matters relevant to sustainability or ESG issues raised.

ESG

Risk link

Impact

The Group relies on its world class brands across its key

markets, with brand reputation being a key driver

of customer choice. As such, maintaining a strong

reputation is critical to the ongoing success of the Group.

There continues to be a trend in a number of jurisdictions

where the business operates to strengthen regulations

over safer gambling and customer protection, particularly

in regard to those underage and players who are vulnerable

or at an increased risk of harm. There is also an emphasis

on enhancing controls over anti money laundering and

anti-terrorist funding activities across the industry.

Media reporting on the industry as a whole has seen

continuing and indeed increased criticism of how individual

customers have been treated. This has led to further

calls for additional regulation, particularly around

responsible gambling, affordability and advertising, Any

failure to ensure the business is fully compliant would

result in significant reputational damage, in addition to

any sanctions imposed by its regulators.

How we manage and mitigate the risk

The business has strengthened its governance policies,

procedures and processes in place to ensure it meets its

regulatory obligations and to protect customers when

they use its services.

The Group continually reviews governance and oversight

arrangements and the control environment to prevent

any non-compliance and to identify and manage

any potential areas needing improvement. All staff

are trained to provide a safer gaming experience to

customers and to recognise and take appropriate

actions if they identify potentially harmful or underage

activity across online and retail operations.

The Group offers a range of tools and support to

potentially vulnerable customers and it provides

customers with other information regarding responsible

gaming. The Group works with gambling protection

experts and regulators as well as its own internal teams

to ensure that it adopts, embeds and monitors social

responsibility guidelines and that it undertakes proactive

responsible gaming communications and measures for

all customers.

The business continually strives to protect the hard-won

reputation of all its brands and the corporate affairs

team, marketing, compliance and legal teams all work

closely with operational and front-line management to

ensure that all employees are well trained and engaged

to ensure that the business acts in a responsible way

with all its internal and external stakeholders.

REPUTATIONAL

Risk link

Impact

Trend

Owner: Chief Strategy Officer

Trend

Owner: Chief Strategy Officer

RISK MANAGEMENT CONTINUED

888 Holdings PLC Annual Report & Accounts 202262

STRATEGIC REPORT

MARKET RISK

The acquisition of William Hill was financed using a

combination of sources, including significant debt

facilities. The Group has entered into a range of

hedging arrangements such that approximately 70%

of interest costs are fixed for the next three years,

and the currency profile of the debt was more closely

aligned to the currency profile of the Group. However,

the Group is still exposed to risks related to interest

rate changes and currency fluctuations, which could

increase the cost of the Group’s borrowings, and

this could divert resources from investing in growth,

marketing and delivery of new products and projects.

The Group is also exposed to foreign exchange rate

fluctuations and risks in its financial reporting. A

substantial part of the Group’s deposits and revenues

are generated in GBP, EUR and other currencies, whilst

the Group’s operating expenses are largely incurred

in local currencies, primarily GBP, EUR, ILS, and USD,

with incremental operating cost exposure across our

offices in Philippines, Romania, Bulgaria and Poland.

The Group also has debt servicing costs which are

denominated in USD and EUR, partially hedged in GBP.

How we manage and mitigate the risk

Actions have been taken to reduce risks related to

floating interest rates with 70% of the Group’s loans

now hedged against interest changes. Additionally, the

treasury team continues to seek more optimisation of

the debt based on market opportunities. The business

continues to focus on the group’s operational cashflow

forecasting capabilities and management of cash in

the business, report on unrestricted and available cash

balances, and ensure we remain within our banking

covenants. Management also evaluates the current

liquidity buffer and monitor and report on liquidity

headroom on a regular basis, modelling liquidity

downside sensitivities and scenarios.

The Group has mitigated this risk by adopting policies

to hedge certain costs to GBP, including negotiating

with suppliers to change invoicing to GBP. The Group

has entered into FX or cross currency swaps in order

to hedge part of its ongoing USD and EUR exposure

arising due to the acquisition financing and its ongoing

EUR exposure under outstanding notes. Forward deals

are also in place to hedge ILS against revenue in

Canadian Dollars and GBP.

The Group is subject to a range of taxes, duties

and levies in many of the countries where we have

operations or in which our customers are located.

These taxes have changed over time and continue to

be subject to change. In addition to tax rate changes, the

Group’s international footprint brings added complexity

to its tax and duty positions, which requires careful

management to ensure the business fulfils its obligations.

The nature of tax affairs can be complicated with

differing legal interpretation regarding the scope

and scale of taxation, which alongside potential rate

changes mean the levels of taxation to which the

Group is exposed may change in the future, creating

a risk of additional costs. There is also a risk of

audits of the Group’s tax filings and/or challenges

to the filing/non-filing positions the Group is taking

in certain locations. Any adjustments made by tax

authorities to the Group’s filed positions may also lead

to opportunities for governments to apply financial

penalties and interest – this action may impact the

company’s reputation with customers, the capital

markets and key stakeholders such as compliance

and regulatory bodies who issue and monitor its

operating licences.

How we manage and mitigate the risk

The business has dedicated tax experts within the

business, supported by its legal team and external

specialists where appropriate to carefully monitor

proposed changes to its taxation base and rates

and to communicate early any implications to

seniormanagement.

To mitigate the risk of a transfer pricing challenge

by authorities, the Group seeks to ensure that all

transactions between related parties are appropriately

documented and priced on an arm’s length basis,

which where necessary, is supported by third

partyevidence.

Management aim to ensure that each legal entity

within the Group is tax resident of a jurisdiction

in accordance with the local applicable tax laws

and that there is no taxable presence in any other

jurisdiction. Regular reviews are undertaken to

assure management that appropriate governance

supports business decision making being taken in the

relevant location.

TAXATION

Risk link

Impact

Trend

Owner: Chief Financial Officer

Risk link

Impact

Trend

Owner: Chief Financial Officer

Risk link

Strategic risks

Financial risks

Operational risks

Regulatory & compliance risks

Trend

Increase Decrease Stable

Risk level

Low Moderate High

888 Holdings PLC Annual Report & Accounts 2022 63

STRATEGIC REPORT

The Group is in the process of integrating the William Hill

business into its corporate structure, with the strategy

to integrate operations and technology and deliver

cost synergies whilst retaining its customer base and

experienced and qualified personnel.

The integration is supported by strong governance,

oversight and dedicated management teams. However,

risks inherently remain to the delivery and timing of all or

substantially all the expected benefits and to the timely

delivery of these benefits. The delivery of these synergies

involves complexity, and associated costs to revising

current systems and organisational structures. As such there

is a risk that these costs could exceed our current cost

estimates, impacting on anticipated integration benefits.

Consolidating multiple technology systems can be

complex and challenging, and may lead to potential

disruptions in our operations and require us to take on

higher levels of risk in the short term.

Integration risks also include the unexpected loss of key

personnel, the erosion of our existing customer base and

issues in integrating financial and operational policies,

processes, procedures and controls. There are challenges

in managing the increased scope, geographic diversity

and complexity of the Group’s operations. Third-party

partners and suppliers may look to terminate or alter

their existing contracts with the Group.

There are also risks associated with the management

of conflicting interests within the Group and failure

to mitigate contingent or assumed liabilities, as well

as diversion of management and resources from the

Group’s core business activity due to personnel being

required to assist in the integration process.

How we manage and mitigate the risk

The integration plans have strong governance

arrangements in place with oversight by specific

integration program managers, particularly with

regard to technology, as well as both the Executive

management team and the Group Board.

Dedicated management teams are in place across all

the business divisions and Group functions supported by

experienced integration programme managers.

Detailed integration plans are in place and are being

delivered across the Group, with regular reporting,

supported by Finance, on the progress of the delivery of

these plans together with associated synergies and costs,

which are tracked and monitored against forecasts. This

allows any variances to expected benefits and costs to

be quickly identified and mitigated.

INTEGRATION

Risk link

Impact

Our colleagues across all of our business functions

are vital to ensuring our day to day operations are

undertaken efficiently and effectively and also to the

successful delivery of our strategic business objectives.

Competition for highly qualified personnel is intense

in many of the locations in which the Group is based.

Ensuring our colleagues are well remunerated,

managed and supported is fundamental to the

success of the business.

The integration activities following the acquisition of

William Hill have introduced some uncertainty for our

colleagues across the business, which does carry a

risk with regard to staff retention in particular, but also

recruitment in the short term.

How we manage and mitigate the risk

The Group continually benchmarks remuneration and

benefits packages against similar businesses to ensure

we remain competitive, and which helps to ensure we

retain key employees, and continue to attract new

quality recruits to support the delivery of our strategy.

Management ensure that regular communication is

held with all our colleagues so that they are aware

of any organisational changes resulting from our

integration activities as soon as possible, particularly

for those affected either directly or indirectly.

Our HR functions have a number of strategies in place

to ensure that we do our utmost to protect both the

physical and mental wellbeing of all our colleagues.

The Board has an active Nominations Committee,

which is responsible for succession planning at the

Board and senior management levels and is supported

as necessary by external executive recruitment

agencies. Succession planning is also undertaken for

our other management positions and for key personnel

across all business functions.

PEOPLE

Risk link

Impact

Trend

Owner: Chief People Officer

Trend

Owner: Chief People Officer

RISK MANAGEMENT CONTINUED

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Risk link

Strategic risks

Financial risks

Operational risks

Regulatory & compliance risks

Trend

Increase Decrease Stable

Risk level

Low Moderate High

888 Holdings PLC Annual Report & Accounts 202264

STRATEGIC REPORT

There is a continual risk that our technology systems and

as a result our operations may be impacted by cyber-

attacks such as Distributed Denial of Service (DDoS) by

malicious third parties, the theft or misuse of customer and

business data by internal or external agents or natural or

manmade disasters affecting our offices and operational

locations or those of our key suppliers.

Cyber-attacks leading to data theft could expose the

Group to “ransom” demands or regulatory sanctions

including fines and reputational damage, which could lead

to loss of customer confidence in the business.

The loss of availability of our technology and

communication systems, or those in our key suppliers’

infrastructure could cause significant disruption and cost

to the business, and lead to revenue loss both during the

incident and in the aftermath if customers move their

business to our competitors. Lengthy down-time could also

cause us to breach regulatory obligations.

How we manage and mitigate the risk

Measures to mitigate the risks to our business and

technology infrastructure include the procurement and use

of anti-DDoS services and anti-virus protection from leading

suppliers. Physical and logical network segmentation

is also used to isolate and protect our networks and to

restrict malicious activities. To ensure systems are protected

properly and effectively, external security scans and

assessments (e.g. PCI DSS) are carried out on a regular

basis. To minimise dependence on telecommunication

service providers, the Group invests in network infrastructure

redundancies whilst regularly reviewing its service providers.

888.com has a disaster recovery site to ensure full recovery

in the event of a major incident. In the event of loss of

functionality of 888’s critical services, the business can

be fully recovered through the resources available at the

disaster recovery site. As part of integration plans, the

Group is planning to migrate William Hill and Mr Green

systems to the existing 888 platform which will strengthen

the Business Continuity and Disaster Recovery options

currently available to these parts of the Group.

Systems are in place which are designed to identify and

alert management to problems related to systems, key

business indicators and issues around customer service.

Changes, incidents and service level agreement key

performance indicators are tracked to ensure a consistent

and well managed customer experience. Capacity

headroom and system-wide availability is measured and

monitored so that actions can be proactively taken to

manage any risks to service availability. Network-related

performance issues are addressed by rerouting traffic

using different routes or providers.

CYBER AND TECHNOLOGY

Risk link

Impact

To effectively deliver our products and services

to customers the Group has reliance upon certain

critical suppliers of technology, payment services,

marketing, gaming products, sports content and

media. The effective management of critical third party

relationships and performance is key to delivering

our strategic objectives. Any failure of our suppliers to

provide services to us may have a significant adverse

impact our own operations.

The Group also has certain strategic partnerships

where we supply third party operators with business

to business (B2B) gambling services in the United

States which have strategic importance for the longer

term growth in our US business. Any risks to our B2B

partnerships or meeting our contractual obligations

with them have to be managed to ensure the long-term

viability of our operations linked to these relationships,

and to ensure we are able to meet our strategic

growth targets.

How we manage and mitigate the risk

The risk related to B2B operations was significantly

reduced during 2022 following the sales of our B2B and

B2C bingo operations, enabling the Group to increase its

focus on its core betting and gaming operations.

The business ensures that we manage and maintain

all our B2B partnerships commercially, including the

functionality and technology of the B2B platforms

offered, competitive pricing, maintaining an ongoing

relationship with B2B partners, and ensuring that 888

has good relationships with all our strategic partners so

that we have a clear understanding of the requirements

and expectations of our B2B partners and their

stakeholders.

Key suppliers are managed through relationship

management with procurement and operational

managers and through regular reviews of performance

against SLAs, with mitigating action taken where

variances are identified.

PARTNERSHIP

Risk link

Impact

Trend

Owner: Chief Product & Technology Officer

Trend

Owner: Chief Financial Officer

Risk link

Strategic risks

Financial risks

Operational risks

Regulatory & compliance risks

Trend

Increase Decrease Stable

Risk level

Low Moderate High

888 Holdings PLC Annual Report & Accounts 2022 65

STRATEGIC REPORT

Compliance with regulatory requirements is critical

to maintaining the Group’s licences, protecting our

customers and driving growth. With most of our

revenue generated from licensed jurisdictions and more

countries looking to regulate, the importance of such

licenses to the business is constantly increasing.

Regulatory requirements in key markets are subject to

change, sometimes at short notice, which could benefit

or have an adverse impact on the Group and additional

costs may be incurred in order to comply with any new

laws or regulations. During the year the Group was

subject to additional regulatory requirements across

a number of its markets, including newly regulated

markets in which it launched its products for the first

time such as Ontario in Canada and certain US states.

Regulatory changes during 2022 are explained in more

detail in the market focus section on page 18.

How we manage and mitigate the risk

The Group Compliance, Legal and other operational

teams regularly consult with regulators and external

legal advisers in markets where the business operates

and in particular in jurisdictions where it generates

significant revenue. The Group ensures that frequent

and routine updates on legal and regulatory changes in

these jurisdictions are obtained, and in any others that

may offer growth opportunities.

The Group continually adapts its services and its

compliance activities to ensure that it remains

compliant with the latest legal and regulatory

requirements. As part of the integration of 888 and

William Hill the Group has implemented governance,

organisational and procedural changes to deliver

compliance with obligations and requirements which

apply to the newly combined Group. The business has

already begun to implement best practices across

Compliance teams in order to strengthen management

oversight and improve co-operation across the business

to ensure that regulatory requirements take priority over

commercial interests.

The Group continues to invest in technology and

product developments to automate processes and

controls across compliance related activities. It aims to

improve management information and oversight and

reduce the reliance on manual controls. This will improve

customer protection and mitigate associated risks.

REGULATORY AND COMPLIANCE

Risk link

Impact

Trend

Owner: Chief Risk Officer

DATA PROTECTION AND E-PRIVACY

Risk link

Impact

Trend

Owner: Chief Risk Officer

The integrity of the Group’s data protection framework

including the holding, processing and protection of

customer’s, third party and sensitive business data

is crucial to the supply of its services to customers

andthe Group’s compliance with regulatory and

legalobligations.

The Group is exposed to the risk that data breaches

could result in financial loss, reputational damage,

andpotential regulatory enforcement including financial

penalties.

The betting and gaming sector is under increased

scrutiny from data protection regulators globally and

particularly in the UK where the ICO specifically called

out the betting and gaming industry’s use of adtech,

social media and general use of personal data as an

area of focus for the next three-years in the ICO25

strategy document.

How we manage and mitigate the risk

The Company has appointed a Group Data Protection

Officer to manage the Company’s compliance with

associated privacy and data protection regulations.

The Data Protection function is tasked with advising

on and monitoring compliance with key regulations,

recommending and implementing key controls such

aspolicy and training where required.

The Company recognises that the Data Protection

function is a supporting advisory function and

accountability for determining the nature, scope,

context and purpose of processing in a compliant

manner remains with the Company at large. It does this

with the consultancy support of the Data Protection

function and the policy, process and training resources

that have been implemented. As such, measures have

been deployed to ensure that: Customer personal

data is protected; People are informed about how the

Company uses their data; People’s data rights are

complied with; and, Third parties process personal

datacompliantly.

RISK MANAGEMENT CONTINUED

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Risk link

Strategic risks

Financial risks

Operational risks

Regulatory & compliance risks

Trend

Increase Decrease Stable

Risk level

Low Moderate High

888 Holdings PLC Annual Report & Accounts 202266

STRATEGIC REPORT

VIABILITY STATEMENT

In accordance with provision 31 of the

2018 UK Corporate Governance Code

(the 2018 Code), the Group has assessed

their prospects over a longer period than

the 12 months required by the Going

Concern assessment.

The Directors confirm that they have a

reasonable expectation that the Group

will continue to operate and meet its

liabilities as they fall due, over a three-

year period to December 2025. In making

this statement, the Board has assessed

the Company’s current position, its

prospects and its strategy, as well as

performed a robust assessment of the

principal risks facing the Company both

individually and in aggregate, including

those risks that could potentially threaten

the Group’s business model, future

performance, solvency or liquidity.

The nature of the risks and opportunities

faced by the Group (in particular, the

actual or possible impact of future fiscal

and regulatory changes, regulatory

actions and the pace of technological

change) limits the Directors’ ability to

make reliable longer-term predictions.

Accordingly, the Board has agreed to

maintain a three-year horizon to allow

for a greater degree of certainty in its

assumptions.

The Directors’ assessment includes a

financial review, which is derived from the

Group’s detailed bottom-up budget for

2023 and from the medium-term Group’s

top-down five-year forecast for 2024

and 2025, being the most recent Board-

approved forecasts. It identifies the

expected cash flows, net debt headroom

and funding covenant compliance

throughout the three years under review.

With respect to the period assessed, the

Directors have considered:

• The Group’s resilience to threats

to its viability in a broad range of

severe but plausible scenarios; and

• Both qualitative and quantitative

analyses, including the combined

impact of the crystallisation of

multiple risks simultaneously, which

the Directors consider sufficiently

robust to make a sound statement.

The principal risks facing the Group,

and how the Group addresses such risks,

are described in this Strategic Report,

and the key risks are summarised in the

section ‘Principal risks and uncertainties’

which can be found on pages 56–66.

The most relevant of these risks to the

viability of the Group were

considered to be:

• Changing regulation in Online,

and specifically: the impact

of a potential introduction of

affordability measures in the UK;

a maximum stake on online slot

machines in the UK; the impact

of potential new regulations in

the European countries in which

we operate; the impact of any

breach of licence conditions or that

underlying contracts in question

are null and void given local

licencing regimes;

• Reputational impact and fines from

regulators if we have a breach in our

compliance procedures that results

in a failure to meet the expectations

of regulators, our shareholders and

broader stakeholders;

• A major cyber-attack and/or data

protection violation, resulting in

the loss of availability of our online

offering, reputational damage

and fines for breach of GDPR

regulations;

• Delivery and timing of the integrated

Group synergies that results in

costs that exceed our current cost

estimates; and

• The impact of increasing interest

rates on the Group’s floating

rate debt.

Sensitivity analysis on these risks has

been undertaken to stress test the

resilience of the Group. The sensitivity

analysis considers all of the Group’s

principal risks and models the impact of

those considered relevant to the Group's

viability. This modelling tests a number

of the main assumptions underlying the

forecasts, as well as effective mitigation

that could occur to avoid or reduce

the impact or occurrence of the risk.

The mitigations identified by the Group

include but are not limited to drawing

down on the revolving credit facility

(£150m maturing January 2028, which

currently remains undrawn), stopping

or decreasing non-essential capital

investment and variable costs including

marketing spend.

Through this analysis, the Directors

have a reasonable expectation that no

single event or plausible combination of

events would be sufficient to impact its

viability, and even under the most severe

but plausible combination of events

the Group will be able to continue in

operation and meet its liabilities as they

fall due over the three-year period of

assessment.

888 Holdings PLC Annual Report & Accounts 2022 67

STRATEGIC REPORT

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT

In addition to this TCFD report,

further detail on the greenhouse gas

emissions can be found in the Zero

Carbon Report 2022 and the ESG

Supplementary Information section

on page 82. Throughout this report

we refer to the Zero Carbon Report

2022, which is available on our

corporate website, and other areas of

this annual report, including the ESG

supplementary information.

The information contained within the

Planet and TCFD sections of the report

(pages 44–45 and 68–88) has not been

assured or independently verified.

Allinformation included has been

compiled by the business and taken

from sources that we deem to accurate

and reliable. All reasonable care has

been taken to ensure the data is

accurate but no independent

verification of the data has taken

place to assure its accuracy or

completeness.

As recommended by the TCFD,

scenario analysis has been used this

year as a tool through which to better

understand the potential impact of

climate change on the business.

GOVERNANCE

The Group has an established system

of ESG governance agreed to by the

Board, which is embedded throughout

the business proportionate to the

nature, scale, and complexity of

888’soperations.

Board oversight of climate-

related risks and opportunities

The Board provides oversight of 888’s

climate-related risks and opportunities

supported by the Group’s executive

committees and management (see

Figure 1).

Figure 1: the Board’s oversight of climate-related risks and opportunities.

ESG governance

Board of

Directors

The Board is accountable for all climate-related risks and opportunities impacting the Group

and for the net zero targets set. In July 2022, Andria Vidler was appointed to the Board, bringing

her extensive ESG experience. In 2022, the Board considered climate-related matters when

acquiring William Hill, reviewing the ESG strategy and the Group’s Risk Register. A non-executive

director was also present during this year’s climate-related scenario analysis workshops. In

2022 the Board received updates on climate issues from the ESG Committee of the Board via

the Chairman, who was both the Chair of the Board and the Chair of the ESG Committee of the

Board. In January 2023, Andria Vidler took over the role of Chair of the ESG Committee. ESG

updates are now also a standing agenda item at board meetings.

ESG

Committee

oftheBoard

In 2021, 888 established an ESG Committee of the Board, comprising Senior Independent

Director, Anne de Kerckhove, Non-Executive Director, Mark Summerfield, and the Chairman,

LordMendelsohn. The ESG Committee of the Board has oversight of all ESG matters (inclusive of

climate) including strategy; targets and key performance indicators; budgets; capex and setting

performance objectives. Materiality is the threshold at which ESG issues become sufficiently

important to 888’s investors and other stakeholders that they should be publicly reported

and includes anything that is materially different from expectations and requires a significant

change in strategy or creates a material change in financial results or position. The threshold

of materiality for ESG issues is continually assessed by the ESG Committee of the Board as

stakeholders’ needs evolve over time.

The Chief Risk Officer, who leads the Risk and Sustainability Committee, and the Chief Strategy

Officer provide updates to the ESG Committee of the Board at every Board meeting. In 2022,

the ESG Committee of the Board met at least three times to discuss the Zero Carbon Report

and how the Group’s progress towards net zero should be tracked. The scenario analysis results

were presented to the ESG Committee of the Board in November 2022. Climate-related issues

were also considered during the acquisition of the William Hill business, and they continue to be

discussed as this new business is integrated into the Group. The Group plan to consider climate-

related issues during any future acquisitions or divestments, and to consider carbon emissions

when making any new investments, such as siting new facilities.

THIS REPORT PROVIDES 888’S CLIMATE-RELATED DISCLOSURES

IN LINE WITH THE TCFD’S GUIDANCE AND RECOMMENDATIONS.

ASUMMARY OF THE CLIMATE-RELATED FINANCIAL DISCLOSURES

HAS BEEN INTEGRATED INTO THE SUSTAINABILITY SECTION OF

THE ANNUAL REPORT ON PAGE 34.

888 Holdings PLC Annual Report & Accounts 202268

STRATEGIC REPORT

Management’s ownership of climate-related risks and opportunities

The executive team is responsible for managing climate-related risks and opportunities on a day-to-day basis. Figure 2

outlines 888’s overall ESG governance structure.

Board of Directors

ESG Committee of the Board

Risk and Sustainability Committee

External ESG Consultants

Business functions

ESG Forum (ESG Director)

Chief

Procurement

Officer

Chief Strategy

Officer

Chief

People

Officer

Corporate

affairs

Head of

Product

Compliance

Chief Risk

Officer

Company

Secretary

External Risk

Consultants

Key

Advise, escalate, report

Delegates

Oversight & challenge

Information sharing

Board and oversight

Group Governance

ESG Governance

Business functions

External Advisers

Figure 2: 888’s ESG governance organogram

Assessment and monitoring of climate-related risks and opportunities is embedded in the Group’s

executive committees and business functions. In 2022, the Group’s ESG governance structure evolved to

include a Risk and Sustainability Committee. In March 2023, an ESG and Sustainability Director was also

appointed, who has executive responsibility for the Group’s ESG strategy.

888 Holdings PLC Annual Report & Accounts 2022 69

STRATEGIC REPORT

GOVERNANCE CONTINUED

Management’s ownership of climate-related risks and opportunities continued

Figure 3: Management’s ownership of climate-related risks and opportunities

ESG governance

Risk and

Sustainability

Committee

The Risk and Sustainability Committee is a monthly executive management committee, which

provides oversight to support the ESG Committee of the Board in managing risks to 888’s long-

term strategic objectives. The committee will monitor the Group’s performance against the

Board’s risk appetite, review the effectiveness of the risk management framework and ensure

risk management decisions are aligned to long-term goals (see the terms of reference available

on 888’s corporate website). The Risk and Sustainability Committee is chaired by the Chief Risk

Officer, who owns the Group Risk Register. The Chief Risk Officer reports to the ESG Committee of

the Board at regular intervals.

ESG Forum

In March 2023, the Group appointed an ESG and Sustainability Director, who has executive

responsibility for the Group’s ESG strategy. The ESG and Sustainability Director leads the ESG

Forum, a cross-functional forum which implements the Group’s ESG and climate strategy,

including representatives from Procurement, Strategy, People, Corporate Affairs and Product

Compliance. The ESG Forum serves as a medium through which ESG issues (including climate)

can be managed and escalated to the Risk and Sustainability Committee by the ESG and

Sustainability Director.

In 2023, the ESG Forum will meet at least quarterly to discuss ESG issues, progress against

targets and updates on current and planned initiatives. The environmental data is tracked

internally by 888 using a dashboard (Carbon Footprint Dashboard) to assess progress against

climate goals. The Carbon Footprint Dashboard is presented periodically by facilities to the ESG

Forum. William Hill also has an internal MI tracker to monitor progress against environmental

targets. In 2023, the ESG Forum will review the how the environmental data, processes and

procedures will be integrated for the Group.

The Group’s

functions

Procurement, led by the Chief Procurement Officer, has ownership of all environmental issues,

including climate. Specifically, Procurement owns Scope 1, 2 and 3 GHG emissions and develops

the strategies for driving-down absolute GHG emissions across the business. Procurement will be

leading a strategy from 2023 onwards encompassing best practice in monitoring and ultimately

driving down emissions both in the Group and the supply chain. The Facilities Manager and

Vice President for Finance also discuss any climate-related issues and Facilities monitor and

report on environmental targets, metrics and KPIs. External consultants also assist management

as required.

Future priorities

In 2023, the Group will continue

to integrate the climate-related

governance processes of 888 and

William Hill, and may consider

focusing on:

• the ESG Committee of the Board

receiving more regular updates from

management on climate;

• evolving how the Board and

management monitor and oversee

progress against goals and targets

for addressing environmental

matters and climate-related

issues; and

• updating the Group’s internal

policies and procedures to embed

the transition plan to net zero

throughout the organisation.

Strategy

Climate change is a key focus area

under the Planet pillar of the ESG

Strategy. The Group is committed to

transitioning its business model to one

that aligns with a 1.5°C world and a

net zero carbon economy and it has

developed a transition plan (Zero

Carbon Report 2022). The Group’s

strategic response focuses on the

associated transition and physical

climate-related risks and opportunities

which are material to 888.

888’s transition plan

The Group is committed to contributing

to the global economy’s transition

to a low carbon reality. In the Zero

Carbon Report 2021, 888 set the

ambitious targets of being net zero

by 2030 (Scope 1 and 2 emissions)

and across its value chain by 2035

(Scope 3 emissions). These targets

are integrated into the strategy,

with four priority actions covering

888’s operations and the wider value

chain. The Group believes that early

action to drive aggressive reductions

in emissions will lead to a more

competitive business overall.

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888 Holdings PLC Annual Report & Accounts 202270

STRATEGIC REPORT

To avoid potential regulatory shocks

and proactively manage the climate-

related risks, the Group has committed

to meeting net zero by 2035, which is 15

years earlier than the UK government’s

mandate to be net zero by 2050.

The Zero Carbon Report 2022 (second

release) is an update with our progress

along the pathway to reach net

zero emissions. It also outlines the

development of 888’s transition plan

to align our business model with a

world in which the global average

temperature is allowed to rise by no

more than 1.5°C above pre-industrial

levels. 888 acknowledges that in 2022

the UK Transition Plan Taskforce (‘TPT’)

developed a sector neutral framework

for transition plan disclosures. The

Group may consider aligning its

disclosures with the TPT’s guidance for

transition plans in future iterations of

its plan.

888 strives to incorporate its net

zero commitments into all parts of

its operations. To deliver these net

zero targets, 888 will apply several

business levers across four priorities

(outlined below) and business as usual

activities will also be employed, such

as monitoring energy efficiency.

Priority 1: urgently cut Scope 1 and

2 emissions by 80% by 2030 (2019

baseline), principally using renewable

energy and also targeting absolute

emissions reductions.

Priority 2: by 2025, both large and

smaller vendors representing 60% of

the Group’s third-party supplier spend

should have carbon reduction plans

in place to target an 80% fall in their

emissions by 2035 (the ‘80 by 60’

strategy).

Priority 3: encourage the use of

greener transport for employees

commuting and travelling for business,

targeting a reduction of 80% in

emissions by 2035 (2021 baseline).

Priority 4: invest in high quality carbon

removal offsets for the remaining 20%

of Scope 1 and 2 emissions (by 2030)

and remaining indirect emissions

(by 2035).

For details of progress undertaken

in 2022 against these targets and

future actions, please refer to the

Zero Carbon Report 2022. The risks

of meeting the net zero targets

and challenges of the transition

plan are also discussed in the Zero

Carbon Report 2022. In 2023, the

Group will re-calculate the baseline

values for its net zero targets based

on the acquisition and divestment

activity in 2022.

Climate-related scenario analysis

This year, the Group conducted

qualitative scenario analysis to

inform its climate strategy and risk

management, and climate has been

included in the Group Risk Register

for the first time for monitoring by

the Board.

Climate-related risks and

opportunities identified over the

short-, medium- and long-term

Due to the inherent uncertainty

and pervasive nature of the risks

associated with climate change, the

Group modelled multiple time horizons

and performed scenario analysis under

three climate scenarios to assess its

exposure to physical and transition

risks up to 2100.

The following expected timescales for

impact were selected:

SHORT-TERM LONG-TERMMEDIUM-TERM

2022 2025 2026 2037 2100

These time horizons were chosen with the understanding that climate-related issues tend to manifest over the long-term

but medium- and short-term implications may also be seen. The scenario analysis assumptions and methodology are

found in the ESG Supplementary Information section of the Annual Report.

Short-, medium- & long-term time horizons disclosed by 888

888 Holdings PLC Annual Report & Accounts 2022 71

STRATEGIC REPORT

GOVERNANCE CONTINUED

Climate scenarios

Following the advice of external advisers, management chose to model three climate scenarios (including a 2°C or lower

scenario as recommended by the TCFD) to ensure that a range of different climate transition pathways were represented

(see Figure 4).

Figure 4: Climate-related scenarios used in the scenario analysis and sources

Low High

Early action

(1.5-2.0°C)

Limited action

(2.0-3.0°C)

No action

(3.0-4.0°C)

Physical risks

Transitional risks

Early action

(1.5-2.0°C)

Physical aspects

• Increase in the intensity and frequency

of extreme weather events

• Manageable changes across

most regions

• Shifts in agriculture practices may

be observed

Transitional aspects

• Implement policy changes to limit

warming to below 1.5°C

• Rapid decarbonisation of infrastructure

and technology is implemented in high

emitting sectors

• Common use of fossil fuels is ruled out

with extremely limited use by 2040

Limited action

(2.0-3.0°C)

Physical aspects

• Further increased intensity and

frequency of extreme weather events

• In some global regions conditions are

unmanageable under extreme physical

conditions

• Considerable ecological

impacts expected

• Shifts in agriculture practices observed

• Low lying regions become vulnerable to

sea-level rise

Transitional aspects

• Some new climate policies expected to

be implemented

• Limited decarbonisation in high

emitting sectors

• Governmental policies not consistently

aligned to mitigating climate change

No action

(3.0-4.0°C)

Physical aspects

• Prolonged, extreme weather conditions

• Areas uninhabitable

• Large ecological destruction

• Climate feedback effects enforce

rapid physical changes and produce

high uncertainty around magnitude of

impacts from feedback

Transitional aspects

• Very few climate policies are introduced

• Emissions are reduced gradually

through efficiencies only

• Reasonable reliance globally on

fossil fuels

Early action

(1.5-2.0°C)

SSP1-2.6

• Net-zero emissions expected from

2050 onwards.

• Warming stays well below 2°C by 2100,

with the aim of staying within the 1.5°C

threshold.

Other published scenarios:

IEA WEO Net Zero (~1.5°C) and Sustainable

Development (<2 °C)

Scenarios. IPCC RCP 1.9 (1.5°c) and

2.6 (<2°C)

Limited action

(2.0-3.0°C)

SSP2-4.5

• Emissions expected to peak by 2050

but do not reach net zero by 2100.

• Warming is estimated to be around

2.7°C by 2100.

Aligns with the more ambitious pledges

made under the Paris Agreement.

Other published scenarios:

IEA WEO Announced Pledges (~2.1°C) and

Stated Policies (~2.6°C) scenarios. IPCC

RCP 3.4 (2-2.4°C) and 4.5 (2-3°C)

No action

(3.0-4.0°C)

SSP3-7.0

• Emissions continue to rise and are

expected to double by 2100.

• Warming is estimated to be around

3.6°C by 2100.

Other published scenarios:

IPCC RCP 6 (3-4°C)

Below is a high level overview of the key features of each warming scenario

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888 Holdings PLC Annual Report & Accounts 202272

STRATEGIC REPORT

Climate-related risks and opportunities identified and risk management

A comprehensive list of potential climate-related risks and opportunities was developed and refined during the scenario

analysis to focus on those that could materially impact the Group (see Figure 5). The risks and opportunities the Group

faces from climate change include not only the physical aspects but also legal, policy and commercial changes in the

global markets in which 888 operates. To respond to these risks, the Group will need to take enterprise-wide action and build

resilience through mitigation, adaptation, and business continuity planning. The Group already has strong business continuity

planning in place after the impact of COVID-19, and these foundations can be built on as the climate challenge evolves.

Figure 5: 888’s material climate-related risks identified during the scenario analysis

Market

• Temporary increases to the cost of

living during the transition to low carbon

technologies

Policy and legal

• Legislation introduced to ban fossil fuel

use for fuel and energy generation and

to favour renewable energy generation

Reputation

• Market/stakeholder pressure to switch

all sites onto renewable energy to meet

pledged carbon reduction and net

zero targets

TRANSITION RISKS

Acute Physical

• Increase in extreme acute weather

events locally and flash flooding events

from increased/prolonged participation

• Increased frequency and intensity of

acute weather events globally

Chronic Physical

• Coastal flooding driven by sea level rises

PHYSICAL RISKS

888 Holdings PLC Annual Report & Accounts 2022 73

STRATEGIC REPORT

GOVERNANCE CONTINUED

Climate-related risks and opportunities identified and risk management continued

Figure 6: material physical climate-related risks and opportunities identified during the scenario analysis

Risk Impact/Opportunity

Climate

scenario (°C) Materiality Likelihood

Expected

timescale

for impact

Level of action

required to

manage risk Management approach and adaptive capacity

Coastal flooding

driven by sea

level rise

Safety risk to employees from travel and infrastructure

flood damage to offices, LBOs and employee homes

located in coastal regions. Increase in costs for building

repairs and reinforcement to mitigate against future

events e.g., flood defences and insurance costs or refused

reinsurance in vulnerable areas.

3-4

Likely

(60%)

Action

required in the

medium term

Assess sites in coastal regions through mapping across retail estate.

Where necessary consideration will be given to changing site locations

for sites in flood plains to mitigate this risk.

Increase in extreme

acute weather events

locally e.g., hurricane

intensity, frequency

and geographical

disparity, flash

flooding events

as a result of

increased/prolonged

precipitation.

Potential disruption to business services due to energy

supply and communication services disruption e.g.,

telecoms and phone lines due to damage. Health

and Safety risk to employees located in offices, LBOs

and homes due to damage and potential increase in

employee absence or requirement to work from home.

Increased overhead costs for building repairs.

Opportunity: reduce emissions from commuting

and mitigate of employee absence due to improved

capacity for remote working, established during global

COVID-19 restrictions.

3-4

Very Likely

(80%)

Maintain current

processes to

manage risk

Ensure Business Continuity Plans are updated and tested accordingly

for each office location to ensure risk is mitigated. Ensure key staff have

ability to work remotely and from home to naturally reduce this risk.

2-3

Increased

frequency and

intensity of extreme

acute weather

events globally.

Loss of revenue as a result of the cancellation or

rescheduling of sporting events.

3-4

Virtually certain

(99-100%)

No action

required to

manage risk

The business model needs to pivot accordingly to any change in

sporting timetable. The organisation’s ability to adapt to sporting

disruption has been demonstrated under other circumstances such as

COVID-19 and 888 is well equipped to continue this, based on lessons

already learned from previous challenges.

2-3

Timeline

<5 years

5-15 years

15 years+

Materiality

Low Medium High Very High

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT CONTINUED

888 Holdings PLC Annual Report & Accounts 202274

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GOVERNANCE CONTINUED

Climate-related risks and opportunities identified and risk management continued

Figure 6: material physical climate-related risks and opportunities identified during the scenario analysis

Risk Impact/Opportunity

Climate

scenario (°C) Materiality Likelihood

Expected

timescale

for impact

Level of action

required to

manage risk Management approach and adaptive capacity

Coastal flooding

driven by sea

level rise

Safety risk to employees from travel and infrastructure

flood damage to offices, LBOs and employee homes

located in coastal regions. Increase in costs for building

repairs and reinforcement to mitigate against future

events e.g., flood defences and insurance costs or refused

reinsurance in vulnerable areas.

3-4

Likely

(60%)

Action

required in the

medium term

Assess sites in coastal regions through mapping across retail estate.

Where necessary consideration will be given to changing site locations

for sites in flood plains to mitigate this risk.

Increase in extreme

acute weather events

locally e.g., hurricane

intensity, frequency

and geographical

disparity, flash

flooding events

as a result of

increased/prolonged

precipitation.

Potential disruption to business services due to energy

supply and communication services disruption e.g.,

telecoms and phone lines due to damage. Health

and Safety risk to employees located in offices, LBOs

and homes due to damage and potential increase in

employee absence or requirement to work from home.

Increased overhead costs for building repairs.

Opportunity: reduce emissions from commuting

and mitigate of employee absence due to improved

capacity for remote working, established during global

COVID-19 restrictions.

3-4

Very Likely

(80%)

Maintain current

processes to

manage risk

Ensure Business Continuity Plans are updated and tested accordingly

for each office location to ensure risk is mitigated. Ensure key staff have

ability to work remotely and from home to naturally reduce this risk.

2-3

Increased

frequency and

intensity of extreme

acute weather

events globally.

Loss of revenue as a result of the cancellation or

rescheduling of sporting events.

3-4

Virtually certain

(99-100%)

No action

required to

manage risk

The business model needs to pivot accordingly to any change in

sporting timetable. The organisation’s ability to adapt to sporting

disruption has been demonstrated under other circumstances such as

COVID-19 and 888 is well equipped to continue this, based on lessons

already learned from previous challenges.

2-3

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GOVERNANCE CONTINUED

Climate-related risks and opportunities identified and risk management continued

Figure 7: material transition climate-related risks and opportunities identified during the scenario analysis

Risk Impact/Opportunity

Climate

scenario (°C) Materiality Likelihood

Expected

timescale

for impact

Level of action

required to

manage risk Management approach and adaptive capacity

Temporary increases

to the cost of living

during the transition

to low-carbon

technologies.

Economic constraints mean clients may have less

disposable income to spend on leisure and gambling

activities, resulting in a loss of revenue for the business.

Increased risk of vulnerability to harmful gambling for

clients in high-risk groups.

1.5-2

Very Likely

(80%)

Maintain current

processes to

manage risk

On-going review of economic conditions in main markets to analyse

effects on customer disposable income.

Thresholds for spend and affordability checks to be reviewed periodically.

2-3

No action

required to

manage risk

Demand from employees, especially those on national

living wages, for increase to wages due to wide-scale

increase in cost of living.

1.5-2

Likely

(60%)

Maintain current

processes to

manage risk

Review of retail colleague pay in line with changing economic conditions.

2-3

Legislation

introduced to place

a ban on fossil fuel

use for fuel and

energy generation

andintroduction of

legislation to favour

renewable energy

generation.

Loss of profit, driven by an increase in overhead energy

costs (commercial and domestic) and concerns around

energy security issues (e.g. restricted periods of energy

use/blackouts) affecting service delivery, and client

access to services, especially at LBOs.

Opportunity: Long term energy security within localised

energy grids from renewable energy generation,

with the potential to stabilise market energy prices.

Opportunity to identify peak times for energy

consumption and aim to reduce this, saving costs and

lowering the carbon footprint of these sites.

1.5-2

Very Likely

(80%)

Maintain current

processes to

manage risk

Use previous situations e.g., COVID-19 as a proxy for modelling potential

impact. Other options to be reviewed as part of the Planet pillar of the

ESG strategy.

Requirement to

switch all sites under

888’s control onto

renewable energy

due to market/

stakeholder pressure

and to meet pledged

carbon reduction and

NetZero targets.

Transition to green energy for global sites can be difficult

due to limited infrastructure in place, and often comes

atahigher overhead cost.

2-3

Very Likely

(80%)

Maintain current

processes to

manage risk

Procurement to assess and aim to source renewable energy

inalllocations.

Longer term strategy to be reviewed as part of the Planet pillar

oftheESG Framework.

Timeline

<5 years

5-15 years

15 years+

Materiality

Low Medium High Very High

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GOVERNANCE CONTINUED

Climate-related risks and opportunities identified and risk management continued

Figure 7: material transition climate-related risks and opportunities identified during the scenario analysis

Risk Impact/Opportunity

Climate

scenario (°C) Materiality Likelihood

Expected

timescale

for impact

Level of action

required to

manage risk Management approach and adaptive capacity

Temporary increases

to the cost of living

during the transition

to low-carbon

technologies.

Economic constraints mean clients may have less

disposable income to spend on leisure and gambling

activities, resulting in a loss of revenue for the business.

Increased risk of vulnerability to harmful gambling for

clients in high-risk groups.

1.5-2

Very Likely

(80%)

Maintain current

processes to

manage risk

On-going review of economic conditions in main markets to analyse

effects on customer disposable income.

Thresholds for spend and affordability checks to be reviewed periodically.

2-3

No action

required to

manage risk

Demand from employees, especially those on national

living wages, for increase to wages due to wide-scale

increase in cost of living.

1.5-2

Likely

(60%)

Maintain current

processes to

manage risk

Review of retail colleague pay in line with changing economic conditions.

2-3

Legislation

introduced to place

a ban on fossil fuel

use for fuel and

energy generation

andintroduction of

legislation to favour

renewable energy

generation.

Loss of profit, driven by an increase in overhead energy

costs (commercial and domestic) and concerns around

energy security issues (e.g. restricted periods of energy

use/blackouts) affecting service delivery, and client

access to services, especially at LBOs.

Opportunity: Long term energy security within localised

energy grids from renewable energy generation,

with the potential to stabilise market energy prices.

Opportunity to identify peak times for energy

consumption and aim to reduce this, saving costs and

lowering the carbon footprint of these sites.

1.5-2

Very Likely

(80%)

Maintain current

processes to

manage risk

Use previous situations e.g., COVID-19 as a proxy for modelling potential

impact. Other options to be reviewed as part of the Planet pillar of the

ESG strategy.

Requirement to

switch all sites under

888’s control onto

renewable energy

due to market/

stakeholder pressure

and to meet pledged

carbon reduction and

NetZero targets.

Transition to green energy for global sites can be difficult

due to limited infrastructure in place, and often comes

atahigher overhead cost.

2-3

Very Likely

(80%)

Maintain current

processes to

manage risk

Procurement to assess and aim to source renewable energy

inalllocations.

Longer term strategy to be reviewed as part of the Planet pillar

oftheESG Framework.

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THE IMPACT OF IDENTIFIED CLIMATE-RELATED RISKS AND OPPORTUNITIES ON 888’S BUSINESSES,

STRATEGY, AND FINANCIAL PLANNING

Through wider strategy measures to drive energy efficiency and its transition plan, the Group has already started to reduce

its exposure to some of the material transition risks.

Overall, the priorities for the Group in transitioning to a low-carbon economy are to focus on addressing the identified

transitional risks across operations, reducing the global carbon footprint, assessing the efficiency of resources, and improving

the efficiency with which energy is used. These priorities are discussed further in the Group’s Zero Carbon Report 2022.

A high-level view of the impact of climate-related issues across the Group’s strategy and businesses is provided in Figure

8 below. Management will review the opportunities for mitigating the impacts of the risks identified in the climate-related

scenario analysis, particularly those deemed to be of significant risk.

Figure 8 – summary of the impact of climate-related issues on the Group’s strategy and businesses

Category Impact on strategy and businesses

Products and

services

Betting, especially online gambling, uses a service business model with little to no physical

products. As a result, the Group’s core digital product offering has a low environmental impact.

Although the Group will continue to strive to reduce GHG emissions from its offices, retail units

and data centres, changes to the core product offering as the Group transitions to a low-carbon

economy are not being considered. Likewise, investment in research and development for the

development of low-carbon products/services, is not currently being considered. The potential

impact on 888’s services is outlined in the scenario results (Figures 6 and 7), together with

management’s mitigation approach.

Supply

chain and

value chain

The transition risks identified by the scenario analysis in a low-carbon economy will also be

faced by the Group’s supply chain and wider value chain, which may lead to increases in prices

(due to inflationary pressures) and further cost increases for the Group. The importance of the

Group’s supplier engagement activities and engaging with others in the value chain is key during

the transition and discussed in the transition plan.

Operations

To manage 888’s exposure in the 3-4°C scenario where physical risk dominates, the priority for

the organisation is to focus on actions to preserve the continuity of the business should any of

the material physical risks materialise. The impact on operations and location of facilities will

need to be reviewed in response to the coastal flooding risk identified, and a mapping exercise

undertaken to assess this risk and consideration given to changing site locations if required.

Acquisitions

or divestments

and access to

capital

The climate-related risks and opportunities identified by the scenario analysis will be considered

during any future acquisitions, divestments, or access to capital decisions made as part of the

ESG Committee of the Board’s overall decision-making process.

The Group needs to undertake further work to fully integrate the outputs of the scenario analysis into the strategy and

financial planning cycles moving forward and develop metrics to monitor climate-related risks and potential financial

impacts as required (to meet the TCFD Recommendation for Strategy, part b). The Group may look to disclose quantitative

climate-related scenario analysis outputs in future reporting periods.

888 Holdings PLC Annual Report & Accounts 202278

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THE RESILIENCE OF 888’S

STRATEGY TO CLIMATE

CHANGE CONSIDERING

DIFFERENT CLIMATE-RELATED

SCENARIOS

The Group’s ESG strategy is validated

annually by the Board and periodically

by the ESG Committee of the Board

to ensure it remains relevant and

resilient. Due to the dynamic nature

of the economy and climate change,

scenario analysis will be reperformed

every three years or after any material

business changes, in line with guidance

from the Department for Business,

Energy and Industrial Strategy. Elements

of the strategy may be refreshed

earlier if there are significant changes

in the external or internal environment.

The Group believes its net zero plan,

and the actions it is developing to

mitigate climate risks will support the

resilience of the business to the varying

climate change scenarios considered.

However, consideration of the potential

impact of climate-related issues on

financial performance and position,

across different climate scenarios,

needs to be considered and sensitivity

analysis performed (to meet the TCFD

Recommendation for Strategy, part c).

RISK MANAGEMENT

Climate change has been integrated

into the Group’s risk management

framework and the Group’s processes

for identifying, assessing, and

managing climate-related risks is

described below.

As part of the Group’s risk

management procedures, the Board

takes account of the significance

of environmental matters (including

climate) to the business. The Board

factors into the risk assessment impact,

likelihood, and appetite considerations,

and risk is managed across the Group

in the context of the Board’s overall risk

appetite. Business risks are identified,

assessed, managed, monitored, and

reported in accordance with the Risk

Management Policy (see the Risk

Management Strategy section of the

Annual Report). As part of this process,

management are advised by external

advisers on emerging regulatory

risks. Business Functions also identify

climate-related risks and opportunities,

and these issues are cascaded

upwards by the Heads of Functions

for discussion at the ESG Forum for

consideration and assessment by the

ESG and Sustainability Director.

This year, climate-related scenario

analysis has been performed for the

first time. The risks and opportunities of

transitioning to a low-carbon economy

have been discussed and analysed

by management during the scenario

analysis, and a non-executive director

was also present during the scenario

analysis workshops. The climate-

related scenario analysis results were

presented to the ESG Committee of

the Board, and this has influenced the

climate strategy for the Zero Carbon

Report 2022, which is approved by

the Board. In 2022, climate risk has

been added to the Group Risk Register

for the first time for monitoring by

the Board, and the material climate-

related risks have been mapped

against other business risks according

to the materiality, nature, and size of

their impact.

FUTURE PRIORITIES

In 2023, the Group may complete the

following work on its climate strategy

to further enhance and increase the

quality of its TCFD disclosures:

• The scenario analysis output will

inform strategic and financial

planning cycles moving forward

and metrics to monitor climate-

related risks and potential financial

impacts developed as required (to

meet the TCFD Recommendation for

Strategy, part b).

• Climate change risk mitigation

and adaptation strategies will be

developed, whilst also considering

policies that take advantage of any

opportunities identified.

• The appropriateness of a granular

review of climate change risks and

opportunities to look at the different

geographies and business models

utilised throughout the Group, using

a divisional, brand and Group lens

will be considered.

In the longer-term, a more detailed

quantitative scenario analysis approach

will be developed to enhance future

TCFD reporting disclosures.

Throughout 2023, the Group will

continue to develop the climate risk

management processes and may

consider the following actions:

• The Group may develop a

different risk register for different

geographical regions (such as the

US) where the regulatory landscape

is different.

• The ESG and Sustainability Director

will oversee the dissemination of

responsibilities for the material

climate-related risks and

opportunities identified during the

scenario analysis.

• The climate-related risks will be

reviewed on a regular basis to

ensure they are up to date with the

most recent scientific understanding

and legislative requirements.

METRICS AND TARGETS

The data for the Group’s climate-

related metrics and targets and

its streamlined energy and carbon

reporting requirements are found in

the ESG Supplementary Information

section. Decarbonisation metrics and

the risks involved in reducing the GHG

emissions are also discussed in the

Zero Carbon Report 2022.

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MONITORING 888’S PROGRESS – TCFD CROSS-INDUSTRY CLIMATE-RELATED METRICS AND TARGETS

The Group continually reviews its climate metrics and targets to ensure the underlying data is accurate and complete, and

to ensure the metrics are providing the information the business and stakeholders need to monitor performance and review

888’s progress. Following the completion of this year’s climate scenario analysis, the Group is considering its position in

respect of developing further TCFD cross-industry climate-related metrics and targets. Figure 9 below outlines the Group’s

approach and progress with the TCFD cross-industry metrics.

Figure 9: 888’s approach and progress with the TCFD cross-industry metrics

TCFD cross-industry

metric category 888’s approach 2022 progress and future priorities

GHG emissions

Metrics

The Group’s absolute GHG emissions

and emissions intensity ratios are

found in the ESG Supplementary

Information section. Decarbonisation

metrics and the risks involved in

reducing the GHG emissions are

discussed in the Zero Carbon

Report 2022. The methodology for

calculating the GHG emissions is

contained within Appendix 2 of the

Zero Carbon Report 2022.

888’s targets set in 2021 (excluding

William Hill):

Net zero target (Scope 1 and

2) by 2030 – by achieving an

80% reduction in Scope 1 and 2

emissions and using 20% carbon

removal offsets.

Net zero target (Scope 3) by 2035 –

by achieving the ‘80 by 60 strategy’

and using high-quality carbon

removals. Both targets outlined in the

Zero Carbon Report 2022.

888’s progress with meeting the net zero targets is

outlined in the Zero Carbon Report 2022. In 2023,

the Group needs to integrate William Hill’s data,

exclude 888’s bingo business data, and re-baseline

all targets (TCFD Recommendation for Metrics

and Targets, parts a, and c). The GHG accounting

methodology should also be updated for William

Hill. Once the Group has recalculated the baseline

for the emissions targets, it intends to seek third-

party validation over its commitments and may

consider third party assurance over emissions data.

The Group may also consider the need to develop a

robust climate reporting controls framework to align

with financial reporting.

Environmental metrics and targets

888’s wider environmental initiatives are monitored

and tracked internally but have not been reported

to date. In 2019, William Hill set environmental

targets and progress to date is shown in the ESG

Supplementary Information section. In 2023, the

Group may also consider including metrics and

targets associated with water, waste management

etc. (where relevant and applicable) across the

enlarged Group.

Transition risks

Scenario analysis was completed in

2022, which identified three material

transition risks, including:

• Regulations being introduced to

place a ban on fossil fuels and/

or the introduction of legislation

to favour renewable energy

generation; and

• Economic constraints in a low-

carbon economy may result in

customers having less disposable

income to spend on leisure and

gambling activities.

Priority 1 of the transition plan will reduce 888’s

exposure to regulatory transition risks (see Zero

Carbon Report 2022 for further detail). A renewable

energy metric is disclosed to track the 888’s progress

against the switch to renewable energy.

Following the scenario analysis, and as the

transition plan develops, the Group will review

the appropriateness of developing future metrics

surrounding the amount and extent of the business

activities vulnerable to transition risks. For example,

the Group may also consider the use of modelling

around average customer disposable income, by

country or region, to understand the impact of low-

carbon economic constraints on future revenues.

888 Holdings PLC Annual Report & Accounts 202280

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TCFD cross-industry

metric category 888’s approach 2022 progress and future priorities

Physical risks

Scenario analysis was completed in

2022, which identified three material

physical risks.

One of the physical risks related

to coastal flooding driven by sea

level rise.

Following the scenario analysis and as the

transition plan develops, the Group will review

the appropriateness of developing future metrics

surrounding the amount and extent of the business

activities vulnerable to physical risks. For example,

the Group will consider mapping which sites will be

impacted directly by flooding and develop a metric

for tracking vulnerable sites.

Climate-

opportunities

Scenario analysis was completed

in 2022, which identified material

climate-related opportunities, including:

• reducing emissions from employee

commuting; and

• energy efficiency and long- term

energy security from renewable

energy generation.

Priority 3 of the Zero Carbon Report 2022 tracks

progress against the Greener Travel priority

(including employee commuting). Priority 1 of the

Zero Carbon Report 2022, tracks progress against

the switch to renewable energy. Smart meters have

been installed across the UK retail estate to track

energy efficiency and investment in renewable

energy generation is being considered. The

Group will review whether any further metrics for

climate-related opportunities are required in future

reporting periods.

Capital

deployment

The ESG Committee of the Board will

review and approve the expected

cost of delivering on the Group’s

decarbonisation ambitions over

time, which is likely to be the biggest

climate-related requirement for

capital deployment.

The Group is considering the financial plans for its

decarbonisation ambitions and whether to develop

a long-term green energy strategy and budget, to

ensure investment in renewable energy is maintained.

The Group will consider whether any further metrics

and targets for capital deployment are required in

future reporting periods.

Internal

carbon prices

An internal carbon price has not

been adopted by the Group to

date as the focus has been on

integrating the William Hill business

and implementing the three priority

initiatives to reduce GHG emissions.

In 2023, the Group will continue to review and

evaluate whether the use of internal carbon prices

would be appropriate to assist to incentivise

decarbonisation across its operations given the

scale of the consolidated GHG emissions for 888

andWilliam Hill.

Executive

remuneration

The ESG Committee of the Board

reviews the implementation of the

ESG strategy and considers the

extent to which additional ESG

metrics and targets (including

climate) should be incorporated into

executive remuneration.

2022’s executive bonus structure includes some ESG

components across the 3 pillars of the strategy.

In 2023, climate-based targets will be included

in the executive bonus remuneration, alongside

a safer gambling metric. Should any additional

climate metrics and targets be incorporated into

executive remuneration, this will be disclosed in future

reporting periods.

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Data presentation

The data shown for the GHG absolute emissions is measured in tonnes of CO2e (‘tCO2e’). The acquisition of William Hill

completed on 1 July 2022, and as such, William Hill’s GHG emissions are only consolidated for the period of the Group’s

ownership, for the six months from 1 July 2022 to 31 December 2022. The Group also sold 888’s bingo business on 7 July

2022 and its historical emissions include those for 888’s bingo business. The Group is choosing to report the emissions data

for FY22 separately for 888 and William Hill to make the emissions comparable to 2021 reporting and to highlight progress

against 888’s targets. The targets will be re-baselined next year to reflect the acquisition of William Hill and the divestment of

888 bingo.

All figures are reported under the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol)

and Scope 3 emissions were calculated using the GHG Protocol Corporate Value Chain. The calculation methodology for

GHG emissions is outlined in full in Appendix 2 to the Zero Carbon Report 2022.

Figure 10: 888’s net zero targets (excluding William Hill) and absolute GHG emissions

Scope Targets

2019

Baseline

(tCO

FY22

Global

emissions

(tCO

FY21

Global

emissions

(tCO

FY21/22

% change

888 (excluding William Hill)

Scope 1

Net zero by 2030: achieve 80%

reduction in Total Scope 1 & 2 from 2019

baseline (market-based)

745

1 2900%

Scope 2

(marketbased)

3,152

2,171

3,088 (30%)

Total Scope 1-2

(market-based)

3,897

2,201

44% reduction

from 2019)

3,089 (29%)

Scope 2

(location-based)

3,152

2,300

3,088 (26%)

Scope 3

Net Zero by 2035: using the ‘80by 60’

strategy

N/a

23,419

26,020 (10%)

ESG SUPPLEMENTARY INFORMATION

Climate reporting – GHG emissions (TCFD reporting)

888 Holdings PLC Annual Report & Accounts 202282

STRATEGIC REPORT

Scope Targets

2019

Baseline

(tCO

FY22

Global

emissions

(tCO

FY21

Global

emissions

(tCO

FY21/22

% change

William Hill

Scope 1

Targets for the enlarged 888 Group

to be re-baselined in FY23

N/a

473

William Hill was outside

of 888’s operational

control in FY21

Scope 2

(market-based)

397

Scope 2

(location-based)

5,572

Scope 3

(market-based)

35,416

Scope 3

(location-based)

37,501

888 Group (including William Hill)

Scope 1)

Targets for the enlarged 888 Group

to be re-baselined in FY23

N/a

503

William Hill was outside

of 888’s operational

control in FY21

Scope 2

(market-based)

2,568

Scope 2

(location-based)

7,872

Scope 3

(market-based)

58,835

Scope 3

(location-based)

60,920

A-C

All figures reported under the GHG Protocol and the GHG Protocol Corporate Value Chain. The Group is choosing to report the emissions data separately for

888 (excluding William Hill), William Hill and the consolidated Group position, to make the emissions comparable to 2021 reporting and to highlight progress

against targets set by 888 in 2021. The targets will be re-baselined next year to reflect the acquisition of William Hill and the divestment of 888 Bingo. The 888

Group position

is calculated by adding the emissions of 888 (excluding William Hill)

to William Hill’s emissions for the period of six months from 1 July 2022 to

31December 2022

. It is acknowledged that the pro-rata method ignores the seasonality of the underlying data.

Total direct (Scope 1) GHG emissions from assets and activities under operational control. The Scope 1 calculation methodology for FY22 is detailed in

Appendix2 of the Zero Carbon Report 2022. The 2900% increase in Scope 1 emissions from FY21 is due to the introduction of gas in the Romania office in 2022.

Total indirect GHG emissions (Scope 2) from consumption of purchased electricity, heat or steam energy using both the location-based and market-based

approach as applicable. Scope 2 location-based emissions are 2,300 tCO

e. 888’s Romania office is powered by renewable energy so on a market-based

approach it has zero emissions, and the Scope 2 emissions are only 2,171 tCO

e. William Hill’s UK retail estate is powered by renewable energy so on a market-

based approach, it has zero emissions and the residual Scope 2 emissions of 397 tCO

e are for the international sites. Scope 2 emissions on a location-based

approach are 5,572 tCO

e for the UK retail and international sites. The Scope 2 calculation methodology for FY22 is detailed in Appendix 2 of the Zero Carbon

Report 2022.

Total other indirect GHG emissions (Scope 3) not covered in Scope 2 that occur in the value chain, including both upstream and downstream emissions. First

comprehensive study of 888’s Scope 3 footprint conducted in 2021. The Scope 3 calculation methodology for FY22 is detailed in Appendix 2 of the Zero Carbon

Report 2022. Scope 3, Category 3 shown using the market-based and location-based methods and Figure 11 contains the Scope 3 emissions per category.

The 2019 baseline for total Scope 1 and 2 GHG emissions for 888 (excluding William Hill) was 3,897 tonnes of CO

e. The Group plans to use carbon removal offsets

for the remaining 20% of emissions to achieve net zero by 2030.

The ’80 by 60’ strategy – by 2025 both large and smaller vendors representing 60% of 888’s third-party supplier spend should have carbon reduction plans

in place and that these plans will be targeting an 80% fall in their emissions by 2035. The Group will invest in carbon removal offsets for the remaining indirect

emissions to reach net zero by 2035.

The Group will re-baseline its targets in FY23 after William Hill’s data has been fully integrated into the Group and 888 Bingo’s data has been excluded. Note that

future acquisition and divestments could have a material impact on meeting the targets.

Estimates for the full 2022 reporting year were still being finalised at the time of reporting and may be revised in subsequent reporting.

888 Holdings PLC Annual Report & Accounts 2022 83

STRATEGIC REPORT

Figure 11 – 888’s Scope 3 emissions per category

FY22

Global

emissions

(tCO

% of

Total

Scope 3

emissions

888 Group (including William Hill)

A-C

Purchased Goods & Services 48,181 82%

Business Travel 2,066 4%

Investments 1,943 3%

Capital Goods 1,846 3%

Upstream Transportation & Distribution 1,834 3%

Employee Commuting 1,681 3%

Fuel & Energy-related Activities 1,018 2%

Waste Generated in Operations 159 0%

Downstream Leased Assets 107 0%

Total Scope 3 (market-based)

58,835 100%

Scope 3 emissions were calculated using the GHG Protocol Corporate Value Chain. The Scope 3 calculation methodology for FY22 is detailed in Appendix 2 of

the Zero Carbon Report 2022. The emissions shown are for the consolidated 888 Group. The 888 Group position

is calculated by adding the emissions of 888

(excluding William Hill)

to William Hill’s emissions for the period of six months from 1 July 2022 to 31 December 2022

Streamlined energy carbon reporting requirements (SECR)

The Group’s streamlined energy and carbon reporting requirements (SECR) are shown in Figure 12. The methodology used is

the GHG Protocol. The energy and carbon reports are aligned with the boundaries of the financial statements (i.e., reporting

only includes William Hill’s energy and carbon data for the six-month period of ownership by the Group). Energy efficiency

actions taken are detailed in the Zero Carbon Report 2022 and include smart electricity meters being rolled out across

William Hill’s UK retail estate and better monitoring of energy consumption.

Intensity ratio

For SECR reporting purposes, 888 (excluding William Hill) has historically reported its:

• GHG emissions per headcount (tCO

e/employee);

• emissions per turnover in USD (tCO

e/US $m); and

• emissions per square metre area of offices (tCO

e/m

William Hill has historically reported its emissions intensity ratio in relation to turnover (tCO2 e/£1 million of group turnover).

Due to data constraints following the integration of William Hill, this year the Group is reporting only one emissions intensity

ratio – the emissions intensity per turnover (tCO2e/£ million).

The Group’s emissions intensity measurement increased significantly this year due to the acquisition of William Hill and its

large UK retail estate, which has increased the Group’s GHG emissions. The Group’s energy consumption also increased due

to this acquisition.

888’s historical emissions intensity ratios are outlined in Figure 13 for year-on-year comparison purposes only. Excluding the

impact of the acquisition of William Hill, 888’s emissions intensity per turnover ratio reduced to 2.53 this year from 4.20 in the

prior year due to a 25% reduction in total Scope 1 and 2 emissions (location-based) and a reduction in 888’s turnover.

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Climate reporting – GHG emissions (TCFD reporting) continued

Data presentation continued

888 Holdings PLC Annual Report & Accounts 202284

STRATEGIC REPORT

Figure 12 – 888’s energy and GHG emissions intensity ratio

2022 2021

Global

UK &

offshore

Global

(excluding

UK &

offshore) Global

UK &

offshore

Global

(excluding

UK &

offshore)

888 Group

A-C

Energy consumption (kWh)

36,258,669 28,191,674 8,066,995 8,246,662 606,540 7,640,122

Scope 1 emissions (tCO

e) 503 344 159 1 — 1

Scope 2 emissions (tCO

e) 7,872 5,179 2,693 3,088 128

2,960

Total Scope 1 and 2 emissions (tCO

e) 8,375 5,523 2,852 3,089 128

2,961

Emissions per turnover tCO

e/£m

6.76

(£1,239 m)

12.68

(£435 m)

3.55

(£804 m)

4.20

(£736 m)

0.44

(£287 m)

6.60

(£449 m)

A-C

All figures reported under the GHG Protocol. Scope 2 emissions calculated using the location-based method. The calculation methodology for FY22 is detailed in

Appendix 2 of the Zero Carbon Report 2022. The 888 Group position

is calculated by adding the data of 888 (excluding William Hill)

to William Hill’s data for the

period of six months from July to December 2022

FY22 UK energy consumption data shown for William Hill only. 888’s UK data centre closed in September 2021 and the UK office consumption is immaterial

because 888’s UK office closed in July 2022.

FY21 energy consumption for UK office restated from 14 tCO

e to 128 tCO

e (UK data centre of 114 tCO

e is now included).

Turnover for the Group re-stated for FY21 in GBP (previously reported in USD – Global revenue $996m, UK revenue $389m) using an exchange rate of 1: 0.739, USD:

GBP from 31 December 2021.

Estimates for the full 2022 reporting year were still being finalised at the time of reporting and may be revised in subsequent reporting.

‘UK & offshore area’ includes UK data (excluding the British Overseas Territory, Gibraltar).

Figure 13 – 888’s global energy and GHG emissions intensity ratios (excluding William Hill)

2022 2021

Ratio

Parameter

amount Ratio

Parameter

amount

888 (excluding William Hill)

Global energy consumption (kWh) 7,001,279 8,246,662

Scope 1 emissions (tCO

e) 30 1

Scope 2 emissions (tCO

e) 2,300 3,088

Total Scope 1 and 2 emissions (tCO

e) 2,330 3,089

Emissions per turnover tCO

e/£m

2.53 £624.5 m 4.20 £736 m

Emissions per headcount tCO

e/employee 1.29 1,808 emp 1.60 1,900 emp

Emission per square metre area ofofficestCO

e/m

office area

0.12 18,793 sqm 0.15 21,150 sqm

All figures reported under the GHG Protocol. Location-based method used for Scope 2 emissions. Total Scope 1 and 2 emissions are 2,201 tCO

e on a market-

based approach. Data shown is for 888 (excluding William Hill) for comparison purposes only. The calculation methodology for FY22 is detailed in Appendix 2

of the Zero Carbon Report 2022. Energy consumption reduced based on prior year due to the closure of the UK data centre and a reduction in activity at the

European data centre.

Estimates for the full 2022 reporting year were still being finalised at the time of reporting and may be revised in subsequent reporting.

Turnover for the Group re-stated for FY21 in GBP (previously stated in USD – Global revenue $996m) using an exchange rate of 1: 0.739, USD: GBP from

31December2021.

Environmental initiatives

The Group is focused on reducing waste, water usage and plastic across its operations. In 2023, the Group will review the

appropriateness of disclosing wider environmental metrics and targets to track performance after the integration of William

Hill’s environmental data.

888 Holdings PLC Annual Report & Accounts 2022 85

STRATEGIC REPORT

888’s key wider environmental initiatives in 2022:

• Paper: progress has been made by employing ‘DocuSign’ for employee contracts to reduce paper consumption.

• Waste: there has been a review of waste segregation in the Israel office.

• Water: in the Romania office, motion sensors were introduced to reduce water loss.

• Plastic: 888 partnered with ECOSEC, the provider of tamper evident security solutions, to use its biodegradable poker chip

bags at live events, starting with 888poker LIVE in Barcelona. This was the first time that the Group, or any major operator

in the sector, had incorporated biodegradable chip bags at a live event. The initial purchase will remove approximately

130 kilograms of plastic from circulation.

William Hill’s environmental initiatives (set prior to acquisition by 888)

In 2019 and prior to the acquisition by 888, William Hill set five-year environmental targets for 2024 (2019 baseline) and

this year’s progress against these targets is shown in Figure 14. Energy efficiency actions taken by William Hill and key

environmental initiatives in 2022 are shown below:

• Energy – a full retail rollout of smart electricity metering across the UK retail estate, which will allow better monitoring of

energy consumption to lower energy usage and overall carbon. An Energy Focus week ran in Retail to make sure staff are

promoting good energy control and using best practice of its energy saving initiatives. This year there has been a 2%

increase in global energy consumption compared to FY21 because William Hill was closed for three months in 2021 (due

to COVID-19 restrictions). William Hill also achieved its goal and became certified as carbon neutral in 2022 (see GHG

emissions discussion below).

• Waste – significant progress has been made on the target to reduce William Hill’s waste to landfill by 30% and to make

sure that 95% of waste never goes to landfill. In 2022, William Hill achieved a 73% improvement compared to the 2019

baseline for waste to landfill, and landfill diversion currently sits at 92%, compared to the target of 95%. The total waste

tonnes increased slightly by 28% on prior year because of the impact of COVID-19 rules (William Hill was closed for three

months of the year in 2021).

• Vehicles – real progress has been made on the target to make the transport fleet 30% electric/hybrid. In 2022, 24% of the

fleet is electric/hybrid compared to only 19% in 2021, due to policy and employee choice initiatives. In 2022, the company

vehicle fleet reduced from 180 to 139 vehicles, which was due to policy changes and further scrutiny on employee vehicle

requirements.

• Water – reducing William Hill’s water consumption is a focus area and water consumption fell by 21% in 2022. This is partly

related to the impact of COVID-19 in 2021 (when William Hill was closed for three months), water saving initiatives and

subsequent re-billing from suppliers.

• Video Conferencing – to reduce business travel, William Hill set a pre-COVID-19 target in 2018 to increase its utilisation of

video conferencing by 400%. In 2022, there has been an estimated 445% increase in the use of video conferencing since

2018 as hybrid working business practices have evolved.

• Paper – William Hill launched a new innovative and digital-focused shop, which is paperless, as a pilot in Leeds to reduce

paper consumption. The success of this pilot will be reviewed in 2023.

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888 Holdings PLC Annual Report & Accounts 202286

STRATEGIC REPORT

Figure 14: William Hill’s environmental targets and FY22 progress

Corporate metric

2024 Target

Base

line

FY22

Absolute

amount

FY21

Absolute

amount

FY20

Absolute

amount

FY21/22

Movement

Annual global energy use

(kW/h)

Annual global energy use

(kW/h)

N/a

54,862,751

53,670,742 45,008,806 2%

Waste to landfill (tonnes) 30% improvement from

2019 baseline

587

(2019)

158

(73%)

137 257 15%

Landfill diversion (tonnes) See below N/a

1,769

1,382 2,520 28%

Landfill % 95% landfill diversion 81%

92%

91% 83% 1%

Fleet target to be electric/

plug-in hybrid/

electric vehicle

30% of fleet to be electric/

plug-in hybrid

N/a

24%

19% 13% 26%

Water (m

)

Water baselined to assess

water saving initiatives

270,000

(1,414

shop

estate)

262,095

(1,407

shop

estate)

332, 581 222,915 (21%)

Video Conferencing

(no. of monthly meetings)

Increase of 400%

from2018

76,043

(2018)

414,138

(445%

increase

from 2018)

365,000 336,149 13%

Historical data shown for FY20-21 for William Hill Limited (formerly William Hill PLC) for the full twelve months in the reporting period. William Hill was acquired by

888 Holdings PLC on 1 July 2022 and the data shown is William Hill’s operational data for the full twelve months in 2022.

Comparator for FY21 re-stated to a more accurate value of 332,581 m

from 339,649 m

which was based on an estimate for December 2021 figures. William Hill now

owns 1,407 shops in the retail estate.

William Hill changed third party providers for video conferencing facilities during the year. This total represents the data for the old provider plus an estimate for

the full year for the new provider (as data is only stored for 6 months – 83,569 meetings in that period). Comparator for FY21 re-stated to 365,000 from 367,791

meetings, which was based on an estimate for December 2021 figures.

William Hill’s GHG emissions

William Hill achieved its goal and became certified as carbon neutral in 2022 (Scope 1 and 2) through investing in carbon

offsetting projects. William Hill’s total Scope 1 and 2 emissions (location-based) decreased by 9% from prior year (see Table

Figure 13). The larger decrease in Scope 1 and 2 (location based) emissions compared to the 2% increase in global energy

use, is explained by electricity grids becoming greener. This leads to an average reduction in emission factors in countries

where William Hill operates (for example, in the UK there has been a 9% decrease in the emissions factor for FY22/21 due to a

decrease in coal use in electricity generation and an increase in renewable generation).

Figure 15: William Hill’s absolute GHG emissions

GHG emissions

FY22

Absolute

amount

FY21

Absolute

amount

FY20

Absolute

amount

FY21/22

Movement

Scope 1 (tCO

945

1,025 1,263 (8%)

Scope 2 (tCO

(market-based)

795

1,390 N/a (43%)

Scope 2 (tCO

(location-based)

11,144

12,218 11,237 (9%)

Total Scope 1 &2

(market-based) (tCO

1,740

2,416 N/a (28%)

Total Scope 1 &2 (location-based) (tCO

12,089

13,243 12,499 (9%)

Scope 3 (market-based) (tCO

70,831

69,216 N/a 2%

Scope 3 (location-based) (tCO

75,002

73,246 N/a 2%

All figures reported under the GHG Protocol and the GHG Protocol Corporate Value Chain. Historical data shown for FY20-21 for William Hill Limited (formerly

William Hill PLC) for the full twelve months in the reporting period. William Hill was acquired by 888 Holdings PLC on 1 July 2022 and the data shown is William Hill’s

operational data for the full twelve months in 2022. Scope 2 emissions shown on both a location-based and market-based approach, and the difference is due to

theUK retail estate which has zero emissions on the market-based approach as it is supplied by renewable energy.

FY21 Scope 1 and 2 emissions include the US emissions which are excluded from the FY22 calculations (William Hill vacated the US in 2022). The FY21/22 movement

in Scope 1 emissions on a like-for-like basis (excluding the US) relates to an increase in the use of company vehicles and air conditioning in the UK. TheFY21/22

movement in the Scope 2 (market-based) emissions on a like-for-like basis (excluding the US) is mainly due to a fall in electricity use in Gibraltar. Onalocation-

based method, the FY21/22 Scope 2 movement is mainly due to a fall in electricity use in the UK.

William Hill calculated its Scope 3 emissions (which include indirect emissions across its value chain) for the first time this

year and the baseline year is 2021. William Hill’s Scope 3 emissions (market-based) increased by 2% on the prior year and

the most significant emission category is Purchased Goods and Services (including Capital Goods) (see Figure 16). The most

significant increase in Scope 3 emissions since the previous year is associated with Upstream Transportation and Distribution

(mainly for courier services for the retail estate), Employee Commuting and Business Travel (particularly air travel and hotel

stays) as restrictions from COVID-19 were relaxed this year.

888 Holdings PLC Annual Report & Accounts 2022 87

STRATEGIC REPORT

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Figure 16: William Hill’s Scope 3 emissions per category

Scope 3 Category

FY22

Absolute

amount

% of Total

Scope 3

emissions

Purchased Goods & Services (including Capital Goods)

62,357

88%

Upstream Transportation and Distribution

3,668

Employee Commuting

2,354

Business Travel

1,889

Fuel & Energy-related Activities

252

Investments

194

Waste Generated in Operations

117

Total Scope 3 (market-based) 70,831

100%

Scope 3 emissions were calculated using the GHG Protocol Corporate Value Chain. The Scope 3 calculation methodology for FY22 is detailed in Appendix 2 of

the Zero Carbon Report 2022. William Hill was acquired by 888 Holdings PLC on 1 July 2022 and the data shown is William Hill’s operational data for the full twelve

months in 2022.

Business Travel is the sum of the emissions for flights, hotels, rail travel, taxi travel and employees’ grey fleet.

Climate scenario analysis methodology (TCFD reporting)

The Group has performed climate-related scenario analysis for the first time this year under the guidance of external

advisers and the methodology used is outlined below.

The scenario analysis was completed in line with recommendations published by the TCFD and aligns closely with ISO 14091

(2021) and other reference publicly available resources. A qualitative approach was used and the level of action required

to respond to the risk was identified. This approach was used to ensure that a clear narrative around the scenarios and the

associated risks was developed first before attempting extensive quantification, which without the former may have been

arbitrary. The key features of the climate scenarios are detailed in Figure 4 and the results of the scenario analysis are shown

in the TCFD Report Figures 6 and 7.

Limitations of the scenario analysis process

The following limitations were identified by external advisers during the scenario analysis process:

• The definition of likelihood is assigned based on qualitative (opinions using scientific understanding of climate change

and timescales) rather than quantitative aspects. This may allow for inconsistencies in determining likelihood, which is

subsequently used to rank risks by materiality. When revisiting scenario analysis in the future other variables in place of

‘likelihood’ could be used to assign materiality such as ‘impact on company objectives vs level of action required’.

• The scenarios are built around published climate models, reports, and other resources. There are limitations within the

climate models themselves and the narrative these generate due to the high levels of scientific uncertainties embedded

into climate change.

• The scenario analysis considers three time horizons, one of which (short) is only up to 5 years. Company strategy is often

built around short time horizons (financial forecasts and company objectives etc.) rather than long time horizons (e.g. up

to 2050) timescales due to increased uncertainty. Considering long time horizons is often unfamiliar and uncomfortable for

organisations but is a requirement when considering impacts of climate change. This should be an area for improvement

when reviewing climate scenario analysis in the future and 888 should begin to consider a wider range of time horizons.

The following climate-related risk terminology has been used in the scenario analysis:

• Materiality: A simple materiality matrix based on likelihood and level of action required was developed using orders

of magnitude. An uplift based on the warming scenario being considered was applied to account for a higher level of

physical risk under more extreme warming conditions, and higher transitional risk under lower warming scenarios.

• Transitional risk: Policy and legislation changes and advances in infrastructure and technology that are driven by

climate-change.

• Mitigation: Avoiding and reducing emissions of GHG emissions into the atmosphere to prevent the planet fromwarming

tomore extremetemperatures.

• Physical risk (acute): Short-term events that have the potential for significant physical impact to the local environment

e.g., hurricane, storm surge, wildfire.

• Physical risk (chronic): Long-term physical processes that have the potential for significant physical impact on either

awider geographical scale and/or for prolonged periods of time.

• Adaptation: Adaptation relates to actions that reduce the negative impact of climate change, while taking advantage

ofpotential newopportunities.

ESG SUPPLEMENTARY INFORMATION CONTINUED

William Hill’s GHG emissions continued

888 Holdings PLC Annual Report & Accounts 202288

STRATEGIC REPORT

89888 Holdings PLC Annual Report & Accounts 2022

An experienced Board

BOARD OF DIRECTORS

1 / Lord Mendelsohn

Executive Chair

Lord Mendelsohn was appointed as

Non-Executive Chair of the Board in

March 2021. He is a highly experienced

gambling sector professional with more

than 20 years’ industry experience that

includes co-founding Oakvale Capital

LLP, a leading M&A and strategic

advisory boutique focusing on the

gaming, gambling and sports sectors.

He also serves as Senior Adviser to Value

Retail Plc and RG Advisors.

He cofounded LLM Communications, a

corporate and public affairs consultancy

which was acquired by Financial

Dynamics and served as a Managing

Director and later as Chair of the Global

Issues Division, including after it was

acquired by FTI Consulting. He is an

investor in early stage and start-up

companies in various sectors including

technology, leisure and energy.

Lord Mendelsohn is a Working Life

Peer who has been a member of the

House of Lords since October 2013.

He has served as a Shadow Minister

for Business,International Trade and

Innovation and Skills.

Lord Mendelsohn was a member of the

Audit and Remuneration Committees

until his appointment as Chair of the

Board in March 2021. He was Chair of the

ESG Committee until his appointment as

Executive Chair in January 2023.

Age 56.

2/ Anne de Kerckhove

Independent Non-Executive Director,

SeniorIndependent Director

Anne was appointed Senior Independent

Director on 17 March 2021, and is

Chair of the Company’s Nominations

and Remuneration Committees and a

member of the Company’s Audit and ESG

Committees. Anne was also appointed as

the Workforce Engagement Designated

Non-Executive in July 2022.

Anne was until recently the CEO of

Freespee, a fast growing company in

the conversational commerce space.

Previously, she was the CEO of Iron Capital

and the Managing Director EMEA for

Videology, Global Director of Reed

Elsevier, and COO and International

Managing Director at Inspired Gaming

Group. Anne is an angel investor and

mentor for early-stage start-ups and

entrepreneurial funds including CRE

and Daphni. She holds a Bachelor of

Commerce from McGill University and

anMBA from INSEAD.

Age 50.

1 / 2 / 3 /

4 / 5 / 6 /

7 / 8 /

Male 4

Female 4

Board gender

diversity

iNEDs 5

NEDs 1

Executive Directors 2

Independence

A Audit Committee

E ESG Committee

N Nominations Committee

Gaming Compliance

Committee

R Remuneration Committee

C Chair

2022 WAS YEAR OF EXCEPTIONAL CHANGE FOR

THE GROUP. DURING THE FIRST HALF OF THE

YEAR THE FOCUS OF THE BOARD WAS ON THE

TRANSFORMATIONAL ACQUISITION OF WILLIAM HILL.

Following completion of the acquisition, the appointment of three additional

board members has not only brought extensive and highly relevant skills and

experience to the Board, but it has also further strengthened the Group’s

corporate governance structure. This has been of significant benefit to the Group

during the second half of 2022 as it laid out a competitive plan at its Capital

Markets Day, to delivers its long-term strategic objectives as an enlarged business

following the acquisition of William Hill.

888 Holdings PLC Annual Report & Accounts 202290

GOVERNANCE

3/ Yariv Dafna

Chief Financial Officer

Yariv was appointed as CFO of the

Company and joined the Board on

1November 2020. Yariv was appointed

as a member of the Gaming Compliance

Committee in May 2021.

Yariv held a number of positions with Telit

Communications plc since 2003, taking

an active role in its IPO in 2005 and

subsequent fundraisings. His positions

at Telit included Group CFO from 2007

to 2012, Chief Corporate Development

Officer with responsibility for all M&A

activity, and subsequently also COO,

with responsibility for all operation and

purchasing activities. In November

2017, he was appointed to Telit’s Board

as Finance Director with responsibility

for finance, legal, IT and corporate

development activities.

Yariv started his career in 1999 at

Deloitte Israel and holds a BA in Business

Administration and Accounting from

the College of Management Academic

Studies, an MBA from Tel Aviv University,

and is a Certified Public Accountant.

Yariv will step down from his role at the

end of 2023.

Age 49.

4/ Mark Summerfield

Independent Non-Executive Director

Mark worked as a Chartered Accountant

for KPMG in the UK and US for 29 years,

18 as a partner. His roles included Global

Head of Gaming, UK Head of Audit

for Technology, Media and Telecoms

(“TMT”) and UK Head of Assurance. He

has extensive knowledge and experience

in auditing, financial reporting and

governance, as well as mergers and

acquisitions and capital market transactions.

Mark spent most of his career working

for companies in the TMT and leisure

sectors and built KPMG’s gaming practice,

working with a number of online gaming

operators. He was also William Hill’s

interim CFO for 15 months, helping set

the Group’s strategic direction and

assisting with its transformation and

technologyprogrammes.

Mark was appointed as Non-Executive

Director and Chair of the Audit

Committee in September 2019. He is

also a member of the Company’s ESG,

Remuneration, Nominations and Gaming

Compliance Committees.

Age 56.

5/ Limor Ganot

Independent Non-Executive Director

Limor was appointed as a Non-executive

Director of the Company in August 2020

and in April 2021, was appointed to the

Company’s Audit and Remuneration

Committee. She is managing partner

of Gefen Capital, a US-Israeli venture

capital fund that invests in disruptive

technologies, a board member of Diners

Club Israel, and former co-CEO of Alon

Blue Square Israel. She is a certified

public accountant who started her

professional journey in the corporate

finance division at KPMG, and received

her Bachelors of Science in Accounting

and Economics from Tel Aviv University.

Age 50.

6/ Andrea Gisle Joosen

Independent Non-Executive Director

Andrea was appointed as a non-

executive director of the Company in

July 2022. She is a highly experienced

non-executive director, having held

leadership positions across multiple

international technology and consumer

industries companies. She currently

serves as a Non-executive Director for

Currys plc and Billerud AB. She previously

chaired Sweden-headquartered Acast

AB and was a Non-executive Director at

ICA Gruppen, James Hardie Industries

plc and Mr Green & Co, the online

gaming business which was acquired

by William Hill plc in 2018. During her

executive career, Andrea has held

numerous leadership roles in the media

and technology sectors including as CEO

of Boxer TV Sweden and as Managing

Director of Nordics for Panasonic,

Chantelle Group and Twentieth

CenturyFox.

Andrea has a BSc in Business

Administration and MSc in International

Marketing from Copenhagen Business

School. She has also completed

Executive Education at Harvard Business

School in both Effective Negotiations

and Audit Committees in a New Era

ofGovernance.

Age 59.

7/ Andria Vidler

Independent Non-executive

Andria was appointed as non-executive

director in July 2022 and Chair of the

ESG Committee in January 2023. She has

30 years’ experience in marketing and

technology, focusing on re-energising

brands through consumer engagement

and digital innovation. Since 2020

she has been the CEO of Tag EMEA,

the independent end-to-end creative

production partner for brands and

agencies. Andria leads the global ESG

strategy for Tag. Andria was previously

CEO of Centaur Media PLC. Prior to

Centaur, Andria spent four years as

CEO for EMI Music UK & Ireland and has

held senior roles at Bauer Media and

the BBC. She was a Non-executive for

Gamesys PLC where she chaired the ESG

committee. She has previously served

as a Trustee for the Media Trust and the

Roundhouse Trust and as Chair of the

Marketing Group of Great Britain.

Andria has a BA (Hons) in History

from Anglia Ruskin University and an

MBA fromthe University of Bradford.

In 2021she also undertook the Oxford

University Leading Sustainable

Corporations Programme.

Age 56.

8/ Ori Shaked

Non-Executive Director

Ori was appointed to the board in

September 2022. He is a gaming

entrepreneur and experienced game

producer. He was previously employed

by the Group until 2017 as a game

producer, online marketer and business

development manager. Ori acts as an

early-stage investor in gaming and

blockchain start-up companies. He holds

a BA in Business Management from

TelAviv University. Ori is not considered

independent following his appointment

by the Group’s largest shareholder, Salix

Trust Company (BVI) Limited, in bare trust

on behalf of Dalia Shaked, in line with its

right to appoint a non-executive director.

Age 39.

NON-EXECUTIVE SKILLS AND EXPERIENCE

Lord

Mendelsohn

Anne De

Kerckhove

Mark

Summerfield

Limor

Ganot

Andrea

Gisle

Joosen

Andria

Vidler

Ori

Shaked

Finance, audit and risk management

Remuneration

Technology

M&A and capital markets

Gambling/gaming

Marketing/Branding

International business

Consumer services

888 Holdings PLC Annual Report & Accounts 2022 91

GOVERNANCE

Leading the way

CORPORATE GOVERNANCE REPORT

Our commitment to corporate

governance is fundamental to

ensuring we operate in a responsible

and transparent manner, delivering

long-term value to our stakeholders,

including our shareholders, employees,

customers, and the communities in

which we operate. With the joining of

888 and William Hill, our governance

framework plays a key role to ensure

that our combined business is

managed effectively, that the Board

has appropriate oversight of strategic

matters and to facilitate an effective

decision-making process.

Although the Company is incorporated

in Gibraltar, the UK Corporate

Governance Code 2018 (the “Code”

or “UK Corporate Governance Code”)

applies pursuant to the UK Listing Rules

as the Company’s Ordinary Shares are

admitted to the premium segment of

the UK Official List and to trading on

the London Stock Exchange’s main

market for listed securities.

This statement also includes items

required by the UK Listing Rules

and the Disclosure Guidance and

Transparency Rules, including how the

“Main Principles” of the UK Corporate

Governance Code have been applied.

For the year ended 31 December

2022, the Company fully complied

with the provisions set out in the Code.

However, following the departure of

Itai Pazner as CEO in January 2023,

Lord Mendelsohn was appointed as

Executive Chair on an interim basis

while a permanent CEO is recruited.

The Board acknowledges that this

does not comply with the provision

of the Code requiring that the roles

of Chair and CEO be exercised

separately. However, it has considered

that this interim measure is in the

best interests of the Company and

its stakeholders to ensure robust

leadership during this transition period.

BOARD LEADERSHIP

The Board of Directors is responsible

for overseeing the management of

the Company and setting its strategic

direction. As at 31 December 2022,

our Board comprised 7 non-executive

directors and 2 executive directors,

all of whom have a range of relevant

skills and experience to bring to

theCompany.

The non-executive directors bring

independent judgement to bear on

issues of strategy, performance, and

risk, and provide constructive challenge

to the executive directors. The

executive directors are responsible for

implementing the Company’s strategy

and delivering its performance.

Meetings and attendance

There are six regularly scheduled

board meetings planned per year.

However, when urgent decision-

making is required between meetings

on matters reserved for the Board,

there is a process in place to facilitate

discussion and decision making. The

Directors regularly communicate and

exchange information irrespective of

the timing of meetings.

Set out below are details of the

Directors’ attendance record at Board

and Committee meetings in 2022. All

meetings in 2022 were held in person

in London apart from the July Board

meeting which was held at 888’s office

in Bucharest in order for the Board

to see local operations and meet

withemployees.

Director meeting attendance for year ended 31 December 2022

Board

Audit

Committee

Remuneration

Committee

Nominations

Committee

ESG

Committee

Gaming

Compliance

Committee

Total held in year 6 5 4 2 3 4

Lord Mendelsohn 6 — — — 3 —

Itai Pazner 6 — — — — —

Yariv Dafna 6 — — — — 4

Anne de Kerckhove 6 4 4 2 3 —

Mark Summerfield 6 5 4 2 3 4

Limor Ganot 6 5 4 — — —

Andrea Gisle Joosen

2 — — — — —

Andria Vidler

3 — — — — —

Ori Shaked

2 — — — — —

Randy Freer

— — — — — —

1. Mr. Michael Alonso is Chair of the Gaming Compliance Committee but is not a Board member.

2. Andrea Gisle Joosen and Andria Vidler were appointed to the Board on 5 July 2022.

3. Ori Shaked was appointed to the Board on 13 September 2022.

4. Randy Freer was appointed to the Board on 5 July 2022 and stepped down on 31 August 2022 and did not attend any board meetings.

888 Holdings PLC Annual Report & Accounts 202292

GOVERNANCE

The Chair has responsibility for

ensuring that agendas for Board

meetings are set in advance. Board

papers are issued to Directors

sufficiently in advance of meetings to

facilitate both informed debate and

timely decisions. If a Director is unable

to attend a meeting, he or she is given

the opportunity to raise any issues

and give any comments to the Chair

inadvance.

None of the Directors have raised

any concerns about the running of

the Company or a proposed action

which needed to be recorded in the

Board minutes of the Company or in a

statement to the Chair for circulation

to the Board.

Meetings with Non-Executive

Directors

At each Board meeting, the Chair

designates time for the Non-Executive

Directors to meet without the Executive

Directors being present.

The Non-Executive Directors also

meet once per year without the

Chair present in order to appraise

the performance of the Chair and

take into account the views of the

Executive Directors. This process is led

by the Senior Independent Director

in accordance with the UK Corporate

Governance Code. This took place in

March 2022.

Audit

Committee

ESG

Committee

Remuneration

Committee

Nominations

Committee

Gaming Compliance

Committee

Assists the Board

indischarging its

responsibilities

for theintegrity

of the Company’s

financial statements,

risk management,

assessment of the

effectiveness of the

system of internal

control and the

effectiveness ofInternal

and ExternalAuditors.

Assist the Board in

definingand reviewing

the Company’s strategy

relating to ESG matters,

setting relevant KPIs,

developing ESG policies

and compliance

withlegal and

regulatoryrequirements.

Determines the

Company’s policy on

theremuneration of

Executive Directors,

other members of the

Executive Committee

and the Chair of the

Board.

The Committee also

reviews workforce

policies and practices.

Assists the Board by

keeping the Board

composition under

review and makes

recommendations

inrelation to Board

appointments. The

Committee also assists

the Board on issues

of Executive Director

succession planning,

conflicts of interest and

independence.

In accordance with

Nevada Gaming Control

Board requirements

the committee is

entrusted with making

sure that the Group’s

licensed gaming activity

is carried out with

honesty and integrity,

in accordance with

high moral, legal and

ethical standards, and

free fromcriminal and

corruptiveelements.

Read more on

pages 102 to 107

Read more on

pages 100 to 101

Read more on

pages 108 to 110

Read more on

pages 98 to 99

Read more on

page 97

Board responsibilities and

procedures

The Directors consider it essential

that the Company should be both

led and controlled by an effective

Board. The Board focuses upon the

Company’s long-term objectives,

strategic and policy issues. It formally

and transparently considers the

management of key risks facing the

Group, as well as determining the

nature and extent of significant risks

it will take in achieving its strategic

objectives. It maintains and reviews

annually the effectiveness of the

Company’s risk management and

internal control systems. The Board

is responsible for acquisitions and

divestments, major capital expenditure

projects and considering the

Company’s budgets and dividend

policy. The Board also determines key

appointments. The Board receives

regular updates on shareholders’ views.

The Board has an established

calendar of business which covers the

financial calendar, strategic planning,

annual budgets and performance self-

assessments, as well as the conduct

of standing business. The calendar

forms the basis for effective integration

of business activities as between the

Board and its principal committees,

which individually consider their own

operating frameworks against the

Board’s business programme.

The Board delegates certain matters

to its principal committees who provide

reports and make recommendations to

the Board. The terms of reference for

each committee are available on the

Company’s website.

Board activities 2022

During 2022, the Board has overseen

the strategic development of the

Company including the acquisition

of William Hill. It has reviewed and

monitored the operational, trading

and financial performance of the

Company, including how it creates

value over the long term.

888 Holdings PLC Annual Report & Accounts 2022 93

GOVERNANCE

CORPORATE GOVERNANCE REPORT CONTINUED

BOARD LEADERSHIP

CONTINUED

Board activities 2022 continued

At every meeting the Board receives

and discusses updates from

the CEO, CFO, CSO and CRO on

progress against strategy, financial

performance, operational matters and

compliance and regulation. In 2022

the Board spent a significant amount

of time considering the acquisition

of William Hill and the integration

of the two businesses following the

acquisition.

Also, at each meeting the Board

undertook the following:

• scrutinised the operational

performance of the Group;

• reviewed the Company’s risk

management and compliance

processes;

• received updates on our People

and culture;

• monitored the Company’s safer

gambling activities;

• received updates on shareholder

views; and

• monitored regulatory developments.

In addition to the above, the Board

also considered the following key

activities.

January

• Deep dive review and approval of the Company’s updated “Made to Play” branding proposition

• Reviewed, considered and approved the equity raise for the acquisition of William Hill

• Received updates on UK Gambling Act Review and other regulatory developments

• Reviewed and considered further strategic development opportunities

March

• Approved the Prospectus issued in relation to the funding of the acquisition of William Hill

• Received the findings from the external board evaluation

• Reviewed, considered and approved the 888Africa joint venture

• Approved the FY21 annual report and financial statements

• Received an update on the US strategic partnership with ABG/Sports Illustrated

May

• Deep-dive review of the Section8 in-house games studio

• Update on the completion of the William Hill acquisition

• Reviewed plans for the integration of William Hill and 888

• Deep-dive review of Spectate – the 888 Sportsbook

• EGM to obtain shareholder approval of the William Hill acquisition

July

• Appointed of Andria Vidler, Andrea Gisle Joosen and Randy Freer as directors

• Visit to Romania office including site tour and overview of operations

• Review of the Compliance function including introduction to new Chief Risk Officer

• Appointed Anne de Kerckhove as the workforce designated non-executive

• Approval of sale of bingo business

• Reviewed integration and transformation plans for the combined business

September

• Appointed Ori Shaked as director

• Deep-dive review of consumer insight

• Updated on synergies, William Hill integration and organisational design

• Deep-dive review of the retail estate

November

• Review of marketing strategy and approach

• Reviewed and approved strategic projects and synergy optimisation

• Approved debt refinancing and hedging

• Reviewed and approved the FY23 budget

• Reviewed and approved plans and presentations for the Capital Markets Day

888 Holdings PLC Annual Report & Accounts 202294

GOVERNANCE

DIVISION OF

RESPONSIBILITIES

Chair, Chief Executive Officer and

SeniorIndependent Director

Notwithstanding the current position

described below, there is a clear

division of responsibilities between

the Chair and the CEO, which the

Board considers an important part

of its corporate governance. This is

documented and available on the

Group’s website and also include

the responsibilities of the Senior

Independent Director.

The role of the Senior Independent

Director is to provide a sounding board

for the Chair, to evaluate the Chair’s

performance and lead the Board’s

succession planning, and to serve as

an intermediary for the other Directors

wherenecessary.

Following Itai Pazner’s departure as

CEO in January 2023, Lord Mendelsohn

was appointed Executive Chair on an

interim basis whilst a replacement is

recruited. Whilst in this position, Lord

Mendelsohn will take on both roles

and will be supported by the Executive

Committee, Senior Independent

Director and the Board.

Reserved powers and delegation

A schedule of matters reserved to

the Board has been adopted and is

reviewed and updated regularly to

align it with operational needs and the

Board’s preference to monitor and,

where appropriate, approve matters

of substance to the Group as a whole.

The most recent review and update

was May 2021 and is available on the

Group’swebsite.

Independent Directors

More than half of the Board, excluding

the Chair, are Non-Executive Directors

determined by the Board to be

independent for the purposes of the

UK Corporate Governance Code.

The Board is confident that Mark

Summerfield, Limor Ganot, Anne

de Kerckhove, Andrea Gisle Joosen

and Andria Vidler are and remain

independent in character and

judgement and that there are no

relationships or circumstances which

are likely to affect, or could appear to

affect, their judgement.

COMPOSITION, SUCCESSION

AND EVALUATION

Board composition

During 2022, the composition of

the Board was enhanced with the

appointment of four additional non-

executive directors. It comprised the

following Non-Executive Directors:

Lord Mendelsohn (Chair), Anne de

Kerckhove (Senior Independent

Director), Mark Summerfield, Limor

Ganot, Andrea Gisle Joosen (from 5

July 2022), Andria Vidler (from 5July

2022), Randy Freer (from 5 July 2022

to 31August2022) and Ori Shaked

(from 13September2022), as well as

Executive Directors Itai Pazner (to

29January2023) as Chief Executive

Officer, and Yariv Dafna as Chief

Financial Officer.

The biographical details of all of the

Directors, setting out their relevant skills

and experience and their professional

commitments, are given on pages 90

and 91.

Board succession

Succession planning is delegated

to the Nominations Committee and

more information can be found on

page 98. Matters within the remit

of the Nominations Committee are

also on occasion considered by the

Board. Non-Executive Directors are

currently appointed to the Board for

an initial three-year term, extendable

by a further two additional three-

year terms. The terms and conditions

of appointment of Non-Executive

Directors and the service contracts

of Executive Directors are available

to shareholders for inspection at the

Company’s registered office during

normal business hours and at the AGM.

Board evaluation

The Board has established a formal

process for the annualevaluation of

its performance, and the performance

of its committees and individual

Directors. The evaluation process

covers a range of issues such as

Board processes, composition, roles

and responsibilities, agendas and

committee processes, as well as Board

dynamic andcommunication.

In accordance with the Code and the

FRC Guidance on Board Effectiveness,

we annually evaluate the performance

of the Board and its Committees to

assess their effectiveness. Led by the

Chair, the performance evaluation

considers the balance of skills,

experience and independence of

the Board. The annual performance

evaluation is externally facilitated

every three years. The January 2022

performance evaluation was externally

facilitated by Fidelio Partners and an

update on progress ofthe actions

arising from this review is set out below.

2022 evaluation recommendations Progress

Establish a clear understanding

ofthe work of the Board with

the business

Guidance provided to executive team on role of the board and reporting requirements.

Updated roles and responsibilities document produced. Terms of reference reviewed

annually.

Ensure Board Reporting

requirements are well

understood

Deep dive topics for year and key themes build into board calendar. Template for board

reporting andguidelines prepared and rolled out. Board and committee calendars agreed

for 2023 and 2024.

Build out employee

engagement plan

Workforce designated NED appointed and is scoping the engagement programme.

Employee engagement questionnaires provided to the Board.

Increase the size of the Board

paying close attention to

dynamic and effectiveness

Additional non-executive directors appointed with appropriate skills and experience in

gaming, remuneration and ESG. Induction programme developed and rolled out.

Develop Committee

effectiveness

Review of Committee make-up underway. Additional executive capability in place to support

the Remuneration Committee.

Keep under review stakeholder

engagement and D&I

Stakeholder map updated following acquisition. Regulatory and safer gambling framework

updated.

888 Holdings PLC Annual Report & Accounts 2022 95

GOVERNANCE

CORPORATE GOVERNANCE REPORT CONTINUED

COMPOSITION, SUCCESSION

AND EVALUATION CONTINUED

Board evaluation continued

In 2023 the Board undertook an

internal evaluation facilitated by the

Company Secretary. Following the

evaluation, the Board was satisfied

that each of the Non-Executive

Directors continues to be effective and

to demonstrate commitment to their

respective roles, and proposes them

for re-election or election at the 2023

Annual General Meeting.

Shareholder Engagement

The Company maintains an active

and regular dialogue with principal

and institutional shareholders and

sell-side analysts through a planned

programme of investor relations

and financial PR activity. The Board

keeps up to date with the views of

major shareholders through meetings

and discussions with shareholder

representatives and receives regular

feedback directly from investor

relations reports and broker updates at

each board meeting. The programme

of engagement includes formal

presentations of full year and interim

1. References in this Annual Report to Company Secretary refer to Elizabeth Bisby and for Gibraltar corporate purposes Straits Secretaries (Gibraltar) Limited.

results, analysts’ conference calls and

periodic roadshows and discussion

of the Company’s strategy and

governance. The Company Secretary

engages with proxy advisers in

advance of any shareholder meetings.

In addition, throughout the year, the

Chair of the Remuneration Committee

has consulted with major shareholders

on proposed Executive Director

remuneration. Details of engagement

with shareholders during 2022 are set

out onpage 96.

The Non-Executive Directors are

available to talk to shareholders if they

have any issues or concerns or if there

are any matters where contact with

the Chair, Chief Executive Officer and

Chief Financial Officer is inappropriate

or where such contact has failed to

resolve the issue.

Key Stakeholders

The Company’s key stakeholders are

its shareholders and debtholders,

customers, regulators, colleagues and

partners as well as the communities

in which it does business. The

Board takes care to engage with its

stakeholders, as detailed on pages

32 and 33 and within the ESG Report

on page 34 and the Remuneration

Report on page 108. All papers

presented at board meetings include

details of how the interests of the

Company’s key stakeholders are

considered in Board discussions and

decision-making as required by the

UK Corporate Governance Code and,

whilst as a Gibraltar company, the UK

Companies Act 2006 does not apply

to the Company, the matters set out in

section 172 are taken into account by

the Board in its decision-making to the

extent permitted under Gibraltar law.

EGM May 2022

In May 2022 an Extraordinary General

Meeting of the Company took place

at which the sole resolution proposed

was to approve the acquisition of

William Hill. In advance of this meeting

there was extensive engagement

with shareholders, particularly

regarding the means of funding this

transformational acquisition.

The acquisition was overwhelmingly

supported by the Company’s

shareholders with over 99% of total

votes cast infavour.

888 Holdings PLC Annual Report & Accounts 202296

GOVERNANCE

AGM 2022

All resolutions proposed at the AGM

in June 2022 were overwhelmingly

supported with at least 91% of total

votes cast in favour. The next AGM

willbe held in May 2023 and the

majority of Board members will

attendthe meeting and be available

toanswer questions.

Directors’ insurance cover

The Company has arranged and

maintains, at its expense, a directors’

and officers’ liability insurance policy

in respect of legal actions against its

Directors, as recommended by the

UK Corporate Governance Code. To

the extent permitted by Gibraltar law,

the Company may also indemnify the

Directors. Neither the insurance nor

the indemnity provides cover where

a Director has acted fraudulently or

dishonestly.

Development and advice

The Chair regularly agrees and

reviews each Director’s training and

development needs. Members of the

Board committees receive specific

updates on matters that are relevant

to their role. Members of the Executive

Committee with responsibility for

the Group’s business make periodic

presentations at Board meetings about

their functions, performance, markets

and strategy.

Information and support

All Directors have access to the

advice and services of the Company

Secretary

and the Company’s

nominated advisers, who are

responsible for ensuring that Board

procedures are followed. Directors are

able to seek independent professional

advice, if required, at the Company’s

expense provided that they have first

notifiedthe Company of their intention

to doso.

Under the direction of the Chair, the

Company Secretary’s responsibilities

include ensuring information flows

within and between the Board, its

Committees and the executive team,

as well as facilitating induction,

evaluation and professional

development activities, and advising

the Board on corporate governance,

legal and procedural matters.

Conflicts of interest

Conflicts of interest of the Directors

are dealt with in accordance with

the procedures set out in the Articles

and are monitored by the Chair.

Specifically, a Director does not vote

on Board or Committee resolutions

in which they orpersons connected

with them have an interest (other than

by virtue of a shareholding in the

Company) which is to their knowledge

material, except in specific limited

circumstances. The Board is confident

that the appropriate checks and

balances are in place to identify and

minimise potential conflicts of interest.

Gaming Compliance Committee

In accordance with Nevada Gaming

Control Board requirements, the Board

has appointed a Gaming Compliance

Committee. Its current members are

Mark Summerfield and Yariv Dafna, in

addition to an external leading Nevada

lawyer, Michael Alonso, who chairs

theCommittee.

The Gaming Compliance Committee

is entrusted with making sure that the

Group’s licensed gaming activity is

carried out with honesty and integrity,

in accordance with high moral, legal

and ethical standards, and free from

criminal and corruptive elements. As

such, the Committee is responsible

and has the power to identify and

evaluate situations arising in the course

of the Company’s and its affiliates’

business that may adversely affect the

objectives of gaming control.

The Committee is not intended to

displace the Board or the Company’s

executive officers with decision-making

authority, but is intended to serve as

an advisory body to better ensure

achievement of the Company’s goals

of avoiding unsuitable situations and in

entering into relationships exclusively

with suitable persons.

The Committee’s work is being done

independently and impartially. To this

end, its members are appointed by

and report directly to the Board of

Directors.

Other Disclosures

The following matters can be found in this report on the following pages:

Applicable sub-paragraph within LR 9.8.4

Disclosure

provided

(1) Interest capitalised by the Group N/A

(2) Publication of unaudited financial information N/A

(3) Details of long-term incentive schemes only involving a Director N/A

(4) Waiver of emoluments by a Director N/A

(5) Waiver of future emoluments by a Director N/A

(6) Non pro-rata allotments for cash (issuer) N/A

(7) Non pro-rata allotments for cash by majorsubsidiaries N/A

(8) Parent participation in a placing by alistedsubsidiary N/A

(9) Contracts of significance N/A

(10) Provision of services by a controlling shareholder N/A

(11) Shareholder waivers of dividends N/A

(12) Shareholder waivers of future dividends N/A

(13) Agreements with controlling shareholders N/A

On behalf of the Board:

Lord Mendelsohn

Executive Chair

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 97

GOVERNANCE

Nominations Committee

NOMINATIONS COMMITTEE

Anne de Kerckhove

Chair of the Nominations Committee

KEY ACTIVITIES 2022

• Reviewing the composition of the

Board including assessing any

gaps in the balance of skills and

experience.

• Selection of additional non-executive

directors taking account of the

above composition review.

• Development of tailored induction

plan for new non-executive directors.

• Monitoring the board evaluation

process which is described

on page 95.

• Implementing the Board’s diversity

policy which is described on page

99 (including considering the

gender balance of senior executives

and their direct reports).

• Supporting the development of a

diverse pipeline of candidates for

senior management.

Meeting

attendance

Membership in 2022

Anne de Kerckhove

(Chair)

2/2

Mark Summerfield 2/2

DEAR SHAREHOLDER

On behalf of the Board, I am pleased

to present the Nominations Committee

Report for the year to 31 December

2022. The Committee has been busy

this year with the selection and

onboarding of 3 new Non-Executive

Directors who bring additional skills

and experience to enhance the

Board’s strategic approach and

decision-making. The Committee has

also reviewed the changes to the

Executive Committee following the

acquisition of William Hill and their

direct reports.

The Nominations Committee, as

a sub-committee of the Board of

Directors, is responsible for monitoring

the composition and diversity of the

Board, overseeing the process of

selecting and nominating directors,

ensuring they receive an appropriate

induction and determining succession

plans for the Chair, CEO and other key

roles. The Nominations Committee’s

terms of reference are available on the

Company’s website.

In 2022 the Nominations Committee

was comprised of Independent Non-

Executive Directors Anne de Kerckhove

(Chair) and Mark Summerfield.

Succession Planning

The Committee regularly reviews

succession plans for the Board,

including the structure, composition

and skills required to support the

Group’s strategy. The Committee also

considers succession planning for

the Executive Committee and other

key roles within the senior leadership

team, as well as initiatives underway

todevelop talent internally.

At both Board and Executive level,

2022 was a year of significant change

with the strengthening of the Board

through the appointment of 3 additional

non-executives and the establishment

of a group Executive Committee made

up of senior leaders from both 888 and

William Hill, together with new recruits.

The establishment of the Executive

Committee was a key part of the

integration process as outlined in the

People Section of our Sustainability

Report on page 40 and provides strong

leadership across the business.

Following the announcement in

January 2023 that Itai Pazner

was leaving the business, he was

immediately succeeded by Lord

Mendelsohn as Executive Chair to

ensure continuity of leadership. The

Nominations Committee has taken the

lead in the search for a new CEO with

a focus on the skills and experience

required to lead the combined group.

The Committee is also managing the

recruitment of a new CFO to replace

Yariv Dafna when he steps down at the

end of 2023.

Appointment of new

non-executive directors

Following a review by the Committee

in 2021, it was agreed to search for

two additional directors based on

an agreed skills matrix. The Board

appointed the search firms Russell

Reynolds Associates and Odgers

Berndtson to assist the Nominations

Committee’s work. Both firms are

independent and have no connection

with the Company.

Due to the exceptional candidates,

Randy Freer, Andrea Gisle Joosen

andAndria Vidler were appointed on

5July 2022. Due to other commitments,

Randy Freer stepped down on

31August 2022. In addition, Ori Shaked

was appointed on 13 September 2022

Group’s largest shareholder exercising

its right to appoint a non-executive

director. All the new non-executive

directors completed a tailored

induction process facilitated by the

Company Secretary with oversight

from the Chair.

888 Holdings PLC Annual Report & Accounts 202298

GOVERNANCE

New director induction programme:

• each new non-exec was assigned

with a mentor from the current

Board as a point of contact and

sounding board;

• introduction to the Executive Team

with deep dive sessions on their

key areas including operations,

retail estate, strategic overview,

corporate culture;

• briefing session on the financial

structure of the organisation,

key financial metrics, principal

risks and the Company’s internal

controlframework;

• training provided on corporate

governance including PLC

requirements, directors’ duties, share

dealing, inside information, Listing

Rules and Market AbuseRegulations;

• product test accounts

wereprovided;

• briefing provided on regulatory

compliance and licencing in various

jurisdictions including licencing

obligations of directors;

• introductions to the Company’s

external advisers;

• briefing notes on investor

relations, market perceptions and

key stakeholder engagement

was provided;

• provided with key corporate

documents including the Articles

of Association, previous board

papers and minutes, the Schedule

of Matters Reserved for the

Board and details of where other

resources could be attained as

necessary; and

• provided with details of the Directors

and Officers Insurance.

Board diversity policy

The Nominations Committee is also

responsible for pursuing diversity within

the scope of its mandate, including

setting measurable objectives and

monitoring progress on achieving such

objectives. The Group has adopted

a Board Diversity Policy which takes

account of the requirements of the

Code, the Parker Review on ethnicity

and the Hampton Alexander Review

on gender diversity and is available

on our website. We aim to have a

Board that is well balanced and has

the appropriate skills, knowledge,

experience and diversity for the needs

of the business without compromising

on the quality or merit of candidates

including their aptitude and ability. In

considering new Board appointments,

the Committee considers diversity in

the broadest sense including diversity

of thought, age, gender, nationality,

independence, educational and

professional background, social and

ethnic background, business and

geographic experience in order to

create an appropriate balance.

The Board is pleased to confirm

that it has exceeded the Hampton-

Alexander Review target of 33% female

representation on the Board. Details of

the Company’s diversity position and

involvement of women in management

of the Group are set out in the

Sustainability section of the Strategic

Report on pages 34 to 45.

The geographic diversity of the Board

is representative of the operational

centres of the Group and includes

directors with British, Israeli and

European backgrounds. However, the

Board is also cognisant of the Parker

Review recommendations regarding

ethnic diversity and has at least

one director from an ethnic minority

background on the Board. It will also

take these considerations into account

in our future appointment as it wants to

continue to improve diversity on both

the Board and in the senior leadership

of the Group. Further information on

the Group’s diversity objectives are

contained in the Sustainability section

onpage 42.

Commitment

The terms of appointment for each

Non-Executive Director, including

expected time commitment are

available for inspection at the

Company’s registered office during

normal business hours and at the AGM.

Non-Executive Directors are required to

allocate sufficient time to perform all

applicable roles and to both disclose

any external appointments and consult

with the Company prior to accepting

any new major external appointments.

It is the Committee’s view that all

Directors have allocated sufficient

time to fulfil their commitment and

to meet their Board obligations

andresponsibilities.

Re-election and appointment

of Directors

The effectiveness and commitment of

each of the Non-Executive Directors is

reviewed by the Committee annually.

The Committee has satisfied itself

as to the individual skills, relevant

experience, contributions and time

commitment of all the Non-Executive

Directors, taking into account their

other offices and interests held. The

Board is recommending the election or

re-election to office of all Directors at

the 2023 AGM.

Anne de Kerckhove

Chair of the Nominations Committee

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 99

GOVERNANCE

ESG COMMITTEE

ESG Committee

Andria Vidler

Chair of the ESG Committee

KEY ACTIVITIES IN2022

• Review and approval of “Made for

the Future” ESG framework.

• Reviewed plans for implementation

of the carbon reduction plan.

• Received updates on the progress

on KPIs including on safer gambling,

people and the environment.

• Reviewed scores by rating agencies

and plans for improvements.

• Reviewed and approved evolved

ESG framework for the combined

group – “Players, People, Planet” see

page 35 for more details.

• Approved new ESG governance

structure and terms of reference for

the ESG & Sustainability Committee.

• Reviewed and considered the

climate related scenario analysis

report see page 68 for the

TCFD Report.

Meeting

attendance

Membership in 2022

Lord Mendelsohn (Chair) 3/3

Anne de Kerckhove 3/3

Mark Summerfield 3/3

DEAR SHAREHOLDER

On behalf of the Board, I am pleased

to present the ESG Committee Report

for the year to 31 December 2022.

During this period the Committee was

chaired by Lord Mendelsohn, who

stepped down upon his appointment

as Executive Chair in January 2023. I

would like to thank him for his service

and for guiding the huge amount of

work done by the 888 and William

Hill teams to align our ESG strategies

and processes and to ensure that

the combined group has the right

frameworks in place to support

sustainable growth.

Membership

The ESG Committee is composed of

three independent non-executives,

with other board members including

the Executive Chair and CFO are

invited to attend the Committee

meetings. The Chief Strategy Officer

and Chief Risk Officer also attend the

meetings and provide operational

updates to the Committee. The Group

has also recently appointed an ESG

and Sustainability Director who has

executive responsibility for the Group’s

ESG strategy.

The Committee’s terms of reference are

available on the Group’s website.

The Committee is responsible for

reviewing the Group’s ESG strategy

and setting relevant KPIs, developing

and reviewing relevant policies and

practices and providing oversight of

the implementation of these plans.

In 2022, the CEO was the executive

responsible for monitoring ESG activity

and progress within the Group, with

theExecutive Chair now taking over

this responsibility.

Following the acquisition of William

Hill an updated ESG framework was

developed for the Group. Further

details of which are contained in the

Sustainability on pages 34 to 45.

Safer Gambling

Safer gambling continues to be a

key focus for the Committee and

Player Safety is a core pillar of our

ESG framework. The Committee

received regular updates on safer

gambling and related matters and the

significant changes and improvements

implemented throughout 2022 to

encourage safer gambling with new

tools and technology.

Workforce Engagement

In 2022 the Committee reviewed

methods of engagement and Anne

de Kerckhove was appointed as the

Non-Executive Director designated

as the workforce engagement

representative. The acquisition of

William Hill has significantly altered

the location, demographic and

number of colleagues in the Group

from last year. With the combination

of two corporate cultures, it has never

been more important to ensure that

the Board listen to and understand

the views, interests and concerns

of the workforce and take these

into consideration prior to making

decisions. There has been increased

communication with colleagues to

keep them updated on business

changes and regular anonymous NPS

surveys to allow ongoing feedback

and temperature checks on employee

sentiment. The results of which are

shared with the Committee and Board.

Further details are set out on pages 40

and 41.

888 Holdings PLC Annual Report & Accounts 2022100

GOVERNANCE

ESG: At the heart

ofdecisionmaking

Q/ Having recently taken over as Chair of the ESG

Committee, what will your focus be over the next 12 months?

A/ Following the acquisition of William Hill in 2022 we have

evolved our ESG framework taking account of the new

combined business. That framework is called Player,

People & Planet and through it we have bigger, bolder

ambitions and my focus will be on ensuring that we have

the strategy and structure in place to achieve those

objectives whilst challenging the executive team to

deliver on their plans. The focus for the next 12 months

will be developing ESG KPIs for the combined group and

implementing the strategies required to deliver on them.

Player protection needs to be at the forefront of our

thinking and we need to ensure we are doing out utmost

to protect the small but important number of vulnerable

customers who are at risk of harm from gambling.

Q/How does ESG factor into the Board’s decision making?

A/We have developed an ESG governance process to

ensure that key decisions are brought to the ESG

Committee who have oversight our three framework

pillars. The Board has ultimate accountability and

understands that to build a sustainable business and

achieve our goals we must build long term, mutually

beneficial relationships with players, ensure our

colleagues thrive and ensure we protect the planet. The

impact of the Board’s decisions on these and our other

key stakeholders are considered in every item brought

to the Board. Safer gambling is a key pillar of our ESG

framework. We believe gambling to be entertainment,

a fun, leisure activity. All decisions made by the Board

are underpinned by our safer gambling approach. It is

integrated into our day to day operations through formal

controls such as risk assessments and also through

embedding a safer gambling focused culture in our

colleagues. We are establishing a range of goals related

to different areas against which the Board will receive

regular updates about progress. The executive team will

also have ESG targets included as part of their annual

bonus

Q/ What have you been most impressed with in relation to

ESG since you have joined the Board?

A/ In this challenging year with the combination of two

businesses, I have been impressed with how colleagues

across the group have worked together to understand

each other’s operations and develop our new ESG

framework. From a people perspective, the engagement

of colleagues in our integration and plans for the future

has been positive to see. In relation to player safety, I’ve

been struck by the passion with which colleagues care

about customer protection. From a product perspective

we have some good features to build on; we launched an

intuitive Profit & Loss product feature to the William Hill

app and enhanced the control centre product on 888.

Finally, I joined colleagues from across the business for

two climate related scenario analysis workshops and I

was impressed by the outputs which will build into our

future risk management strategy.

Q&A

Climate change and

theenvironment

The Committee recognises the

importance of minimising the

business’ environmental footprint. In

comparison to other sectors the 888

group’s impact on the environment

is relatively low as our product is

largely digital. 888 achieved a B- CDP

rating, and retaining membership of

the FTSE4GOOD index. William Hill

also made significant progress in

this area prior to the completion of

the acquisition including becoming

certified as carbon neutral this year

across its Scope 1 and Scope 2

emissions – a fantastic achievement

considering the size of our large retail

estate. Our carbon reduction plan has

been updated for the combined group

and scenario analysis conducted by

a cross functional team together with

Board representation was completed

in 2022. Whilewe still have work to

do, good progress has been made to

develop additional risk planning and

incorporate these into group strategy

and long-term plans. Further details

are included in the Sustainability report

on pages 34 to 45.

Andria Vidler

Chair of the ESG Committee

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 101

GOVERNANCE

AUDIT COMMITTEE

Audit Committee

Mark Summerfield

Chair of the Audit Committee

KEY ACTIVITIES 2022

• The Audit Committee has continued

to carry out a key role within the

Group’s governance framework,

supporting the Board in monitoring

and reviewing the systems for risk

management, internal control and

financial reporting.

• Reviewed the updated risk register

and framework following the

acquisition of William Hill.

• Approved the internal audit plan for

the year and received the internal

audit reports.

• Reviewed and recommended to

the Board for approval the FY2021

annual report and accounts and

FY2022 half year results.

• Received reports from the external

auditors on key audit findings.

• Reviewed and approved updates to

policies including the Whistleblowing

Policy, Anti-Bribery & Corruption

Policy and Business Continuity Plan.

• Oversaw the response to the UK

Gambling Commission compliance

assessments and remedial actions.

Meetings

attended

Member of Committee

Mark Summerfield 5

Limor Ganot 5

Anne de Kerckhove 4

DEAR SHAREHOLDERS

On behalf of the Board, I am pleased to

present the Audit Committee report for

the financial year-ended 31 December

2022. This has been a transformational

year for the Group, with the acquisition

of the William Hill business and the

changing shape of the Group’s financial

statements. The Committee’s primary

functions were unchanged this year

and included assessing the integrity

ofthe Company’s financial statements,

maintaining an appropriate relationship

with and reviewing the independence

and effectiveness of the Company’s

external auditor, and reviewing the

Company’s system of internal controls

and risk management. I would once

again like to thank my colleagues, Anne

de Kerckhove and Limor Ganot for their

support during another busy year!

In this letter I explain to shareholders

the responsibilities of the Committee,

highlighting those of particular importance

this year. The pages following contain

more detail on the matters considered.

During the year, the Audit Committee has

continued to carry out a key role within

the Group’s governance framework,

supporting the Board in monitoring

and reviewing the systems for risk

management, internal control and

financial reporting.

At the request of the Board, the

Committee reviewed this Annual Report

and advised it considers sufficient

information has been provided to

give shareholders a fair, balanced

and understandable account of the

business and allow them to assess its

position and performance, business

model and strategy. It also assessed

the Group’s viability, in line with the

Code requirements, prior to reporting

to the Board for approval. Further,

the Committee ensured that the

financial performance aspects of all

communications with shareholders

were carefully considered.

While risk management remains a

Board responsibility, the Committee

has worked with the Board and

Group management to ensure that

significant risks are considered on an

ongoing basis and that appropriate

responsibilities and accountabilities for

the related controls have been set. An

associated Committee responsibility

is to review the scope, nature and

effectiveness of the work of the

internal audit team, as well as ensuring

that the business responds to the

recommendations made.

Internal audit work was conducted

by Deloitte across the 888 business

and by the William Hill internal audit

team, supported by Grant Thornton,

for the William Hill business. The scope

of their plans were agreed with both

management and the Committee to

ensure they help the Board consider

the effectiveness of controls over

certain of the significant risks disclosed

in these accounts. Going forward the

internal audit work and plan will be

managed by the Group’s Internal Audit

team, which will agree the plan with the

committee. The plan will be delivered

with the support of the Deloitte internal

audit team.

The Committee monitors and reviews

the effectiveness and key aspects of

the external audit process, including the

annual audit plan and audit findings,

as well as the auditors’ independence

and objectivity. It also recommends

the audit fee to the Board and sets

the Company’s policy on the provision

of non-audit services by the external

auditor. EY UK is the auditor for the

purposes of the Company preparing

financial statements as required

pursuant to the UK Listing Rules and

the Disclosure and Transparency Rules.

EY Gibraltar is the Company’s statutory

auditor including for the purposes of

issuing an audit report pursuant to the

Gibraltar Companies Act 2014.

Further information on the Committee’s

responsibilities and the way they were

discharged are available on 888’s

corporate website: corporate.888.com.

In light of the migration of tax

residence of 888 Holdings plc to the UK

in January 2022, the Committee’s terms

of reference were amended to allow for

meetings of the Committee also to be

held in the UK.

We seek to respond to shareholders’

expectations in our reporting and

would welcome feedback. I am

available to speak with shareholders

at any time and shall also be available

at the Annual General Meeting in May

2023 to answer any questions.

Sincerely,

Mark Summerfield

Chair of the Audit Committee

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022102

GOVERNANCE

HIGHLIGHTS OF THE COMMITTEE’S WORK DURING YEAR WERE CONSIDERATIONS OF:

Topic Challenges Raised

The impact of changes to the

complex legal and regulatory

environment in which the Group

operates on its business, sector

and market, together with the

Group’s ongoing engagement with

regulatory bodies.

The Committee examined management’s assessment of legal and regulatory risks

in key markets, focusing on any changes in the environment and communication

with regulators, together with the appropriateness of the Group’s response. During

the year there has been considerable engagement with the regulators in the UK

and Gibraltar. While the committee has worked closely with the Group’s new Chief

Risk Officer on the approach to the matters raised, the Group’s response to the

regulators has been primarily handled at Board level.

The assessment of the risks facing

the business.

The Committee reviewed the risk register and risk appetite statement, updated to

reflect the enlarged Group after the acquisition of William Hill to ensure that it is

an accurate and relevant reflection of the Board’s approach to risk management.

Moving forward, the committee is working with the Chief Risk Officer to embed

enhanced risk management within the group. It is anticipated that once the new

framework is complete, the Committee will become the Audit and Risk Committee.

Integration and exceptional items The Committee reviewed the integration plans; ensuring the structure and

governance of the programme was appropriate and that controls continue to be

maintained throughout the integration programme.

The Committee reviewed the treatment of exceptional items, in particular those

associated with the integration programme and agreed with management’s

presentation of costs as exceptional.

The viability statement and

goingconcern statement prepared

by management.

The Committee reviewed management’s analysis of the Company’s going concern

and viability statement, including updated forecasts, downside scenarios including

an assessment of mitigations available to the Group and a reverse stress test and

advised the Board accordingly. The Board has concluded that the Company has

adequate resources to continue in operational existence for the foreseeable future.

The Group’s exposure to corporation

tax, gaming duties, VAT and similar

taxes

The acquisition of William Hill and the planned integration of the two businesses

allowed the opportunity for the Committee to review the tax arrangements in

placewithin both business and approve an appropriate tax structure for the Group

presented by management. A new UK Tax Strategy has been agreed and published

on our website and the integration has been planned with tax considerations a

keyelement.

Valuation of assets and liabilities

acquired within William Hill business

The Committee reviewed the analysis of the valuation of the assets and liabilities

acquired within the William Hill business and the corresponding goodwill generated

from the acquisition. This included the split of goodwill between segments and

the valuation of specifically identified intangible assets on acquisition such as

brand and customer relationships. It concurred with management’s view on the

valuations and the corresponding goodwill value of £786m generated from the

acquisition representing a number of factors such as the future growth of the

William Hill business, potential to achieve buyer specific synergies and the value of

the workforce. The Committee also reviewed the impairment testing of the goodwill

acquired on the William Hill acquisition and concurred with management’s view

that there were no impairments of this goodwill.

The carrying value (including

goodwill) of the US business

The Committee carefully considered the prospects of the US business given market

developments and the changing economic environment. The latter has led to a

significant increase in discount rates compared to the prior period. As such, and

despite the opportunities provided by the regulation of certain US states, the

Committee concurred with management’s view that an impairment of the US B2C

business was required.

The Group’s anti-bribery,

anti-money laundering and

whistleblowing obligations.

The Committee reviewed the Company’s policies to ensure they remain relevant

to the Company’s business and the regulatory environment in which it operates. A

new whistleblowing policy, incorporating best practice across both businesses, has

been agreed and announced.

888 Holdings PLC Annual Report & Accounts 2022 103

GOVERNANCE

AUDIT COMMITTEE CONTINUED

HIGHLIGHTS OF THE

COMMITTEE’S WORK DURING

YEAR WERE CONSIDERATIONS

OF: CONTINUED

The Group’s corporate governance

arrangements, including the risk

statements andcorporate policies have

been reviewed and updated in 2022 as

a result of the acquisition of William Hill

and the accompanying financing.

COMMITTEE COMPOSITION

During 2022, the Committee comprised

three independent non-executive

directors, being Mark Summerfield,

Limor Ganot and Anne de Kerckhove.

Two members constitute a quorum. The

Committee requires the inclusion of at

least one financially qualified member

with recent and relevant financial

experience. The Committee Chair

fulfilled that requirement. The Committee

has competence relevant to the online

gaming sector and all members of the

Committee have an understanding of

financial reporting, the Group’s internal

control environment, relevant corporate

legislation, the functions of internal and

external audit and the regulatory and

compliance framework of the business.

Specifically, Mr. Summerfield was both

an auditor and worked within the sector,

Ms.deKerckhove has extensive strategy,

entrepreneurial and sector experience,

and Ms. Ganot is both a qualified CPA

and has extensive experience as a

venture capital fund manager.

In addition to scheduled meetings, the

Committee Chair met with the Chief

Financial Officer and the internal

and external auditors on several

occasions. Although not members of

the Committee, the Chair of the Board,

Chief Executive Officer and Chief

Financial Officer attend meetings,

together with representatives from the

internal and external auditors.

OUR WORK IN 2022

In planning its work, the Committee has

reference to the significant risks that

may have an impact on the financial

statements. During the year there were

no matters where there was significant

disagreement between management,

the external auditor and the

Committee, or unresolved issues that

required referring to the Board. The key

matters discussed by the Committee

during the year were as follows:

Legal and regulatory environment

The Group operates within an

increasingly regulated marketplace

and is challenged by regulatory

requirements across all areas of its

business. This creates risk for the

Group as non-compliance can lead

to financial penalties, reputational

damage and the loss of licences to

operate. As part of this process, the

Board and Audit Committee received

updates from management and

discussed follow-up actions in response

to regulatory matters relating to

customer activity in prior periods. The

Group manages its regulatory risk with

input from its legal advisers in order

to operate its business in compliance

with relevant regulatory requirements.

The Group works with its lawyers and

Chief Risk Officer to produce regular

updates so that the Board and

Audit Committee understand what is

happening in the regulatory landscape.

During 2022, the Board and Audit

Committee received regulatory

briefings from the Company’s

lawyers and reviewed updates on

the management of regulatory risk

from the Chief Risk Officer, as well as

reviewing the status of litigation and

regulatory reviews involving the Group

and the related accounting for the

Group’s obligations in the financial

statements. The Committee considered

the evolving risk environment and

approved the proposed alignment

of approaches between 888 and

William Hill as regards Austrian

player litigation. It has also approved

changes to compliance and quality

assurance controls in other markets

where the regulatory regime has

evolved. Please refer to note 22 of the

financial statements for further detail

on Austria player litigation specifically.

The Audit Committee also had a key

role during 2022 working with the

Board in overseeing the Company’s

response to the UK Gambling

Commission compliance assessments

and ensuring all remediation actions

were executed by management

in response to the Gambling

Commission’s findings. The Committee

was also involved in the engagement

with the UKGC regarding the license

review of William Hill, despite the fact

that it was related to activity before

the acquisition date.

Acquisition accounting

As set out on note 16, the acquired

assets and liabilities of William Hill

have been valued on acquisition with

the remaining value recognised as

goodwill. The Committee reviewed

the analysis of the valuation of the

assets and liabilities acquired within

the William Hill business and the

corresponding goodwill generated

from the acquisition. This included the

split of goodwill between segments and

the valuation of specifically identified

intangible assets on acquisition such

as brand and customer relationships. It

concurred with management’s view on

the valuations and the corresponding

goodwill value of £786m generated

from the acquisition representing a

number of factors such as the future

growth of the William Hill business,

potential to achieve buyer specific

synergies and the value of the

workforce.

Taxation

The Board oversees and sets the

Group’s tax strategy and evaluates

tax risk. In undertaking this task, the

Group’s internal tax team is supported

by external legal and tax advisers.

During the year, the Group’s Head of

Tax has kept the Board and Audit

Committee apprised of both existing

and emerging tax risks as well as an

assessment of the tax risks across the

enlarged Group, in particular as the

organisational design of the Group has

evolved.

In 2022, the Board and Audit Committee

discussed the Group’s tax related

matters including the Group’s tax and

intellectual property holding structure.

and the tax impact of organisational

and operational change across

the new combined business. The

Committee also received detailed

updates on the tax implications of

migrating the tax residency of 888

Holdings plc to the UK which was

effected in January 2022 and a report

from advisers on the indirect tax

issues relating to the Group’s Spanish

operations. The Committee noted

that the Group registered for taxes in

relevant jurisdictions in order to ensure

timely reporting and payment on

the correct basis, while reserving its

position concerning contesting possible

existence of a liability in appropriate

cases. For further information, see notes

9 and 26 to the financial statements.

Goodwill and impairment reviews

As set out in note 12 to the consolidated

financial statements, the Group

has significant goodwill and other

intangible assets identified on

acquisition relating to the acquisitions

of William Hill and the US B2C

businesses.

The Committee reviewed the cash

flow forecasts supporting the carrying

value of goodwill and other intangible

assets including the key assumptions

888 Holdings PLC Annual Report & Accounts 2022104

GOVERNANCE

and estimates as well as the impact

of the recent and potential regulatory

developments and the impact of

the external economic environment

on discount rates. This led to an

impairment required in relation to the

carrying value of the US B2C business

driven by the market developments

and developing strategy of the US

business as well as increasing discount

rates. There were no impairments

noted relating to the goodwill

recognised on acquisition of William Hill.

The Committee reviewed whether there

were other triggers for impairment

across the remainder of the Group

with an impairment noted surrounding

specific items of software acquired

with William Hill that is not required by

the Group going forward.

Revenue Recognition and

Development Costs Capitalisation

Revenue recognition and the

capitalisation of development costs

are areas of material risk in relation

to the preparation of the financial

statements. The Committee has

considered the Group’s accounting

policies in these areas, including

the respective policies of 888 and

William Hill and the alignment of these

policies and has concluded that the

Group’s recognition of income and

capitalisation of development costs is

appropriate.

IT systems

888’s IT systems are complex and

predominantly developed in-house

and the current framework is more

complex as the integration of IT

systems between 888 and William Hill

is still in progress. The success of the

business relies on the development

of IT platforms that are innovative

and appealing to customers. In

addition, the integrity and security

of the IT systems are vital from a

commercial standpoint as well as to

ensuring a robust control environment.

The 888 and William Hill businesses

currently operate on different ERP

finance systems. The Committee has

considered this within the context

of the preparation of the financial

statements and notes the transition

onto one ERP finance system as part of

the integration programme.

The Audit Committee oversaw internal

audit’s continuing review of the Group’s

cyber incident response capability and

as an outcome of this process the

Company obtained the ISO14001 in 2022.

Internal controls and risk

management

The Board has overall responsibility for

ensuring that the Group maintains a

sound system of internal control. There

are inherent limitations in any system

of internal control and no system can

provide absolute assurance against

material misstatements, loss or failure.

Equally, no system can guarantee

elimination of the risk of failure to meet

the objectives of the business. Against

this background, the Committee has

together with the Board developed

and maintained an approach to risk

management that incorporates risk

appetite and tolerance, the framework

within which risk is managed and

the responsibility and procedures

pertaining to application of the policy.

The Group is proactive in ensuring that

corporate and operational risks are

identified, assessed and managed

by identifying suitable controls. A

corporate risk register is maintained

which details

1. The risks and impact they may have;

2. Actions to mitigate risks;

3. Risk scores to highlight the

likelihood and implications

ofoccurrence;

4. The owners of risks; and

5. Target dates for actions to mitigate.

A description of the principal risks is

set out on pages 61 to 66.

The Board, supported by the Audit

Committee, has confirmed that it has

carried out a robust assessment of

theprincipal risks facing the Group,

including those which threaten its

business model, future performance,

solvency orliquidity.

In addition to the matters described

above, the work of the Committee

during the year included:

• Reviewing the draft interim and

annual reports and considering:

1. The accounting principles,

policies and practices adopted

and the adequacy of related

disclosures in the reports;

2. Application of IAS 36 and 38;

3. The significant accounting

issues, estimates and

judgements of management in

relation to financial reporting;

4. Whether any significant

adjustments were required

arising from the audit;

5. Compliance with statutory tax

obligations and the Company’s

tax policy;

6. Whether the information set

out in the Strategic Report was

balanced, comprehensive, clear

and concise and covered both

positive and negative aspects

of performance; and

7. Whether the use of “alternative

performance measures”

obscured IFRS measures.

• Meeting with internal and external

auditors, both with and in the

absence of the executive directors.

• Reporting to the Board on how it

has discharged its responsibilities.

• Making recommendations to the

Board in respect of its findings in

respect of all of the above matters.

• Review and approval of the external

audit fee.

The Board considers that the processes

undertaken by the Audit Committee

continue to be appropriately robust

and effective and in compliance with

the guidance issued by the FRC.

The Committee believes that

appropriate internal controls are

in place through the Group. As 888

and William Hill are integrated, the

organisational structure is being

brought together to ensure that

there are clear lines of responsibility

and bringing together the most

effective control processes across

both businesses. The Committee

also believes that the Company

complies with the FRC Guidance

on Risk Management, Internal

Control and Related Financial and

BusinessReporting.

GOING CONCERN AND

FINANCIAL VIABILITY

During 2022, the Committee reviewed

the appropriateness of adopting the

going concern basis of accounting

in preparing the full year financial

statements, and assessed whether the

business was viable in accordance with

the Code. As part of the assessment,

the Committee closely scrutinised the

Group’s major risks, both individually

and how they might occur in

combination, their financial impact,

how they are managed, the availability

of finance and the appropriate

period for assessment. This included

detailed modelling of the Company’s

assumptions underlying its forecast.

888 Holdings PLC Annual Report & Accounts 2022 105

GOVERNANCE

AUDIT COMMITTEE CONTINUED

GOING CONCERN AND

FINANCIAL VIABILITY

CONTINUED

In its going concern assessment, the

Directors have considered a range of

plausible downside scenarios as well

as considering separate reverse stress

tests. It has also considered the further

actions available to the Group to

conserve cash to mitigate the impact

of any severe but plausible downside

scenarios occurring.

The Committee challenged the

identification of these scenarios linked

to significant risks and the assumptions

comprising the viability analysis carried

out by management, and deemed

appropriate the going concern basis

of accounting and disclosure around

both going concern and the viability

statement. The Group’s viability

statement is on page 67.

FAIR, BALANCED

ANDUNDERSTANDABLE

The Committee considered whether the

2022 Annual Report is fair, balanced

and understandable, and whether it

provides the necessary information

to shareholders to assess the Group’s

performance, business model and

strategy. The Committee considered

management’s assessment of items

included in the financial statements

and the prominence given to them

and ensured it followed a framework

which supports the inclusion of key

messaging, market and segment

reviews, performance overviews,

principal risks and other governance

disclosures. The Committee also

ensured that sufficient forward-looking

information is also provided and a

balance is sought between describing

potential challenges and opportunities.

The Committee and subsequently

the Board were satisfied that, taken

as a whole, the 2022 Annual Report

and Accounts are fair, balanced

and understandable. The Committee

ensured the steps undertaken by

management were performed

such that the Annual Report and

Accounts remains fair, balanced and

understandable including the following

processes:

• The Group’s Finance Department,

Director of Investor Relations,

Company Secretary and legal

advisers initiate the process in

coordination with the Group’s

publicrelations advisers, focusing

on main themes and financial

trendswhich primarily inform

the Executive Chair’s Statement,

Strategic Report and Business

& Financial Review. The draft

statements are then reviewed and

comments provided by Group

senior management. Input was

also provided by the Company’s

Risk team, Reward team and

Remuneration and ESG consultants.

• The Group’s Company Secretary

leads the process of compiling

the relevant legal and corporate

governance sections, and obtains

input from Group legal advisers,

senior management and Board

members as required.

• The Group’s Risk team draft the

regulatory review and risk report

supported by legal advice received

by the Group and developments in

relevant risks and risk discussions

held by the Board.

• The Group’s remuneration consultant

drafts the Directors Remuneration

Report (including the Remuneration

Policy) which is then reviewed by

the Group’s Reward team and the

Remuneration Committee.

• The Group’s Finance Department

prepares the accounts. These

are audited by the Company’s

auditors, who check amongst

other matters that the Group

has given appropriate attention

to any relevant changes in

accounting policies.

• The Group’s CFO, Group Financial

Controller and Director of Investor

Relations review the entire Annual

Report & Accounts and lead an

iterative process pursuant to

which the relevant internal and

external stakeholders review and

provide comments.

• The draft Annual Report & Accounts

is presented to the Committee,

which is also in possession

of a detailed report from the

external auditor, where a detailed

discussion is held regarding key

disclosures and the Committee’s

recommendations are provided to

the Board.

• The Annual Report & Accounts is

finally reviewed by the full Board

for approval.

• Adequate time is given to each of

the above steps to allow for full and

meaningful review.

PERFORMANCE OF

AUDITCOMMITTEE

The Audit Committee’s performance

was evaluated as part of the external

Board evaluation in 2022 as detailed

on page 106. The overall conclusion

of the review was that the Committee

remains effective in discharging its

functions and reporting to the Board.

INTERNAL AUDITORS

The Internal Audit team provides

independent assurance over the

Group’s risk management and internal

control processes. The 888 internal

audit function has historically been

outsourced to Deloitte Israel, including

in the period prior to the acquisition

of William Hill and therefore Deloitte

Israel were responsible for providing

the Internal Audit plan. The Audit

Committee reviewed and monitored

the internal audit plan in accordance

with the principal risks to 888’s business

as set out in the Risk Register.

Since the acquisition of William Hill, the

incumbent William Hill Head of Internal

Audit took responsibility as Head of

Internal Audit across the 888 Group

and has worked with Deloitte Israel

across the remainder of the year.

The Committee has reviewed reports

from both the in-house Internal

Audit team and Deloitte Israel in

relation to all internal audit work

carried out during the year and

monitored responses and follow ups

by management to internal audit

findings. In 2022, the Committee have

received reports on Customer Due

Diligence procedures, GAMSTOP –

General IT Controls, Whistleblowing

Policy, Accounts Payable processes;

Payroll processes; Anti-bribery and

corruption; procurement; integration;

third party management and software

management as well as presenting

the 2023 internal audit plan. The

Committee also received reports

from FTI consulting, a UK compliance

specialist, who were engaged to review

888 UK compliance controls and the

Committee monitored responses and

follow ups by management to their

findings.

Certain matters were identified which

required modifications to procedures

and improved controls, which either

have been or are being implemented

by management.

EXTERNAL AUDITORS

EY has been the Company’s external

auditor since their appointment in

2014. The partners responsible for the

external audit are Angelique Linares,

a partner in EY’s Gibraltar office, and

Marcus Butler, a partner in EY’s London

office. Angelique and Marcus have

been responsible for 888’s audit since

2018 and 2021 respectively.

888 Holdings PLC Annual Report & Accounts 2022106

GOVERNANCE

The Committee has reviewed the

performance of EY in relation to the

888 audit, a process which involved all

Board members and senior members

of 888’s finance function. Specific

consideration was given to:

• Ensuring that safeguards put

in place by the auditor against

independence threats are sufficient

and comprehensive;

• Ensuring that the quality and

transparency of communications

from the external auditors are

timely, clear, concise and relevant

and that any suggestions for

improvements or changes are

constructive;

• Determining whether they had

exercised professional scepticism,

with regards to the reliability

of evidence provided, the

appropriateness and accuracy

of management responses to

questions, considering potential

fraud and the need for additional

procedures and the willingness

of the auditor to challenge

management assumptions;

• Considering if the quality of the

audit engagement team is sufficient

and appropriate – including the

continuity of appropriate industry,

sector and technical expertise.

Feedback is provided to the external

auditor by the Audit Committee

through one-to-one discussions

between the Chair of the Audit Committee

and the audit firm partner. Each year,

the results of the review of the EY audit

practice by the regulator is discussed

with the audit team to determine the

relevance to the 888 audit and how the

team needs to respond.

The conclusions reached by the

Committee were that EY had

performed the external audit in

a professional manner, and it

was therefore the Committee’s

recommendation that the

reappointment of EY be proposed to

shareholders at the Annual General

Meeting to be held in May 2023.

The Committee reviewed the

reports prepared by the external

auditors on key audit findings and

any significant deficiencies in the

financial control environment, as

well as the recommendations made

by EY to improve processes and

controls together with management’s

responses to those recommendations.

EY highlighted a small number of

specific internal control weaknesses

and management has committed

to making appropriate changes to

controls in areas highlighted by EY.

AUDIT TENDER

The Company is proposing to

undertake an audit tender exercise, the

result of which will not be known until

after the 2023 AGM has been held. In

the interim period, EY has indicated its

willingness to continue to act as the

Company’s auditor until the outcome

of the tender has been concluded. An

update on the outcome of the tender

exercise will be communicated once it

has been completed.

The audit contract was last tendered

for the year ended 31 December

2014 and no contractual obligations

existed that acted to restrict the

Audit Committee’s choice of external

auditors. Under the EU Audit

Regulation and the Competition

andMarkets Authority “The Statutory

Audit Services for Large Companies

Market Investigation (Mandatory Use

of Competitive Tender Processes and

Audit Committee Responsibilities)”

Order 2014, the Company is required

to run a competitive tender process

in respect of auditor appointment no

later than 31 December 2023 year

end. The Board is planning to perform

an audit tender process starting in

Q2 2023 and concluding in Q3 2023.

The Committee notes and confirms

compliance with the other provisions

of the Competition &Markets Authority

Order 2014 in respect of statutory audit

services forlarge companies.

AUDIT AND NON-AUDIT WORK

The Audit Committee remains mindful

of the attitude investors have to the

auditors performing non-audit services.

The Committee has clear policies

relating to the auditors undertaking

non-audit work and monitors the

appointment of the auditors for any

non-audit work involving fees above

£25k, with a view to ensuring that

non-audit work does not compromise

the auditors’ objectiveness and

independence. The Committee is

committed to ensuring that fees for

non-audit services performed by

the auditors will not exceed 70% of

aggregate audit fees measured over a

three year period.

Fees payable to the auditor for audit

and non-audit services are set out in

note 5 to the Financial Statements on

page 165..

This year, in undertaking the circular

and prospectus for the proposed

acquisition of William Hill and associated

capital raise and debt issuances in

2022, the Company required the work

of a reporting accountant, including

an independent report on the working

capital statement.

While the Audit Committee believed

that EY, as our auditor, was best

placed to perform this service,

it was conscious of not wanting

to compromise EY’s auditor

independence and therefore engaged

with both EY and the FRC on this

matter. Having obtained the FRC’s

clearance for EY to perform this work,

the Audit Committee approved EY

being appointed. Given the timing of

the work, clearance was obtained to

exceed the 70% non-audit fee cap for

both the year ending 31December

2021 and the year ending 31 December

2022.

As a result of EY’s work on the circular

and prospectus for the acquisition of

William Hill and associated capital

raise and debt issuances, total fees for

non-audit services represented 34%

(2021: 296%) of the total audit fees.

Factors considered by the Audit

Committee in being satisfied as to

EY’s continued auditor independence

in relation to undertaking this work

included:

• The nature of the work and the

relevant independence threats

and safeguards put in place by

EY. For example, the working

capital exercise was carried out

by a separate team and led by a

separate engagement partner. In

addition, there was no self-review

threat as EY did not prepare any

information used for financial

reporting;

• The reporting accountants work

provided is permissible under the

FRC Ethical Standard; and

• EY have not performed perform

any other significant non-audit

services for the year ending 31

December 2021 or the year ending

31 December 2022.

In conclusion, the Committee remains:

• Satisfied with the effectiveness

of the external audit and the

interaction between the auditors

and the Committee;

• Satisfied as to the auditor’s

qualifications, expertise and

resources; and

• Confident that EY’s objectivity and

independence are not in any way

impaired by the provision of non-

audit services.

888 Holdings PLC Annual Report & Accounts 2022 107

GOVERNANCE

Remuneration Committee

REMUNERATION COMMITTEE

DEAR SHAREHOLDER,

I am pleased to present the Directors’

Remuneration Report for the year ended

31 December 2022. This report sets out:

• my statement on the activities and

decisions of the Remuneration

Committee during the year;

• the annual report on remuneration,

which explains how the current

directors’ remuneration policy was

implemented in 2022 and how

the policy will be implemented

in 2023; and

• the directors’ remuneration policy

which was approved in May 2021.

As a company incorporated in

Gibraltar, 888 Holdings plc is not

bound by UK law or regulation in the

area of Directors’ remuneration to

the same extent that it applies to UK

incorporated companies. However, by

virtue of 888’s Premium Listing on the

London Stock Exchange and reflecting

the Committee’s approach to good

governance and investor expectation,

we have prepared this report in line

with the requirements of the Directors’

Remuneration Reporting regulations.

OVERVIEW OF 2022

ANDREVIEW OF POLICY

2022 has been a transformational year

for 888 with the acquisition of the non-

US business of William Hill in July. The

acquisition has resulted in a significant

increase in the business’ scale and

complexity, diversifying our offering

and providing a powerful platform for

sustained growth over the medium and

long-term. 2022 has also been a difficult

year with our operating environment

becoming more challenging and

moderation in market growth rates.

Furthermore, in early 2023 we also

announced the departure of our CEO

and CFO with our CFO remaining with

the business until the end of the 2023.

Looking forward, 2023 will be another

year of change for the business as

we continue to progress with the

integration of the two businesses to

create an improved operating model

delivering efficiencies, higher profit

margins and shareholder return.

In my Annual Statement last year Isaid

that the Committee would review the

Executive Director’s Remuneration

Policy and operation of policy to

ensure it continued to be appropriate

in light of our business combination.

The Committee carried out the review

during the year, noting that the Policy

is subject to its triennial vote at our

2024 AGM, and concluded that no

changes are required for 2023.

The only Policy matter that the Committee

committed to consider as part of the

Policy review is annual bonus deferral.

The Executive Directors are currently

required to defer bonus over 100%

of salary into shares that will vest in

three equal tranches over 1, 2 and 3

years and the Committee has noted

investor preference for a portion of any

bonus paid to be deferred. As such, the

Committee has determined that when

the Policy is renewed at the 2024 AGM

it will provide that at least one-third of

any bonus paid is deferred into shares

and will ensure that any bonus paid to

new Executive Directors for 2023 prior

to our Policy renewal will be voluntarily

deferred on the same basis.

The Committee will consider again

during the course of 2023 whether any

other changes to Policy are required

in advance of the 2024 triennial AGM

policy vote.

BOARD CHANGES

We announced on 30 January 2023

that our Chief Executive Officer,

MrPazner, stepped down from his role

with immediate effect and he left the

business on 3 March 2023. All unvested

deferred share bonus awards and

long-term incentive awards lapsed on

cessation. Salary and normal benefits

will be paid for the duration of the

notice period. Certain relocation

payments will also continue. There will

be a duty to mitigate all payments.

Anne de Kerckhove

Chair of the Remuneration

Committee

KEY ACTIVITIES 2022

• Review of the Executive Directors’

Remuneration Policy in light of the

acquisition of William Hill

• Review of performance targets for

in-flight LTIP awards in light of the

William Hill acquisition

• Review of long-term incentive

plan rules

• Determination of 2022

remuneration outcomes

• Review of application of

policy for 2023

• Investor consultation on Executive

remuneration matters for

2022 and 2023

• Determination of leaving

arrangements for the former CEO

• Determination of remuneration

arrangements for the CFO

Meetings

attended

Member of Committee

Anne de Kerckhove 4/4

Mark Summerfield 4/4

Limor Ganot 4/4

888 Holdings PLC Annual Report & Accounts 2022108

GOVERNANCE

Following the CEO’s departure, our

non-executive Chair Lord Mendelsohn

assumed the role of Executive Chair

on a full-time interim basis until a new

CEO is appointed. As Executive Chair,

Lord Mendelsohn will receive a fee

of £670,000 p.a. He will not receive

pension, annual bonus or long-term

incentives. His fee will revert to

£320,000 p.a. when his role transitions

back to non-executive Chair.

As announced on 13 January 2023, the

Board and Mr Dafna, Chief Financial

Officer, mutually agreed that he will

step down from the Board and as Chief

Financial Officer. Mr Dafna will continue

as Chief Financial Officer during

his notice period until a new CFO is

appointed. His remuneration for FY23 is

set out below in the section explaining

the operation of policy for FY23. He will

be treated as a good leaver in respect

of his unvested deferred bonus share

awards and LTIP awards. Unvested

deferred bonus shares will be retained

in full and vest on the usual vesting

date and LTIP awards will be subject to

time-prorating and performance, also

vesting at the usual time with the post-

vesting holding period still applicable.

The Board was pleased to announce

in 2022 the appointment of Andrea

Gisle Joosen and Andria Vidler in

July 2022 as Non-Executive Directors.

Randy Freer was also appointed as

a Non-Executive director but stood

down on 31 August 2022 as a result

of increased time commitments. In

addition, following the Group’s largest

shareholder, Sinitus Nominees Limited

in trust on behalf of Dalia Shaked,

exercising its right to appoint a

Non-Executive director, Ori Shaked

wasappointed as a Non-Executive

Director in September 2022. The

Non-Executive Directors receive fees

which are in line with the fees for other

Non-Executive Directors.

REVIEW OF INCENTIVE

TARGETS IN LIGHT OF

WILLIAM HILL ACQUISITION

The Committee has reviewed the

performance targets for 2021 and

2022 in-flight LTIP awards following the

business combination and considered

if any adjustments are appropriate

to take into account the expected

performance of the larger business.

No adjustments are required for the

TSR elements of in-flight awards, and

therefore the performance target

range will remain as median to median

+10% p.a.

For the 2021 award, the 2020 EPS

is rebased to 21.27 pence to reflect

the performance of the combined

business with the Committee agreeing

that no changes should be made

to the 3% to 9% CAGR target range.

Forthe EPS element of these awards

to vest an adjusted EPS of 23.24 pence

for threshold and 27.54 pence for

maximum vesting is required in FY23.

For the 2022 award, the 2021 EPS is

rebased to 19.85 pence to reflect the

performance of the combined business

with both threshold and maximum

targets increased to 26.25 pence to

29.13 pence being a range of 9.8%

CAGR at threshold to 13.6% CAGR at

maximum reflecting strong EPS growth

expectations for FY24 and taking into

account our commitment to deliver EPS

of at least 35 pence by 2025.

REMUNERATION OUTCOMES

FOR 2022

The annual bonus for 2022 was

based on 888 (excluding William Hill)

performance with 50% based on

adjusted EBITDA, 20% on revenue

excluding the US business and 30%

on the achievement of strategic

objectives. Adjusted EBITDA and

revenue were below threshold.

Performance against the strategic

objectives accounting for 30% of

the bonus was determined at 47.5%

of maximum and 14.25% of the total

bonus. However, given there is no

payment under either of the financial

elements, the underlying performance

of the business and the shareholder

experience, the Committee determined

that no bonus should be payable.

Full details of the targets and actual

performance are set out on page 119.

The LTIP awards granted in 2020

were based 50% on relative TSR

performance and 50% on adjusted

EPS performance measured over

three financial years to 31 December

2022. 888’s TSR was -37.4% over the

performance period resulting in no

vesting of that element. Given the

timing of the business combination

with only 6 months before the end of

the 3 year performance period (ending

31 December 2022), the Committee

determined that there should be no

changes to the targets for the 2020

LTIP with performance against targets

assessed on the 888 business alone.

Adjusted EPS growth over the

performance period, based on 888

only, was 15.3% CAGR which is above

the maximum target of 9% CAGR,

and therefore this element will vest in

full. The Committee has considered

carefully whether the level of vesting

is appropriate. The CEO’s 2020 LTIP

award has lapsed on his cessation of

employment. The CFO’s 2020 award

was pro-rated on grant to reflect his

appointment in October 2020 with

a delayed grant date in March 2021

at a grant share price of £3.49. The

Committee is comfortable that the

level of vesting is appropriate for the

CFO, taking into account performance

against the targets and adjusted EPS

achieved for the 888 business. The

Committee also noted the lapsing

of the TSR element of the award

reflecting the shareholder experience

and the overall vesting value of the

award of £16,318 as well as wider

remuneration decisions and outcomes,

including no bonus payment for 2022

and a scaled back LTIP award for

2023. The Committee is satisfied there

is no windfall gain to be considered

noting both the current share price,

the number of shares subject to the

award as a result of the pro-rating

and the share price of £3.49 on grant.

The CFO’s award will not vest until

March 2024 because of the delayed

grant providing ongoing alignment to

shareholder interests.

888 Holdings PLC Annual Report & Accounts 2022 109

GOVERNANCE

REMUNERATION COMMITTEE CONTINUED

APPLICATION OF POLICY

FOR2023

The salaries of our former CEO and

CFO were not increased for 2023. With

the departure of our CEO and our CFO

working his notice period, he will be

eligible for a bonus in 2023, based on

his normal annual bonus opportunity

of 150% of salary. The annual bonus

will be determined as to 60% on Group

operational targets equally weighted

between revenue, EBITDA, EBITDA

margin, regulatory compliance and

ESG scorecard (weighted 50% safer

gambling, 25% environmental impact,

25% employee engagement) and 40%

by specific integration objectives with

40% weighted to operational cashflow

and the remainder to critical business

integration priorities.

The measures for 2023 ensure a

continued focus on top and bottom

line noting the importance of cashflow,

servicing and reducing debt as well as

other continuing integration priorities.

The bonus measures also acknowledge

the importance and significant focus

required on compliance, regulation and

safer gambling as well as broaderESG

sustainability and employee engagement.

Investors will understand how critical

2023 is for the business to establish the

basis for future earnings growth and

to achieve our commitment to deliver

EPS of at least 35 pence by 2025. For

this reason the Committee has agreed

exceptionally to award a 2023 LTIP

to the CFO, which comprises 180,812

shares. The number of shares has

been calculated based on a pro-rated

award of 50% of salary, discounted

by 30% to reflect the significant fall in

share price since the awards granted

in 2022, and based on the share price

on 14 February of 67p. This results in

an LTIP award of 35% of salary. The

LTIP award will be subject 50% to

adjusted earnings per share growth

targets of 33.4 pence to 36.6 pence

which are aligned to our 2025 EPS

commitment and 50% on relative TSR.

The award will vest at the normal time

and be subject to a two-year post-

vesting holding period. The Committee

understands that it is unusual to grant

an LTIP award to an executive director

during their notice period. However,

noting the period of time it is expected

the CFO will be working with the business,

the criticality of performance for 2023

as the basis for growth to 2025 as

well as the departure of our CEO, the

Committee has determined that this is

appropriate in all the circumstances.

The Committee

retains the discretion to

scale back

the formulaic outcome of all

incentive awards taking into account

matters such as underlying business

performance and the shareholder

experience.

WIDER WORKFORCE

REMUNERATION

Our approach to the workforce salary

review for 2023 took into account the

considerable uncertainty in the global

economy with high inflation and cost

of living pressures affecting colleagues

in all of our locations as well as overall

cost pressures within the business.

Thesalary budget for 2023 is focused

on our less senior colleagues, with

increases taking into account both

seniority and location. In addition,

for our UK retail colleagues, we were

pleased to increase the hourly rate to

a minimum of £10.90 which reflects the

Real Living Wage in the UK in 2023.

Our all employee Save As You Earn

share option scheme was approved by

shareholders at our 2022 AGM and it is

expected participation will be offered

to colleagues later in 2023.

RENEWAL OF LTIP

Our current long-term incentive plan

expires in 2025 and the Committee

is taking the opportunity to renew

the plan at the 2023 AGM to ensure

we have the necessary flexibility for

the grant of LTIP awards to our below

board colleagues. The long-term

incentives for our Executive Directors

will continue to be covered by our

shareholder approved remuneration

policy. The new plan is substantially

in the same format as the current

LTIP but provides flexibility to make

deferred bonus share awards and

enables us to adapt both vesting

and performance periods for below

board LTIP participants to support our

remuneration strategy and ensure we

are providing incentives that are both

market competitive in all the markets

in which we operate and effective

in incentivising the performance of

the business and shareholder return.

We use our LTIP as a mechanism for

incentivisation and retention and

make awards to colleagues within

the business and not just at our most

senior management tiers. For this

reason our new plan removes the 5%

dilution limit but retains the 10% limit

for all share awards. This will enable

us to manage our share dilution while

providing LTIP awards beyond our

most senior colleagues as well as our

all employee share plan. The maximum

performance share plan award limit

in the LTIP is 300% of salary providing

flexibility to grant market competitive

incentives in all our markets including

those where packages may have

a significantly greater weighting to

long-term incentives. Our AGM notice

provides further details about this

plan which aligns to standard market

practice.

CONCLUSION

The Committee is comfortable that the

remuneration policy has operated as

intended for 2022.

Looking to 2023, the Board has

commenced searches to identify

successors for both Executive

Directors and the remuneration for

the individuals to be appointed will

be in line with the current shareholder

approved policy. As the integration

of 888 and William Hill progresses

ahead of our next policy vote at the

2024 AGM, the Committee will review

the Policy to ensure it provides the

structure and necessary flexibility to

enable us to incentivise and reward

management for the successful

integration and growth of our business.

The policy review will be led by Andrea

Joosen, who will become Committee

Chair in my stead at the 2023 AGM.

I look forward to shareholders’ support

for the shareholder resolution for my

Annual Statement and our Annual

Report on Remuneration, and for the

renewal of our long-term incentive plan

at our Annual General Meeting to be

held on 23 May 2023.

Anne de Kerckhove

Chair of the Remuneration Committee

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022110

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT

REMUNERATION POLICY TABLE

The table below sets out the remuneration policy which was approved by shareholders at the Annual General Meeting held

on 20 May 2021. The policy is intended to apply for the three-year period from the 2021 AGM.

APPROACH AND CONSIDERATIONS IN REVIEWING THE DIRECTORS’ REMUNERATION POLICY

The review of the Policy is carried out by the Remuneration Committee, in the absence of the Executive Directors

wherenecessary to manage potential conflicts of interest, and with the advice of our remuneration consultant Korn Ferry.

TheCommittee’s review process includes consideration of how the current policy aligns to and supports the business

strategy. The Committee considers market, regulation and governance developments as well as wider pay context, such

as pay ratios and group reward arrangements. The Committee also considers the guidelines of shareholder representative

bodies and proxy agencies and investor expectations. As part of this process the Committee will also consult with its largest

shareholder and consider feedback received.

FACTORS CONSIDERED IN REVIEWING THE POLICY AND CONSIDERING ITS OPERATION

The Committee considered as part of its most recent review, and is comfortable that, the Remuneration Policy and its

implementation are fully consistent with the factors set out in Provision 40 of the UK Corporate Governance Code (set

outbelow):

• Clarity: The Policy and the way it is implemented is clearly disclosed in this policy section of the Remuneration Report

andthe Annual Statement and supporting reports.

• Simplicity: The Policy is simple and straightforward, based on a mix of fixed and variable pay. The annual bonus and LTIP

include performance conditions which are aligned with key strategic objectives of the business.

• Risk: Performance targets for the incentive schemes provide appropriate rewards for stretching levels of performance

without driving behaviour which is inconsistent with the Company’s risk profile. Reputational risk from a perception of

“excessive” pay-outs is limited by the maximum award levels set out in the Policy and the Committee’s discretion to adjust

formulaic remuneration outcomes. To avoid conflicts of interest, no Executive Director or other member of management is

present when their own remuneration is under discussion.

• Predictability: The Policy includes full details of the individual limits in place for the incentive schemes as well as

“scenariocharts” which set out potential pay-outs in the event of different levels of performance, based on a number

ofreasonable assumptions.

• Proportionality: There is a clear link between individual awards, delivery of strategy and our long-term performance.

Inaddition, the significant role played by incentive/’at-risk’ pay and the presence of malus and clawback provisions

ensures that poor performance is not rewarded.

• Alignment to culture: The approach to Directors’ remuneration is consistent with the Group’s culture and values.

Base Salary

Purpose and Link

toStrategy

To recruit, motivate and retain high-calibre Executive Directors by offering salaries at market

competitive levels. Reflects individual experience and role.

Operation Reviewed annually with any changes normally effective from 1 January. Positioning and annual

increases are influenced by:

• our sector, where the market for executive talent is intense;

• the experience and performance of the individual;

• changes in responsibility or position;

• changes in broader workforce salary; and

• the performance of 888 as a whole.

Benchmarking is carried out on a total remuneration basis and takes into account pay levels for

comparable roles at a range of organisations of similar size and sector – including pay practices in

other UK listed companies and in the international gaming industry.

Opportunity Any increase to directors’ salaries will generally be no higher than the average increase for other

employees. However, a higher increase may be proposed in the event of a role change or promotion,

orin other exceptional circumstances.

888 Holdings PLC Annual Report & Accounts 2022 111

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

Benefits

Purpose and Link

toStrategy

Market competitive structure to support recruitment and retention.

Medical cover aims to ensure minimal business interruption as a result of illness.

Operation Executive Directors may receive various benefits in kind as part of their employment terms. These

may include an accommodation allowance (where 888 has required the executive to relocate), use

of a company car (or car allowance), health insurance (or a contribution towards a health insurance

scheme), “study fund” (a common savings benefit in Israel), disability and life assurance, relocation

expenses, directors’ indemnities and directors’ and officers’ insurances to the extent permitted by law

and other ad hoc benefits at the discretion of the Committee.

Opportunity The value of benefits is based on the costto 888 and there is no pre-determined maximum limit.

Therange and value of the benefits offered is reviewed periodically.

Pension

Purpose and Link

toStrategy

Contribution towards the funding of post-retirement life.

Operation 888 offers a defined contribution pension scheme (via outsourced pension providers) or cash in lieu

ofpension.

Opportunity Up to 15% of base salary. The Committee will align pension to the workforce average taking into

account market practice and legal requirements in the country of the executive and the wider

workforce pension.

Annual Bonus

Purpose and Link

toStrategy

Rewards the achievement of annual financial and non-financial strategic targets.

Operation Bonus targets (percentage of salary) are based on objective and disclosable calculations where possible.

The precise weightings between metrics may differ each year, although there will always be a greater

focus on financial as opposed to non-financial performance.

Any bonus payment in excess of 100% of salary is deferred into shares which vest in equal tranches

after one, two and three years. The deferral period continues on cessation of employment.

The Committee may adjust the formula-driven outturn of the annual bonus calculation in the event

that the Committee considers that it does not reflect underlying performance, overall shareholder

experience or employee reward outcome. Any such use of discretion would be detailed in the Chair’s

annual statement and Annual Report on Remuneration.

A dividend equivalent provision operates enabling dividends to be accrued (in shares) on unvested

deferred bonus shares or options and only in truly exceptional circumstances cash.

The bonus is subject to recovery and withholding provisions which may be applied if the financial

statements of 888 were materially misstated, an error occurred in assessing the performance conditions

of a bonus, if the Executive ceased to be a Director or employee due to gross misconduct, or in an

event of corporate failure, failure of risk management or reputational damage.

Opportunity The maximum opportunity is 200% of base salary.

The level of pay-out for the achievement of target performance, as set by the Committee is 50% of the

maximum amount. The threshold level of payment may be up to 25% of the maximum.

Performance

Metrics

Financial Performance

The financial component is based on 888’s key financial measures of performance.

A sliding scale of targets applies for financial performance targets which are measured annually.

The degree of stretch in targets may vary each year depending on the business aims and the broader

economic or industry environment at the start of the relevant year.

Non-financial Performance

Non-financial performance conditions will be based on KPIs in line with the business plan which the

Committee considers will enhance future financial performance, the long-term sustainability of the

business and shareholder value.

FACTORS CONSIDERED IN REVIEWING THE POLICY AND CONSIDERING ITS OPERATION CONTINUED

888 Holdings PLC Annual Report & Accounts 2022112

GOVERNANCE

Long Term Incentives (LTIP)

Purpose and Link

toStrategy

Rewards Executive Directors for achieving superior returns and sustainable growth for

shareholders over a longer-term timeframe.

Enables Executive Directors to build a meaningful shareholding over time and align goals

withshareholders.

Operation LTIP awards are made annually in the form of nil cost options or conditional awards with vesting

dependent on the achievement of performance conditions over at least three financial years,

commencing with the year of grant.

A post-vesting holding period applies to awards granted in or after 2019, which requires vested

shares (or shares acquired on the exercise of vested options) to be retained for two years post-

vesting (except for any earlier sale of shares to meet any tax liabilities triggered on vesting).

This holding period continues on cessation of employment.

The Committee may adjust the formula-driven outturn of an LTIP award in the event that the

Committee considers that it does not reflect underlying performance, overall shareholder

experience or employee reward outcome. Any such use of discretion would be detailed in the

Chair’s Annual Statement and Annual Report on Remuneration.

Awards are subject to recovery and withholding provisions which may be applied if there is a

material misstatement in 888’s financial statements, an error in the calculation of any performance

conditions, if the Executive Director ceases to be a Director or employee due to gross misconduct

or in an event of a failure of risk management, corporate failure or reputational damage.

A dividend equivalent provision operates enabling dividends to be accrued (in shares) on LTIP

awards to the extent they vest and only in truly exceptional circumstances cash.

Opportunity Award levels are determined primarily by seniority. A maximum individual grant limit of 200% of

salary applies, based on the face value of shares at the date of grant.

Performance Metrics Awards vest at the end of a three-year performance period based on performance measures

reflecting the outputs of the long-term strategy of the business at the time of grant.

Awards will vest based on a range of challenging financial, total shareholder return (TSR), or

strategic measures. Strategic measures, if used, will represent a minority of the award.

The Committee will review the weightings between measures and the target ranges prior to

each LTIP grant to ensure that the overall balance and level of stretch remains appropriate.

A sliding scale of targets applies for financial or TSR metrics with no more than 25% of the

award vesting at threshold performance.

Share Ownership Guidelines

Executive Directors are expected to build and maintain an interest equivalent in value to no less than two times salary.

Beneficially owned shares, fully vested unexercised nil-cost options (valued on a net of tax basis) and unvested awards

subject to a service requirement for vesting only (valued on a net of tax basis) will be included when determining the extent

to which the guideline holding is achieved. Until such time as the guideline threshold is achieved. Executive Directors are

required to retain 50% of the net of tax value of awards that vest under the LTIP or deferred annual bonus.

Post cessation of employment, Executive Directors will be required to retain shares from FY21 and future incentive awards

equal to 100% of salary for one year post cessation and 50% of salary for the second year post cessation, subject to the

Committee amending this requirement in exceptional circumstances.

Chair and Non-Executive Directors’ (NEDs) fees

Purpose and Link to Strategy To recruit, motivate and retain a Chair and Non-Executive Directors of a high calibre by offering

a market competitive fee level and which takes account of the specific circumstances of 888.

Operation The Chair and the Executive Directors determine the fees paid to the Non-Executive Directors.

The Chair’s fees are determined by the Remuneration Committee with reference to prevailing

fee rates amongst other gaming companies. Fees paid to the Non-Executive Directors are

set by reference to an assessment of the time commitment and responsibility associated with

each role, and prevailing fee rates amongst other gaming companies. Levels take account of

additional demands placed upon individual Non-Executive Directors by virtue of their holding

particular offices, such as Committee Chair and/or Senior Independent Director, and travel time

to Board meetings (which are held outside the UK). Additional fees may be paid as appropriate

to reflect increased time commitments of the role.

The Chair and the Non-Executive Directors are not eligible to participate in any bonus plan,

pension plan, share plan, or long-term incentive plan of 888. The Chair and Non-Executive

Directors are entitled to be reimbursed for any reasonable travel and accommodation and

other expenses incurred in the performance of their duties (including any tax incurred thereon)

including any expense deemed a taxable benefit in kind and the tax payable thereon.

Opportunity No maximum.

888 Holdings PLC Annual Report & Accounts 2022 113

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

DISCRETIONS RETAINED BY THE COMMITTEE IN OPERATING ITS INCENTIVE PLANS

The Committee will operate the annual bonus plan, deferred share bonus plan and LTIP according to their respective rules.

The Committee retains discretion in a number of regards to the operation and administration of these plans. These include,

but are not limited to, the following:

• the determination of vesting and the extent to which performance targets have been met;

• the determination of the treatment of leavers;

• determination of the extent of vesting in the event of a change of control; and

• adjustments required in certain circumstances (e.g. rights issues, corporate restructuring events and special dividends).

APPROACH TO SETTING REMUNERATION FOR A NEW RECRUIT

The remuneration package for a new Executive Director would take into account the skills and experience of the individual,

the market rate for a candidate of that experience and the importance of securing the relevant individual. Salary would be

provided at such a level as is required to attract the most appropriate candidate while paying no more than is necessary.

The annual bonus and LTIP award would be in line with the Policy with a maximum of 200% of salary annual bonus

opportunity and a maximum 200% of salary LTIP award level. In addition, the Committee may offer additional cash and/or

share based elements to replace benefits, deferred or incentive pay forfeited by an executive leaving a previous employer.

It would ensure that these awards would be consistent with awards forfeited in terms of delivery mechanism (cash or shares),

vesting periods, expected value and performance conditions. For an internal Executive Director appointment, any variable

pay element awarded in respect of the prior role may be allowed to pay out according to its terms or adjusted as relevant

to take into account the appointment. In addition, any other ongoing remuneration obligations existing prior to appointment

may continue. The Committee may agree that 888 will meet relocation expenses or match other benefits received by the

Executive Director in his previous employment, as appropriate.

REMUNERATION AWARDED PRIOR TO THE EFFECTIVE DATE

For the avoidance of doubt, authority is given to the Company to honour any commitments entered into with current or

former Directors under a previous shareholder approved policy that have been disclosed to shareholders in previous

remuneration reports.

SERVICE CONTRACTS AND LOSS OF OFFICE PAYMENT POLICY FOR EXECUTIVE DIRECTORS

Executive Directors have service contracts with up to 12-month notice periods. In the event of termination, the Executive

Directors’ contracts provide for compensation up to a maximum of base salary plus the value of any benefits (including

pension). 888 seeks to apply the principle of mitigation in the payment of compensation on the termination of the service

contract of any Executive Director. There are no special provisions in the service contracts for payments to Executive

Directors on a change of control of 888. In the event of an exit of an Executive Director, the overriding principle will be to

honour contractual remuneration entitlements and determine on an equitable basis the appropriate treatment of deferred

and performance linked elements of the package, taking account of the circumstances. Failure will not be rewarded.

If an Executive Director resigns or is summarily dismissed, salary, pension and benefits will cease on the last day of

employment and there will be no further payments. There are no other obligations to pay remuneration, or which could

impact remuneration, contained in any service contract other than the terms of the Executive Directors’ service agreements

described herein. Directors’ service agreements are available for inspection at 888’s registered office and at each annual

general meeting.

REMUNERATION FOR LEAVERS

Fixed pay

Salary, pension and benefits will be paid up to the length of the agreed notice period or agreed period of gardening leave.

Variable pay

Where a Director leaves for certain specified reasons such as retirement, as a result of injury, illness or disability or otherwise

with the agreement of the Committee (sometimes referred to as “good leaver” reasons) the following will apply:

Annual bonus and annual bonus deferred shares

Subject to performance, a bonus may be payable at the discretion of the Committee pro-rata for the portion of the

financial year worked. Unvested deferred bonus shares will ordinarily vest in full at the end of the normal vesting period.

TheCommittee has discretion to permit in exceptional circumstances such unvested awards to vest early rather than

continue on the normal vesting timetable, taking into account the Company’s policy for bonuses from 2019, and for

ExecutiveDirectors to retain an interest in shares in the Company for two years post-employment.

888 Holdings PLC Annual Report & Accounts 2022114

GOVERNANCE

LTIPs

Unvested awards under the 888 Long Term Incentive Plan 2015 would normally vest on the normal vesting date unless the

Committee determines that such awards shall instead exceptionally vest at the time of cessation, taking into account the

Company’s policy for awards granted from 2019 for Executive Directors to retain an interest in shares in the Company for two

years post-employment. Unvested awards will only vest to the extent that the performance conditions have been satisfied

(over the full or curtailed period as relevant). A pro-rata reduction in the size of awards would normally apply, based upon the

period of time after the grant date and ending on the date of cessation of employment relative to the normal vesting period.

Where a Director leaves for any other reason, all annual bonus, annual bonus deferred shares and LTIP awards will lapse

immediately on cessation.

Depending upon circumstances, the Committee may consider other payments to settle statutory entitlements, legal claims or

potential legal claims, in respect of an unfair dismissal award, outplacement support and assistance with legal fees, including

the statutory obligation in Israel to make a severance payment on cessation for any reason equal to one month’s gross

salary for every year of service.

TERMS OF APPOINTMENT FOR NON-EXECUTIVE DIRECTORS

The Non-Executive Directors serve subject to letters of appointment and are appointed subject to re-election at each annual

general meeting. The Non-Executive Directors are typically expected to serve for three years, although the Board may invite

a Non-Executive Director to serve for an additional period. Their letters of appointment are available for inspection at 888’s

registered office and at each annual general meeting.

DIRECTORS’ SERVICE CONTRACTS

The unexpired term of the directors’ service contracts or appointment letters are as follows:

Name Position Unexpired Term of Service Contract

Lord Mendelsohn Chair Until 22 September 2023. No remuneration is payable in respect of any

unexpired portion of the term of the Chair’s appointment, including if the

Chair is asked to step down from the Board.

Yariv Dafna Chief Financial Officer Service contract terminates and notice period ends on 12 January 2024.

Anne de Kerckhove Non-executive Director Until 27 November 2023. No remuneration is payable in respect of any

unexpired portion of the term of the Director’s appointment, including

ifthe Director is asked to step down from the Board.

Mark Summerfield Non-executive Director Until 5 September 2025. No remuneration is payable in respect of any

unexpired portion of the term of the Director’s appointment, including

ifthe Director is asked to step down from the Board.

Limor Ganot Non-Executive Director Until 1 August 2023. No remuneration is payable in respect of any

unexpired portion of the term of the Director’s appointment, including

ifthe Director is asked to step down from the Board.

Andria Vidler Non-Executive Director Until 4 July 2025. No remuneration is payable in respect of any unexpired

portion of the term of the Director’s appointment, including if the Director

is asked to step down from the Board.

Andrea Gisle Joosen Non-Executive Director Until 4 July 2025. No remuneration is payable in respect of any unexpired

portion of the term of the Director’s appointment, including if the Director

is asked to step down from the Board.

Ori Shaked Non-Executive Director Until 12 September 2025. No remuneration is payable in respect of any

unexpired portion of the term of the Director’s appointment, including

ifthe Director is asked to step down from the Board.

Until 11 January 2022, each of Lord Mendelsohn’s and Limor Ganot’s director’s fees were paid to their respective personal

service companies and their respective personal service companies had accordingly entered into service agreements with

the Company. Such agreements were terminated with effect from 11 January 2022 and accordingly, since 11 January 2022,

Lord Mendelsohn and Limor Ganot have been directly engaged by the Company.

888 Holdings PLC Annual Report & Accounts 2022 115

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

HOW THE VIEWS OF SHAREHOLDERS ARE TAKEN INTO ACCOUNT WHEN DETERMINING

DIRECTORS’ PAY

888 engages with investors regarding remuneration issues and in respect of any proposed changes to the Directors’

Remuneration Policy and significant changes to operation of that policy and intends to continue doing so. Views of

shareholders and their representative bodies expressed at the annual general meeting and feedback received at other times

will be considered by the Committee. The Annual Report on Remuneration sets out specific engagement for any one year.

HOW THE VIEWS OF EMPLOYEES ARE TAKEN INTO ACCOUNT WHEN DETERMINING DIRECTORS’ PAY

888 has not consulted with employees regarding the current Directors’ Remuneration Policy. The Annual Report on

Remuneration sets out engagement activities with stakeholders during the year of report.

In determining the remuneration policy for Executive Directors, the Committee takes account of the policy for employees

across the workforce. In particular, when setting base salaries for executives, the Committee takes into account the salary

increases being offered to the workforce as a whole. The overall structure of the remuneration policy for Executive Directors

is broadly consistent with that for other senior employees, but reflects the additional risks and responsibilities borne by the

Executive Directors as well as market practice in competitor businesses and the locations within which it operates. Executive

remuneration and remuneration of senior employees has a significant focus on performance-related pay. 888’s Executive

Committee all participate in the same annual bonus and LTIP arrangements as the Executive Directors and 888’s Business

Leadership Forum also participate in a long-term equity plan.

ILLUSTRATION OF APPLICATION OF CURRENT REMUNERATION POLICY

The following charts illustrate the operation of the Directors’ Remuneration Policy for the Executive Chair and the CFO, under

three different performance scenarios: ‘Fixed pay’, ‘Target’, and ‘Maximum’.

Assumptions:

• Fixed: Shows fixed remuneration only, base salary or fee for 2023, taxablebenefits (as disclosed for the previous financial

year and excluding any benefits related to relocation for the CFO) and pension for the CFO.

• Target: Shows fixed remuneration plus for the CFO 50% of the maximum annual bonus and 50% of maximum Long-term

incentive opportunity.

• Maximum: Shows fixed remuneration plus for the CFO 150% of salary maximum annual bonus and 35% of salary Long-term

incentive award.

888 Holdings PLC Annual Report & Accounts 2022116

GOVERNANCE

CFO – Yariv Dafna

Maximum

Target

Minimum

41% 48% 11%

58% 34%

100%

Fixed Short-term incentive Long-term incentive LTIP value with 50% share price growth

£’000 £0 £200 £300 £600 £800 £1,000 £1,200 £1,400

Executive Chair – Lord Mendelsohn

Maximum

Target

Minimum

£’000 £0 £100 £200 £300 £400 £500 £600 £700

100%

£670

£766

£443

£670

100%

£1,151

£1,090

ANNUAL REPORT ON REMUNERATION

This Annual Report on Remuneration together with the Chair’s Annual Statement, will be subject to an advisory vote at the

Annual General Meeting to be held on 23 May 2023. The information on page 118 with respect to Directors’ Emoluments and

onwards through page 125 has been audited.

OPERATION OF REMUNERATION POLICY FOR 2023

Base salaries

The Executive Chair’s fee is £670,000 p.a. effective from 30 January 2023 (£320,000 for the period 1 January to 29January)

reflecting his full-time role until a new CEO is appointed and he returns to his Non-Executive Chair role.

No salary increases were awarded to our former CEO and CFO for 2023.

Director 2023 2022 Increase

Executive Chair £670,000 Non-Executive Chair fee £320,000 p.a. to 29 January 2023

CFO £350,000 £350,000 0%

ANNUAL BONUS

The CFO’s maximum bonus opportunity is 150% of salary. The Executive Chair will not participate in the annual bonus plan.

The annual bonus for our CFO will be determined as to 60% on Group operational targets equally weighted between Revenue,

EBITDA, EBITDA margin, regulatory compliance and ESG scorecard (weighted 50% safer gambling, 25% environmental

impact, 25% employee engagement) and 40% by specific integration objectives with 40% weighted to operational cashflow

and the remainder to critical business integration priorities.

The annual bonus targets are considered by the Committee to be commercially sensitive at this time. Full retrospective

disclosure of targets and performance against them will be disclosed in next year’s report.

The Committee will review and set appropriate annual bonus metrics for our new CEO and CFO on their appointment taking

into account progress, at the time of their joining, against the business strategy for the year and the key critical areas of

focus for the remainder of the year.

LONG-TERM INCENTIVE PLAN

The Executive Chair will not participate in the LTIP.

As explained in the Committee Chair’s Annual Statement, our CFO will be granted an LTIP for 2023 to provide effective

incentivisation on those critical areas of 2023 performance that are needed to deliver the longer term growth on which the

vesting of the 2023 LTIP will depend. The LTIP award will be based on a prorated 50% of salary award reflecting the CFO’s

employment with the business for one year of the three year performance period. The number of shares subject to the award

will be 180,812 which is a 30% discount to the number he would have received based on the share price on 14 February of 67

pence and reflecting the significant fall in share price since awards were granted in 2022. This equates to an award of 35%

of salary. The Committee understands that it is unusual to grant an LTIP award to an executive director during their notice

period. However, noting the period of time the CFO will be working with the business, the criticality of performance for 2023 as

the basis for growth to 2025 as well as the departure of our CEO, the Committee has determined that this is appropriate in all

the circumstances. The Committee retains the discretion to scale back the formulaic outcome of incentive awards taking into

account matters such as underlying business performance and the shareholder experience.

The performance conditions will continue to be based 50% on adjusted earnings per share growth targets and 50% on

relative TSR. An additional TSR peer group has been added for the 2023 award such that the TSR performance condition will

be tested 50% against the sector peer group and 50% against the FTSE 250 excluding investment trusts.

The performance targets for the 2023 award are set out below. Straight line vesting will occur between target points.

Measure

Weighting

(% of max award)

Threshold

(25% of max vesting)

Maximum

(100% of max vesting)

Relative TSR versus sector

peers*

25% Median Median + 10% p.a. compounded

Relative TSR versus FTSE 250

excluding Investment Trusts

25% Median Upper quartile

Adjusted EPS 50% 20.3% CAGR 33.4p 24.0% CAGR 36.6p

* The TSR sector peer group for 2023 comprises Bally’s Corporation., Betsson AB, Flutter Entertainment plc, Entain plc, Kambi Group plc, Kindred Group plc, Playtech plc

and Rank Group plc.

PENSION AND BENEFITS

The Executive Chair will be entitled to receive travel related benefits in relation to carrying out his role.

The CFO’s pension and benefits remain as described in last year’s report.

888 Holdings PLC Annual Report & Accounts 2022 117

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

NON-EXECUTIVE DIRECTORS FEES

The Non-Executive Director fees remain unchanged from 2022.

• Non-executive Chair fee (once Chair resumes non-executive role): £320,000

• Non-executive Director fee: £90,000

• Senior Independent Director fee: £20,000

• Chair of a Board committee (inclusive of membership fee): £15,000 and

• Membership of Audit, Remuneration or ESG committee: £5,000

REMUNERATION PAID TO EXECUTIVE DIRECTORS FOR SERVICES IN 2022

The following table presents the Executive Directors’ emoluments in respect of the year ended 31 December 2022

(allamounts are in £‘000).

Executive

Directors

Salary

(2)

£’000

Taxable

Benefits

(3)

£’000

Annual

Bonus

(4)

£’000

Long-Term

Incentives

(5)

£’000

Pension

(6)

£’000

Total

£’000

Total

Fixed Pay

£’000

Total

Variable Pay

£’000

Itai Pazner,

CEO

2022 687 747 — — 42 1,476 1,476 —

2021 643 88 1,040 1,103 96 2,970 827 2,143

Yariv Dafna,

CFO

2022 350 273 — 16 53 692 676 16

2021 320 308 422 — 48 1,098 676 422

1. For 2022 the Directors’ remuneration where applicable is converted from New Israeli Shekels into GBP at the average rate of exchange for the relevant month it

was paid. For 2021 the average GBP/USD FX rate in 2021 has been applied to the figures disclosed in the 2021 remuneration report or the actual GBP amount has

been used as applicable.

2. Mr Pazner’s salary for 2022 was paid in New Israeli Shekels ILS 1,938,916 for the period to 31 August and from 1 September £225,333.

3. Benefits for Mr Pazner include relocation related payments including housing and schooling, taxation and immigration support and one-off costs in association

with his move from Israel to the UK (£405,282). An amount of £210,076 is also included in benefits which represents a contractual payment that was triggered

under Israeli law when he moved from an Israeli contract to a UK contract on relocation to the UK. This payment would otherwise have been required to be made

under Israeli law on his actual cessation from the business. Other benefits payable include convalescence and health insurance for Mr Pazner and his family

anddisability and life insurance, specific Israeli “study fund” contributions up to the Israeli tax-free ceiling, car allowance and meals allowance;

Benefits for Mr Dafna include relocation related payments including housing and schooling (total £232,750), as well as car allowance and health, disability and

lifeinsurance.

4. No bonus is payable for 2022.

5. Performance-based long-term incentives are disclosed in the financial year in which the performance period ends. The CFO’s LTIP for the single total figure in 2022

is the value of the 2020 LTIP award, for which the performance period ended on 31 December 2022, and will vest in 2024 due to the prorated award in respect of

his year of appointment in 2020 being granted at the same time as the 2021 LTIP award. The value is based on the average share price for the last three months

of FY22 of £0.95. This price compares to a share price on the date of grant of £3.485.

The 2019 LTIP value has been restated to reflect the actual share price on vesting of £1.95.

6. 888 offers a defined contribution pension scheme (via outsourced pension providers) or cash in lieu of pension. In accordance with standard practice in Israel,

MrPazner received personal pension scheme contributions in an amount of 6.57% of base salary, which reduced to 5% of salary on his relocation to the UK.

Mr Dafna receives a cash payment in lieu of pension in the amount of 15% of base salary.

NON-EXECUTIVE DIRECTORS’ AND CHAIR’S FEES

Non-Executive Directors

Fee

£’000

Other

£’000

Total Fee

£’000

Anne De Kerckhove

2022 180 — 180

2021 140 — 140

Mark Summerfield

2022 145 — 145

2021 114 — 114

Limor Ganot

2022 100 1 101

2021 97 — 97

Lord Mendelsohn

2022 335 — 335

2021 276 — 276

Randy Freer

2022 14 — 14

2021 — — —

Andria Vidler

2022 44 — 44

2021 — — —

Andrea Gisle Joosen

2022 44 — 44

2021 — — —

Ori Shaked

2022 29 — 29

2021 — — —

1. Both Mark Summerfield and Anne de Kerckhove received an additional non-executive director fee of £30,000 for 2022 for the additional time they spent during

the year on integration matters.

2. Limor Ganot received reimbursed grossed up expenses of £1,232.

3. Lord Mendelsohn received an additional fee of £15,000 for Chairing the ESG Committee.

4. Randy Freer was appointed as a non-executive director on 5 July 2022 but stood down on 31 August 2022 as a result of increased time commitments. Randy Freer

waived his fee for 2022.

5. Andria Vidler was appointed as a non-executive director on 5 July 2022.

888 Holdings PLC Annual Report & Accounts 2022118

GOVERNANCE

6. Andrea Gisle Joosen was appointed as a non-executive director on 5 July 2022.

7. Ori Shaked was appointed as a non-executive director on 13 September 2022 following the Group’s largest shareholder, Sinitus Nominees Limited in trust on behalf

of Dalia Shaked, exercising its right to appoint a non-executive director.

ANNUAL BONUS PAYMENTS IN RESPECT OF 2022 PERFORMANCE

• The annual bonus opportunity was 200% of salary for the CEO and 150% of salary for the CFO. The financial metrics were

based on 888 performance excluding the William Hill business with 50% based on adjusted EBITDA targets, 20% revenue

excluding the US business and 30% strategic objectives.

• The adjusted EBITDA and revenue targets were not met. The scoring of the strategic element of the bonus resulted in a

formulaic outcome of 14.25% of the total bonus being payable. However, the Committee determined, given underlying

business performance and wider stakeholder experience that no bonus will actually be paid for 2022.

FINANCIAL PERFORMANCE

• The 2022 adjusted EBITDA and revenue performance targets and performance against them is as follows:

Performance Measures Weighting

Threshold

(25% pay-out)

Target

(50% pay-out)

Max

(100%

pay-out)

Actual

performance

Bonus

awarded for

that element

Adjusted EBITDA 50% £123m £129m £135m £98m

0% of

maximum

Revenue excluding the US business 20% £713m £773m £790m £605m

0% of

maximum

Note: The targets were set in US$ and have been converted to pounds sterling using a rate of 1:0.806452.

STRATEGIC PERFORMANCE

Set out below are the strategic objectives set for the Executive Directors and performance against them.

Objective Weight Objectives set Performance Score

US expansion 25% a) Launch 3 or more new states under

theB2C business

b) Achieve at least 90% of the US revenue

according to the 2022 budget plan

inDecember 2022

a) Virginia & MI launched. Indiana

readyto launch however launch

impacted by external factors

outsideof managements control.

b) US revenue targets not achieved.

12.5% out

of 25%

Regulatory

compliance

25% a) Management of multiple accounts’

riskinthe UK

b) Completion of all objectives, actions

and priority items of arising from 2021

Regulatory review.

a) Progress made.

b) Actions completed.

Regulatory Compliance continues to be

a focus for 888 and whilst all actions and

priority items from the 2021 regulatory

review were completed, there is still

more work to do to ensure an effective

execution of proactive commitments

made to improve compliance standards.

0% out

of25%

Safer

gambling

20% a) Complete Control Centre rollout in

regulated markets for at least 90% of 888’s

non-US regulated revenues

b) Board approval and commencement

ofSafer Gambling strategic and

operational plan

a) Achieved.

b) Not achieved.

5% out

of20%

William Hill

integration

30% a) Agreed actions to realise targeted

synergies for 2022-2023

b) Approval and commencement

ofoverheadsavings plan

c) Approval and commencement

implementation of operational model

forcombined business

a) Synergy plan approved

andcommunicated in CMD.

b) Plan agreed as part of restructuring

plan with ongoing implementation

c) Operating model agreed

withongoingimplementation.

30% out

of30%

Overall 100% 47.5%

888 Holdings PLC Annual Report & Accounts 2022 119

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

TOTAL BONUS PAYABLE FOR 2022

The Committee exercised discretion to reduce the formulaic bonus outcome to zero in light of business performance and

wider stakeholder experience.

Director

Adjusted EBITDA

(% payout of

50%)

Revenue

excluding US

business

(% payout of

20%)

Strategic

objectives

(% payout of

30%)

Formulaic

payout

(% of maximum)

Payout after

Committee

exercise of

discretion

Total payout

£’000

Itai Pazner 0% 0% 14.25% 14.25% 0% £0

Yariv Dafna 0% 0% 14.25% 14.25% 0% £0

LONG-TERM INCENTIVE AWARDS WITH PERFORMANCE PERIOD ENDING IN THE YEAR ENDED

31DECEMBER 2022

The 2020 LTIP awards have a performance period that ended on 31 December 2022. The awards are based 50% on TSR

performance and 50% on adjusted EPS targets.

The table below sets out the achievement against the TSR and adjusted EPS performance condition, resulting in total vesting

of 50% of maximum.

TSR

Adjusted EPS

2,3

Performance level Performance required % vesting Performance required % vesting

Below threshold Below median 0% Less than 3% CAGR 0%

Threshold Median = 41.6% 25% 3% CAGR 25%

Stretch or above

33% above median =

88.5%. 100% 9% CAGR 100%

Actual achieved -37.4% 0% 15.3% CAGR 100%

1. TSR peer group comprises Entain, Sportech, Playtech, Flutter Entertainment, Betsson AB, Kindred Group and Rank Group.

2. The adjusted EPS performance condition was based on 888 adjusted EPS not including the William Hill business on the basis the William Hill business wasacquired

only 6 months prior to the 3 year performance period ending.

3. The adjusted EPS for the 888 (excluding William Hill) business was 16.7 pence per share, which results in maximum vesting.

Details of the level of vesting and the actual number of shares and estimated value in respect of the awards granted

under the 2020 LTIP, based on the above, is shown in the table below. Mr Pazner’s award lapsed following his cessation of

employment on 3 March 2023.

Executive

Number of shares

at grant

Number of shares

to lapse

Number of shares

to vest

Dividend accrual on

vested share value

Value of shares

excluding

Dividend Accrual

Itai Pazner

898,332 898,332 0 0 0

Yariv Dafna

34,433 17,217 17, 216 0 16,318

1. Dividends accrue on awards at the date of a dividend payment to the date of vesting and upon exercise the value of the accrued dividends is paid to the

employee on the number of vested awards.

2. The value of the vested shares is based on the share price of £0.95 being the average share price for the last three months of 2022.

3. The CEO’s LTIP award which had a value of £425,745 has lapsed on his cessation of employment on 3 March 2023.

4. The CFO received a pro-rated LTIP award for 2020 reflecting his date of joining in 2020, the award was however granted in 2021 and will vest in March 2024.

888 Holdings PLC Annual Report & Accounts 2022120

GOVERNANCE

SCHEME INTERESTS AWARDED DURING THE YEAR

The table below sets out the grants under the 888 Holdings plc Long Term Incentive Plan in 2022, and the Deferred Share

Bonus Plan awards made in relation to the 2021 bonus. The awards to Mr Pazner subsequently lapsed on his cessation of

employment on 3 March 2023.

Executive Award Type Grant Date

Number of

awards granted

Face value of

awa rds gra nte d

Face value of

awards as %

salary

% vesting at

threshold

performance

Itai Pazner LTIP

10-Mar-22 728,529 £1,378,377 200% 25%

Deferred share bonus

10-Mar-22 196,141 £371,099 N/A NA

Yariv Dafna LTIP

10-Mar-22 277,484 £525,000 150% 25%

Deferred share bonus

10-Mar-22 54,123 £102,401 N/A NA

1. The share price used to determine the number of shares granted was the share price on the day prior to grant (£1.892 on 9 March 2022). The awards to Mr Pazner

were conditional awards of Ordinary Shares and to Mr Dafna share options.

2. This award is due to vest subject to performance conditions being met at the end of the performance period ending 31 December 2024.

The performance conditions for the 2022 LTIP are split equally between earnings per share (‘EPS’) targets and relative total shareholder return (‘TSR’) targets.

Vesting begins for achievement of the threshold target for which 25% of the award vests and increases on a straight line basis to the maximum target for which

100% of the award vests for achievement of the target or above. No vesting occurs below the threshold target. Performance is measured over three years

beginning 1 January 2022.

The EPS targets set at grant were: Threshold – 3% CAGR and Maximum – 9% CAGR. These targets were amended by the Committee following the acquisition of the

William Hill business to Threshold 26.25 pence and Maximum 29.13 pence or 9.77% CAGR to 13.64% CAGR from a restated 2021 base of 19.85 pence.

The TSR targets are: Threshold – Median (888’s TSR performance in line with the median TSR of the peer group) and Maximum – Median + 10% p.a. compounded

(888’s TSR performance in line with the median TSR of the peer group + 10% p.a. compounded)

The TSR peer group comprises the following companies: Bally’s Corporation, Betsson AB, Flutter Entertainment plc, Entain plc, Kambi Group plc, Kindred Group plc,

LeoVegas AB, Playtech plc & Rank Group plc

3. Granted on 10 March 2022 by way of deferral of the excess portion of the 2021 annual bonus into shares in accordance with the Company’s Remuneration Policy

and pursuant to the Company’s Deferred Bonus Share Plan, and vesting in equal tranches over one, two and three years. No further performance conditions apply

to the vesting of the awards.

LOSS OF OFFICE PAYMENTS AND PAYMENTS TO PAST DIRECTORS

Mr Pazner, Chief Executive Officer, stepped down from his role on 30 January 2023 and left the business on 3 March 2023.

All unvested deferred share bonus awards and long-term incentive awards lapsed on cessation. Mr Pazner will be paid his

normal salary of £676,000, pension of £33,800, and benefits of £100,074 for his 12 month notice period in total £809,874 with

insurance benefits continuing for the notice period. He will also continue to receive accommodation and schooling support

totalling £735,000. There will be a duty to mitigate all payments.

Mr Dafna, Chief Financial Officer, will step down from the Board once a new Chief Financial has been appointed. His notice

period ends on 12 January 2024. His remuneration for FY23 is set out in the previous pages of this report. Mr Dafna will retain

his unvested incentive awards with deferred bonus awards vesting at the usual time and for LTIP awards, performance

tested, time pro-rating and vesting at the usual time. Once he ceases to be a Director, full details of his remuneration will be

disclosed on the Company’s website and included in the 2023 Remuneration Report.

888 Holdings PLC Annual Report & Accounts 2022 121

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS

The Executive Directors are required to build and maintain a shareholding in 888 worth two times their annual salary as set

out in the Remuneration Policy.

Details of the Directors’ interests (and of their connected persons) in shares as at 31 December 2022 are shown in the table

below. There were no changes in the Directors’ interests in shares between 31 December 2022 and the date of this Report and

3 February 2023 for Mr Pazner.



Number of Ordinary Shares At 31 December 2022

Director

Legally

owned

Unvested

shares with

performance

conditions

Unvested

without

performance

conditions

Unvested

options

with

performance

conditions

Unvested

options

without

performance

conditions

Vested

unexercised

options

Total

Total for

shareholding

guideline

achievement

against

shareholding

guideline

Itai Pazner 1,259,291 1,985,671 — — 245,813 35,607 3,526,382 1,408,444 181%

Yariv Dafna 20,000 — — 449,650 58,076 1,977 529,703 51,828 13%

Mark

Summerfield 32,412 — — — — — 32,412 — N/A

Anne De

Kerckhove — — — — — — — — N/A

Lord

Mendelsohn 100,000 — — — — — 100,000 — N/A

Limor Ganot — — — — — — — — N/A

Randy Freer — — — — — — — — N/A

Andria

Vidler — — — — — — — — N/A

Andrea

Joosen — — — — — — — — N/A

Ori Shaked — — — — — — — — N/A

1. Nil Cost Options.

2. The Executive Directors are required to build and maintain a shareholding equivalent to 200% of base salary. Shares counting towards this guideline include

legally owned shares, unvested options without performance conditions (valued on a net of tax basis), and fully vested but unexercised nil-cost options (valued

on a net of tax basis). Achievement against the guideline holding is calculated using the share price at 31 December 2022. Following Mr Pazner’s cessation of

employment on 3 March 2023, all his unvested awards lapsed.

3. Share price at 31.12.2022 was £0.87

No Director was materially interested during the year in any contract which was significant in relation to the business of 888.

PERFORMANCE GRAPH

The following graph shows 888’s performance*, measured by TSR, compared with the performance of the FTSE 250 Index.

Thedirectors consider that the FTSE 250 Index is the most appropriate comparator benchmark as it has been a member

ofthisindex for a significant period of the time covered by the chart.

* 888 Holdings plc Ordinary Shares of GBP 0.005 each, being the shares of the Company’s equity share capital whose listing or admission to dealing has resulted in

the Company falling within the definition of “quoted company”.

888 Holdings PLC Annual Report & Accounts 2022122

GOVERNANCE

450

400

350

300

250

200

150

100

31 Dec

2012

31 Dec

2013

31 Dec

2014

31 Dec

2015

31 Dec

2016

31 Dec

2017

31 Dec

2018

31 Dec

2019

31 Dec

2020

31 Dec

2021

31 Dec

2022

888 Holdings FTSE 250

TOTAL REMUNERATION HISTORY FOR CEO

The table below sets out the total single figure remuneration for the CEO over the last ten years with the annual bonus paid

as a percentage of the maximum and the percentage of long-term share awards where the performance period determining

vesting ended in the year.

2013 2014 2015

2016

2017 2018

2019

Itai

Frieberger

2019

Itai

Pazner 2020 2021 2022

Total remuneration

(£000s) 815 808 3,544 1,369 8,358 1,886 364 1,354 2,000 2,970 1,476

Annual bonus (%) 100% 100% 100% 100% 100% 29.2% 74.6% 74.6% 92.5% 78.0% 0.0%

LTIP vesting (%) 0% 0% 59% 100% 100% 73.8% 30.6% 30.6% 89.9% 88.5% 0.0%

1. Brian Mattingley’s total remuneration in 2015 included a phantom award granted to him on 27 March 2012 and which vested on 27 March 2015. Reflects Brian

Mattingley’s tenure as CEO until 13 May 2015.

2. Mr Frieberger was appointed as CEO on 2 March 2016 and stepped down as CEO on 23 January 2019. Remuneration is salary, benefits, pension and annual bonus

for the period as CEO and the total LTIP value for 2019.

3. Mr Pazner was appointed as CEO on 24 January 2019. Remuneration is salary, benefits, pension and annual bonus for the period as CEO and the total LTIP value for 2019.

4. Mr Pazner’s 2020 LTIP award lapsed on his cessation of employment and is not therefore included in his Total Remuneration for 2022. The LTIP vesting level was

50% of maximum.

PERCENTAGE CHANGE IN DIRECTOR REMUNERATION COMPARED TO THE AVERAGE FOR

OTHEREMPLOYEES

The following table sets out the percentage change in salary, taxable benefits and annual bonus from financial year 2019

tofinancial year 2022, for Directors and employees of the Group, taken as a whole.



Change 2022 vs 2021 Change 2021 vs 2020 Change 2020 vs 2019



Base

salary/fee Benefits Bonus

Base

salary/fee Benefits Bonus

Base

salary/fee Benefits Bonus

Itai Pazner 4% 749% -100% 9% 10% 23% 4% -2% 29%

Yariv Dafna 9% -11% -100% N/A N/A N/A N/A N/A N/A

Mark Summerfield 28% N/A N/A 4% N/A N/A N/A N/A N/A

Anne De Kerckhove 28% N/A N/A 26% N/A N/A 12% N/A N/A

Lord Mendelsohn 22% N/A N/A N/A N/A N/A N/A N/A N/A

Limor Ganot 3% N/A N/A N/A N/A N/A N/A N/A N/A

Randy Freer N/A N/A N/A N/A N/A N/A N/A N/A N/A

Andria Vidler N/A N/A N/A N/A N/A N/A N/A N/A N/A

Andrea Joosen N/A N/A N/A N/A N/A N/A N/A N/A N/A

Ori Shaked N/A N/A N/A N/A N/A N/A N/A N/A N/A

Employees 8% 7% -100% -2% -1% -14% 0% -7% 88%

1. The CEO’s benefits have increased because of the relocation benefits he has received on his relocation to the UK.

2. Mark Summerfield’s fee has increased because he received an additional fee for 2022 of £30,000 for the additional time spent during the year on integration matters.

3. Anne De Kerckhove’s fee has increased because she received an additional fee for 2022 of £30,000 for the additional time spent during the year on integration matters.

4. Lord Mendelsohn’s fee increase reflects his appointment as Chair of the Board on 31 March 2021.

5. Randy Freer was appointed as a non-executive director on 5 July 2022 but stood down on 31 August 2022 as a result of increased time commitments.

6. Andria Vidler was appointed as a non-executive director on 5 July 2022.

7. Andrea Gisle Joosen was appointed as a non-executive director on 5 July 2022.

8. Ori Shaked was appointed as a non-executive director on 13 September 2022 following the Group’s largest shareholder, Sinitus Nominees Limited in trust on behalf

of Dalia Shaked, exercising its right to appoint a non-executive director.

9. Employee numbers were calculated on a per average head count basis.

The salary figure includes base salary together with other payments made to the employees (e.g. sick pay, vacation pay), but excluding discretionary bonuses.

The benefits figure includes benefits granted to employees which are not part of salary (e.g. medical insurance, meals, further education funds).

Pension amounts are not included in benefits.

The short term incentives figure solely includes bonuses, which are based on an estimation by the company based on the bonus accrual, since bonuses are

generally paid to Group employees in April in respect of the previous financial year.

888 Holdings PLC Annual Report & Accounts 2022 123

GOVERNANCE

DIRECTORS’ REMUNERATION REPORT CONTINUED

CEO PAY RATIO

Method 25

percentile 50

percentile 75

percentile

2022 A 1:22 1:18 1:13

2021 A 1:62 1:48 1:35

2020 A 1:33 1:26 1:19

2019 A 1:25 1:19 1:15

CEO 25

percentile 50

percentile 75

percentile

Salary £687,000 £51,000 £67,000 £91,000

Total pay and benefits £1,476,000 £66,000 £84,000 £113,000

The table above sets out the CEO pay ratio for 2019 to 2022. The ratios have been calculated as far as practicable following

the methodology in Option A, as this is the most accurate method of calculation. The CEO pay is compared to the pay of our

Israeli employees at the 25th, 50th and 75th percentile. The CEO relocated from Israel to the UK in September 2022 and the

pay ratio for 2022 continues to be based on the Israeli workforce. For 2023 the comparison will move to the UK workforce.

The decrease in the ratio for 2022 is as a result of no bonus for 2022 and the CEO’s 2020 LTIP award lapsing on cessation

of his employment. The overall structure of the remuneration policy for Executive Directors is broadly consistent with that

for other senior employees, i.e. with a significant focus on performance related pay, but reflects the additional risks and

responsibilities borne by the Executive Directors.

The reward policies and practices for our employees are aligned to those set for the Executive Directors, including the CEO

and on this basis the Committee is satisfied that the median pay ratio is consistent with the pay, reward and progression

policies across the 888 Group employees.

RELATIVE IMPORTANCE OF SPEND ON PAY 2022 VS 2021

The graph above sets out the actual expenditure by 888 in financial years 2021 and 2022 on dividend and remuneration to

Group employees.

No other comparables were chosen for the disclosure in this 2022 Remuneration Report because of the difficulty of providing

comparable data from 2021 to 2022 given the William Hill acquisition.

The calculation of the comparables is as set out in the 2022 Consolidated Income Statement and Notes to the Financial

Statements. For FY21 we have shown the 888 business only and for FY22 we have shown two comparisons, one for 888 only

and one for 888 and William Hill combined (representing the acquisition of William Hill in July 2022).

COMMITTEE MEMBERS, ATTENDEES AND ADVICE

The Remuneration Committee consists solely of Non-Executive Directors. Ms Anne de Kerckhove chairs the Committee and

Committee members during the year were Mr Mark Summerfield and Ms Limor Ganot. Details of attendances at Committee

meetings are contained in the statement on Corporate Governance on page 92. The Chair of the Board attends meetings

by invitation. Members of the management team attend meetings by invitation, and where appropriate, but no individual is

present when their own specific remuneration arrangements are determined.

The Remuneration Committee’s remit is set out in its Terms of Reference which are available at https://corporate.888.com/

who-we-are/governance/board-committees.

250

200

150

100

888 William Hill

103

+6%

-100%

+121%

109

119

Employee pay and beneﬁts

FY21 FY21FY22 FY22

Dividends

888 Holdings PLC Annual Report & Accounts 2022124

GOVERNANCE

REMUNERATION COMMITTEE ADVISER

Korn Ferry was appointed Remuneration Committee adviser to 888 on 30 November 2018 following a tender process.

The primary role of the adviser to the Committee is to provide independent and objective advice and support to the

Committee’s Chair and members. Korn Ferry has discussions with the Committee Chair on a regular basis to discuss executive

and wider group remuneration matters, reporting, regulation, investor views and process. Korn Ferry has provided other

human capital services to the Group during the year through separate parts of the business. The Committee is comfortable

that the controls in place at Korn Ferry do not result in the potential for any conflicts of interest to arise. The Committee

undertakes due diligence periodically to ensure that its advisers remain independent and is satisfied that the advice that

it receives from Korn Ferry is objective and independent. Korn Ferry also is a signatory to the Remuneration Consultants

Group Code of Conduct which sets out guidelines for managing conflicts of interest and has confirmed to the Committee its

compliance with the Remuneration Consultants Group Code.

The total fees paid to Korn Ferry in respect of its services to the Committee for the year ending 31 December 2022 were

£120,000 (2021: £80,000). Fees are charged on a ‘time spent’ basis.

ENGAGEMENT WITH STAKEHOLDERS

The Committee includes as part of its annual agenda consideration and review of workforce policies and practices

and invites members of the management team to attend Committee meetings to provide input into the Committee’s

considerations. A key part of the Chief People Officer’s role, supported by the CEO and the non-executive director for

engagement, is to engage with the wider workforce, with views and feedback on remuneration provided to the Committee

and wider Board. The approach to workforce engagement has been reviewed for 2023 and an engagement plan will be led

by the designated director for workforce engagement, Ms Anne de Kerckhove, with the Chief People Officer and supported

by the Chair of the Board.

The Committee is committed to having a transparent and constructive dialogue with our investors and consults with its

investors to seek feedback on any proposed policy changes and significant operation of policy changes. In early 2023,

the Remuneration Committee Chair carried out engagement with investors to discuss the businesses’ overall approach to

remuneration and the operation of policy for 2023. This engagement was curtailed by changes to the Board but will continue

again as the Committee reviews the Directors’ Remuneration Policy in advance of the triennial vote at the 2024 AGM.

STATEMENT OF SHAREHOLDER VOTING AT AGM

Details of votes cast for and against the resolutions to approve the Annual Report on Remuneration at the 2022 AGM and the

Remuneration Policy at the 2021 AGM are shown below.

Advisory Vote to approve Annual Report on

Remuneration (at 2022 Annual General Meeting)

Advisory Vote to approve Remuneration Policy

(at 2021 Annual General Meeting)

Total number of votes % of votes cast Total number of votes % of votes cast

For 317,227, 305 97.44% 215,388,197 75.72%

Against 8,337,888 2.56% 69,066,028 24.28%

Vote Withheld 0 2,757,202

Approved by the Board of Directors and signed on behalf of the Board:

Anne de Kerckhove

Chair of the Remuneration Committee

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 125

GOVERNANCE

DIRECTORS’ REPORT

As permitted by legislation, some of the

matters required to be included in the

Directors’ Report have instead been

included in the Strategic Report on

pages 2 to 88, as the Board considers

them to be of strategicimportance.

Specifically, these are:

• the Strategic framework on pages

2 to 33, which provides detailed

information relating to the Group,

its business model and strategy,

operation of its businesses, future

developments and the results and

financial position for the year ended

31December 2022;

• future business developments

(throughout the Strategic Report);

• details of the Group’s policy on

addressing the Principal Risks and

uncertainties facing the Group,

which are set out in the Strategic

Report on pages 56 to 66;

• information on the Group’s GHG

emissions for the year ended

31December 2022, contained within

our TCFD section on pages 68 to 88;

• how we have engaged with our

stakeholders on pages 32 to 33; and

• the Section 172 Statement

on page96.

Furthermore, as a company

incorporated in Gibraltar, 888 Holdings

plc is not required by UK law or

regulation to prepare the Directors’

Remuneration or Strategic reports

under regulation that applies to UK

incorporated companies. However, by

virtue of 888’s Premium Listing on the

London Stock Exchange and reflecting

the Director’s approach to good

governance and investor expectation,

we have prepared these reports in line

with the requirements under the UK

Companies act 2006.

The Directors’ Remuneration Report,

set out on pages 111 to 125, has been

voluntarily prepared in accordance

with sections 420 to 422 UK Companies

act 2006.

The information given in the Strategic

Report, set out on pages 2 to 88,

has been voluntarily prepared in

accordance with section 414 UK

Companies act 2006.

RESULTS

The Group’s loss after tax is £120.6m

(2021: profit of £50.0m) is reported in

the consolidated income statement on

page 145. The Board of Directors is not

recommending a final dividend to be

paid, in light of the Group’s leverage

position following the acquisition of

William Hill and consistent with its

previous announcements.

DIRECTORS AND THEIR

INTERESTS

Biographical details of the current

Board of Directors, setting out their

relevant skills and experience and their

professional commitments, are shown

on pages 90 and 91.

The Directors who served during the

year are shown below. In line with

the UK Corporate Governance Code

and as required by the Company’s

Memorandum & Articles of Association

(“Articles”), all Directors retire at each

Annual General Meeting and those

who wish to continue to serve offer

themselves for re-election.

• Lord Mendelsohn (first appointed

23September 2020 as Chair

Designate, appointed as Chair

on 31 March 2021 and appointed

as Executive Chair on 29

January 2023).

• Itai Pazner (first appointed

8March 2019, stepped down

29January 2023).

• Yariv Dafna (first appointed

1November 2020, will step down

attheend of 2023).

• Mark Summerfield (first appointed

on 5September 2019).

• Anne de Kerckhove (first appointed

28November 2017).

• Limor Ganot (first appointed

1August2020).

• Andria Vidler (appointed

5July 2022)

• Andrea Gisle Joosen (appointed

5July2022)

• Randy Freer (appointed 5 July 2022,

stepped down 31 August 2022)

• Ori Shaked (appointed

13September2022)

The beneficial and non-beneficial

interests of the Directors and their

closely associated persons (pursuant

to Article 19 of the European Market

Abuse Regulation) in shares of the

Company are set out in the Directors’

Remuneration Report on pages 111 to

125. There has been no change in the

interests of Directors in shares of the

Company between 31 December 2022

and 31 March 2023 which is the last

practicable date prior to the release

of this Report. Except as noted above,

none of the Directors had any interests

in the shares of the Company or in any

material contract or arrangement with

the Company or any of its subsidiaries.

THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

COMPRISES PAGES 126 TO 133 OF THIS REPORT, TOGETHER WITH THE

SECTIONS OF THE ANNUAL REPORT INCORPORATED BY REFERENCE. THE

CORPORATE GOVERNANCE REPORT SET OUT ON PAGES 92 TO 97 IS

INCORPORATED BY REFERENCE INTO THIS REPORT AND, ACCORDINGLY,

SHOULD BE READ AS PART OF THIS REPORT.

888 Holdings PLC Annual Report & Accounts 2022126

GOVERNANCE

SHARE CAPITAL

Changes in share capital of the

Company during the financial year are

given in the Consolidated Statement of

Changes in Equity. As at 31 December

2022, the issued share capital of the

Company comprised 446,331,656

ordinary shares of GBP £0.005 each

(“Ordinary Shares”).

On 7 April 2022, the Company

undertook a non-pre-emptive placing

of 70.8 million new ordinary shares

of £0.005 each in the capital of the

Company, representing approximately

19% of the issued ordinary share

capital and raising £162.9m to partly

fund the acquisition of William Hill.

At the Annual General Meeting held in

June 2022, the Board was empowered

to allot securities of a value up to

66.66% of the Company’s ordinary

share capital in issue as at 30 April

2022, provided that, in accordance

with institutional guidelines issued by

the Investment Association, this would

permit up to a maximum nominal value

of £1,487,401.50 (66.66%) to be allotted

pursuant to a rights issue. Furthermore,

the Board was empowered to allot

equity securities of the Company for

cash without application of pre-emptive

rights under the Articles, provided that

such power is limited:

• to the allotment of equity securities

in connection with an offer or issue

of equity securities to or in favour

of: (i) Ordinary Shareholders where

the equity securities respectively

attributable to the interests of

all Ordinary Shareholders are

proportionate (as nearly as may

be) to the respective numbers of

Ordinary Shares held by them; and

(ii) holders of other equity securities

if this is required by the rights of

those securities, or if the Directors

consider it necessary, as permitted

by the rights of those securities; so

that the Directors may make such

exclusions or other arrangements as

they consider expedient in relation

to treasury shares, fractional

entitlements, record dates, shares

represented by depositary receipts,

legal or practical problems under

the laws in any territory or the

requirements of any relevant

regulatory body or stock exchange

or any other matter;

• to the allotment (otherwise than

pursuant to sub-paragraphs (a)

above and (c) below) of equity

securities up to an aggregate

nominal value of £111,566.27; and

• to the allotment (otherwise than

pursuant to sub-paragraphs (a)

and (b) above) of equity securities

in connection with an acquisition

or specified capital investment up

to an aggregate nominal value

of£111,566.27;

• and shall expire upon the earlier of:

(i) the conclusion of the next Annual

General Meeting of the Company

after passing the resolution, save

that the Company may before such

expiry make an offer or agreement

which would or might require equity

securities to be allotted after such

expiry and the Board may allot

equity securities in pursuance of

such an offer or agreement as if the

power conferred thereby had not

expired; and (ii) 30 June 2023.

In paragraph (c) “specified capital

investment” means one or more

specific capital investments in

respect of which sufficient information

regarding the effect of the transaction

on the Company, the assets the

subject of the transaction and (where

appropriate) the profits attributable

to those assets is made available to

shareholders to enable them to reach

an assessment of the potential return.

888 Holdings PLC Annual Report & Accounts 2022 127

GOVERNANCE

DIRECTORS’ REPORT CONTINUED

SHARE BUY BACK AUTHORITY

At the Annual General Meeting held in

June 2022, the Board was authorised

to make market purchases of up to

44,626,508 of its ordinary shares at a

minimum price per share (exclusive of

expenses) of £0.005 and a maximum

price per share (exclusive of expenses)

of the highest of 105% of the average

of the middle market quotations of

an ordinary share in the Company

as derived from the London Stock

Exchange Daily Official List for the five

business days immediately preceding

the day on which the ordinary share is

contracted to be purchased, the price

of the last independent trade of an

ordinary share, and the highest current

independent bid for an ordinary

share in the Company as derived

from the London Stock Exchange

TradingSystem.

The authority expires upon the earlier

of: (i) the conclusion of the next annual

general meeting of the Company; and

(ii) 30 June 2023, unless previously

renewed, varied or revoked by the

Company at a general meeting; and

a contract to purchase shares under

the authority may be made prior

to theexpiry of the authority, and

concluded in whole or in part after

the expiry of the authority, and the

Company may purchase its ordinary

shares in pursuance of any such

contract. In 2022, the Company did

not seek exercise any of the foregoing

powers and authorities.

RIGHTS ATTACHING TO

ORDINARY SHARES IN THE

COMPANY

The rights and obligations attaching

to ordinary shares are set out in

theArticles.

Holders of Ordinary Shares are entitled

to attend and speak at general

meetings, to appoint one or more

proxies and to exercise voting rights.

Holders of Ordinary Shares may

receive a dividend and on liquidation

may share in the Company’s assets.

Holders of Ordinary Shares are entitled

to receive the Annual Report. Subject

to meeting certain thresholds, holders

of Ordinary Shares may requisition a

general meeting or the proposal of

resolutions at general meetings.

MEMORANDUM & ARTICLES

OF ASSOCIATION

The Articles can only be amended

by a special resolution at a general

meeting of shareholders. A special

resolution to amend the Articles will be

proposed at the 2023 AGM in order

to change the Company’s UK address

stated within them.

RESTRICTIONS ON TRANSFER

OF SHARES AND LIMITATIONS

ON HOLDINGS

There are no restrictions on transfer or

limitations on the holding of Ordinary

Shares other than under restrictions

imposed by law or regulation (for

example, insider trading laws) or

pursuant to the Company’s share

dealing code.

REQUIREMENTS OF GAMING

REGULATIONS

Many jurisdictions where the Group

currently holds, or in the future may

secure a licence, require any person

who acquires beneficial ownership

of more than a certain percentage

(typically 5%, and in some cases a

smaller percentage) of the Company’s

securities, to report the acquisition to

the gaming authorities and apply for

a finding of suitability. Many gaming

authorities allow an “institutional

investor” to apply for a waiver that

allows such institutional investor to

acquire up to a certain percentage

of securities without applying for a

finding of suitability, subject to the

fulfilment of certain conditions. In some

jurisdictions, suitability investigations

may require extensive personal and

financial disclosure. The failure of any

such individuals or entities to submit

to such background checks and

provide the required disclosure could

jeopardise the Group’s eligibility for a

required licence or approval.

The criteria used by relevant regulatory

authorities to make determinations

as to suitability of an applicant for

licensure varies from jurisdiction to

jurisdiction, but generally require

the submission of detailed personal

and financial information followed

by a thorough investigation. Gaming

authorities have very broad discretion

in determining whether an applicant

(corporate or individual) qualifies for

licensing or should be found suitable.

Any person who is found unsuitable by

a relevant gaming authority may be

prohibited by applicable gaming laws

or regulations from holding, directly or

indirectly, the beneficial ownership of

any of the Company’s securities.

The Articles include provisions to

ensure that the Company has the

required powers to continue to comply

with applicable gaming regulations.

These provisions include providing

the Company, in the event of a

Shareholder Regulatory Event (as

defined in the Articles), with the

rightto:

(a) suspend certain rights of its

members who do not comply

with the provisions of the gaming

regulations (the Affected Members);

(b) require such Affected Members

todispose of their Ordinary

Shares;and

of theOrdinary Shares of such

Affected Members.

The Company considers that these

rights are required in order to mitigate

the risk that an interest in Ordinary

Shares held by a particular person

could lead to action being taken by

a relevant Regulatory Authority (as

defined in the Articles) which in turn

could lead to the withdrawal of existing

licences held by the Group or the

exclusion of being awarded further

licences in other jurisdictions that the

Group seeks to pursue. This potential

Regulatory Authority action could

therefore cause substantial damage

tothe Group’s business or prospects.

ENTITIES HOLDING COMPANY

SHARES ON BEHALF OF

GROUP EMPLOYEES

At 31 December 2022, Virtual Share

Services Limited (a wholly owned

subsidiary of the Company) held

744,410 Ordinary Shares in its

administrative capacity in connection

with the 888 Holdings plc Long Term

Incentive Plan 2015 and Deferred Share

Bonus Plan. Full details are set out on

page 189.

888 Holdings PLC Annual Report & Accounts 2022128

GOVERNANCE

SUBSTANTIAL SHAREHOLDINGS

The Company has been notified of the following interests in 5% or more of its share capital under Disclosure Guidance and

Transparency Rules (DTR) Rule 5 of the UK Financial Conduct Authority:

Principal Shareholders

Number

of shares/

applicable

financial

instruments

% issued

capital

Nature

of Holding

As at 31 December 2022

Salix Trust Company (BVI) Limited in trust on behalf ofDalia Shaked 86,283,534 19.33% Indirect

Parvus Asset Management LLP 41,448,548 9.29% Indirect

Helikon Investments 25,356,787 5.68% Indirect

Bank Leumi Le Israel BM 22,729,179 5.09% Indirect

Following 31 December 2022 and 31 March 2023 which is the latest practicable

date prior to publication of this Annual Report

Salix Trust Company (BVI) Limited in trust on behalf of Dalia Shaked 86,283,534 19.33% Indirect

Parvus Asset Management LLP 44,061,986 9.85% Indirect

Other than as stated above, between

31 December 2022 and 31 March

2023 which is the last practicable

date prior to the publication of this

Annual Report, no further notifications

were received regarding holdings

comprising 5.0% of the Company’s

issued share capital. Information

provided to the Company pursuant

to the DTRs is publicly available via

the regulatory information services

and the Company’s corporate website

corporate.888.com.

SHAREHOLDER AGREEMENTS

AND CONSENTREQUIREMENTS

There are no known arrangements

under which financial rights are held

by a person other than the holder of

the shares.

Relationship Agreement

The Company is a party to a

relationship agreement with, among

others, Salix Trust Company (BVI)

Limited as trustee for Dalia Shaked

(“DS Trust”) dated 14 September

2005 which was amended on 16 July

2015 (the “Amended Relationship

Agreement”). The O Shaked Shares

Trust and the Ben Yitzhak Family

Shares Trust (together with Dalia

Shaked Bare Trust, the “Principal

Shareholder Trusts”) are also party to

the Amended Relationship Agreement

but are no longer bound by certain

material provisions since they

are no longer shareholders of the

Company. Salix Trust Company (BVI)

Limited replaced Sinitus Nominees

Ltd as trustee for the DS Trust on

31August2022.

The Amended Relationship Agreement

includes the following provisions in

respect of the independence of the

Company (in accordance with the

UK Listing Rules) which provide that

DS Trust shall, and shall procure

as far as it is legally able, that its

respectiveassociates:

• conduct all transactions and

relationships with 888 Holdings plc

and any member of the Group on

an arm’s length basis and on a

normal commercial basis;

• not take any action which precludes

or inhibits 888 Holdings plc, or any

member of the Group, from carrying

on its business independently of it;

• not take any action that would

have the effect of preventing the

Company, or any member of the

Group, from complying with its

obligations under the UK Listing

Rules; and

• not propose or procure the proposal

of any shareholder resolution

which is intended, or appears to be

intended, to circumvent any proper

application of the UK Listing Rules.

It further provides that the DS Trust will

not solicit Group employees without

consent, that only independent

directors can vote on proposals

to further amend the Amended

Relationship Agreement, that the

DSTrust will consult the Company

prior to disposing of a significant

number of shares in order to maintain

an orderly market and shall not

disclose confidential information unless

required to do so by law or relevant

regulation or having first received the

Company’sconsent.

The Amended Relationship Agreement

also includes restrictions on the DS

Trust’s power to appoint Directors and

includes obligations on the DS Trust to

exercise its voting rights to ensure that

the majority of the Board, excluding

the Chair, is independent.

The DS Trust can nominate a non-

executive director for appointment to

the Board. In the event that this right

is exercised and it results in fewer than

half the Board (excluding the Chair

of the Board) being Independent

Directors, such appointment shall

only become effective upon the

appointment to the Board of an

additional Independent Director

acceptable to the Nominations

Committee. The DS Trust exercised this

right in July 2022 and Ori Shaked was

appointed as a non-executive director

on 13 September 2022.

Such restrictions and obligations apply

in respect of the DS Trust whilst it holds

not less than 7.5% of the issued share

capital of the Company.

The obligations of the parties to the

Amended Relationship Agreement

are at all times subject to all relevant

legal and regulatory requirements and

obligations of the parties thereto in the

United Kingdom, Gibraltar orelsewhere.

Confirmation ofindependence

The Board confirms that as of the date

of this Annual Report, and during the

entirety of 2022, the Company had

no controlling shareholder. Therefore,

no confirmation of independence

is required pursuant to UK Listing

Rule9.8.4 R (14).

Shareholders’ Agreements

There are no known Shareholders’

Agreements in force between

shareholders of the Company.

888 Holdings PLC Annual Report & Accounts 2022 129

GOVERNANCE

DIRECTORS’ REPORT CONTINUED

CHANGE OF CONTROL

A change of control in the Company

may, in the event of failure to fulfil

any applicable consent requirement,

give rise to certain revocation or

termination rights under the Group’s

gaming licences or certain contracts to

which Group companies are a party.

POLITICAL DONATIONS

In accordance with its Political

Involvement Policy which is available

on the corporate website, the Group

did not make any donations to any

political party (including any non-

EU political party) or organisation or

independent election candidate or

incur any political expenditure during

the year.

POLITICAL INVOLVEMENT AND

ANTI-CORRUPTION ACTIVITIES

The Group has a zero-tolerance

approach to bribery and corruption

and complies strictly with all relevant

laws. The Group has adopted an

Anti-Bribery Policy which applies to

all employees and is overseen by the

Board. The policy includes the Group’s

rules with regard to the giving and

receiving of gifts, business hospitality

and other payments, with particular

focus on transactions with government-

related entities and intermediaries. The

policy can be read in full on the group’s

corporate website. The Group carries

out a comprehensive due diligence

process of potential high-risk business

associates, which includes certain

government related transactions and

certain intermediaries. The Group also

clearly communicates its policy to its

suppliers and employees and carries

out staff training on the topic.

During 2022, no instances of

noncompliance with the policy

arose, and no fines, penalties or

settlements were received or entered

into in connection with bribery and

corruption matters. We have also

adopted a political involvement

policy, which is publicly available on

the corporate website. Under this

policy, we do not generally engage

in political matters other than lawful

lobbying in connection with our

business. The Group was not involved

in political matters and did not make

fiscalcontributions.

Respecting local tax regimes and

paying our fair share is a fundamental

responsibility of the Company to the

communities on which we rely. Further

information on our wider contributions

to communities is included in our

ESG and Sustainability Report. As

a Group our economic contribution

is significant, including a total tax

contribution of £588m in 2022

(2021:US$196.4 million).

FINANCIAL INSTRUMENTS

The Board considers the Group’s

exposure to financial risks as part

of its risk management strategy.

Further details can be found in the

Risk Management section of this

report on page 56. In order to finance

the acquisition of William Hill, the

Company took on significant debt.

Hedging arrangements were put in

place in order to fix around 70% of

interest costs for the next three years.

The Group is also exposed to foreign

exchange as the Group’s deposits

and revenues are generated in GBP,

EUR and other currencies, whilst the

Group’s operating expenses are largely

incurred in local currencies.

The Group has mitigated foreign

exchange risk by adopting policies to

hedge certain costs in GBP. The Group

has also entered into FX or cross

currency swaps in order to hedge part

of its ongoing USD and EUR exposure

arising due to the acquisition financing

and its ongoing EUR exposure under

outstanding notes. Forward deals are

also in place to hedge ILS against

revenue in Canadian Dollars and GBP.

The Board reviews these risks on an

ongoing basis with a view to taking

such action as required from time

to time. Further information on the

Group’s use of financial instruments

is set out in note 25 to the annual

accounts on page 185 to 187.

DIRECTORS’ INDEMNITIES

The Articles permit the Company

to indemnify its Directors in certain

circumstances, as well as to provide

insurance for the benefit of its

Directors. The Company has entered

into qualifying third-party indemnity

arrangements for the benefit of all

of its Directors in a form and scope

which comply with the requirements

of the UK Companies Act 2006 and

the Gibraltar Companies Act 2014

which were in force from 1 November

2017 (or subsequently, with respect to

subsequently appointed directors) and

remain in force.

GOING CONCERN AND

VIABILITY STATEMENTS

The going concern and viability

statements required to be included in

the annual report pursuant to the UK

Corporate Governance Code are on

pages 151 and 67 respectively, and are

incorporated in this Directors’ Report

by reference.

PRINCIPAL SUBSIDIARY

UNDERTAKINGS

The principal subsidiary undertakings

are listed on note 33

RESEARCH AND

DEVELOPMENT ACTIVITIES

Product and content leadership is

a key pillar of the Group’s growth

strategy, and as such, investment

in research and development is a

critical area of focus for the Group.

Our mission is to lead the industry

in creating the best betting and

gaming experiences, and the Group

places significant emphasis on the

development of best-in-class products.

Further details of the outputs of our

research and development activities

this year are set out on pages 24 and

25.

POST-PERIOD EVENTS

In January 2023 it was announced that

the Group’s CEO, Itai Pazner would

step down with immediate effect. Lord

Mendelsohn assumed the interim role

of Executive Chair whilst a new CEO

isrecruited.

It was also announced that the Group’s

CFO, Yariv Dafna, would step down at

the end of 2023.

In March 2023 it was announced

that following a periodic compliance

assessment of William Hill, undertaken

by the UK Gambling Commission

(“UKGC”) in July and August 2021, prior

to the company’s acquisition, William

Hill had agreed to pay a regulatory

settlement of £19.2m in relation to

historic player safety failings.

888 Holdings PLC Annual Report & Accounts 2022130

GOVERNANCE

AUDIT COMMITTEE

The Board has established an Audit

Committee. Details of the Audit

Committee’s functions, together with

its specific activities in 2022, are set

out in the Audit Committee Report

onpage102.

During the year the Company’s

Audit Committee comprised Mark

Summerfield (Chair), Independent

Non-Executive Directors Anne de

Kerckhove and Limor Ganot.

Prior to the acquisition of William Hill,

Deloitte carried out the Company’s

internal audit function, reporting to the

Audit Committee. However following

the acquisition, the William Hill internal

audit team led the internal auditing

with the assistance of Deloitte. During

2022, the internal auditor provided

twelve reports to the Audit Committee

and discussed the internal audit

working plan for 2023.

Details of the Company’s risk

management strategy and the Board’s

assessment of the Group’s viability in

light of its risks are set out on pages 58

and 67 respectively.

AUDITORS

A resolution for the reappointment of

Ernst and Young LLP and EY Limited,

Gibraltar, (together, EY), as auditors of

the Company will be proposed at the

2023 Annual General Meeting.

During the year ended 31 December 2022,

Ernst and Young LLP was reappointed

as auditor for the purposes of

the Company preparing financial

statements as required pursuant to

the UK Listing Rules and the DTRs. EY

Limited, Gibraltar, which is approved

as a registered auditor under the

Gibraltar Financial Services Act 2019, is

the statutory auditor of the Company

including for the purposes of issuing an

audit report pursuant to the Gibraltar

Companies Act 2014.

Details of audit and non-audit fees

charged by EY to the Company are

set out on page 107 of the Audit

CommitteeReport.

The Company’s audit was last

tendered for the year ended

31December 2014. In accordance

with the EU Audit Regulation and the

Competition and Markets Authority

rules, the Company is required to

run acompetitive tender process in

respect of auditor appointment no

later than 31 December 2023 year end.

As such, the intention is to run an audit

tender process in Q2 2023 for the FY

2024 audit.

RISK MANAGEMENT AND

INTERNAL CONTROL

The Board acknowledges that they are

responsible for the Company’s system

of internal control, for setting policy on

internal control and risk management,

and for reviewing the effectiveness of

internal control and risk management.

The Board monitors the Group’s

systems of internal control and risk

management on an ongoing basis,

including identifying, evaluating and

managing the significant risks faced

by the Group. The Board believes

that its risk management process

accords with the FRC Guidance on

Risk Management, Internal Control

and Related Financial and Business

Reporting and carries out an annual

review of its effectiveness covering all

material controls, including financial,

operational and compliance controls.

The annual review considers individual

risk control responsibilities, reporting

lines and qualitative assessments

of residual risks. Such a review was

carried out in respect of the processes

that were in place throughout 2022 up

until the date of approval of the Annual

Report and Accounts. No significant

failings or weaknesses were identified

in the review.

It is management’s role to implement

Board policies on risk and control,

including reporting. The system of

internal control is designed to manage

rather than eliminate the risk of failure

to achieve business objectives and

can only provide reasonable, and not

absolute, assurance against material

misstatement or loss.

The Audit Committee also reviews the

appropriateness and adequacy of

systems of internal control and risk

management in relation to the financial

reporting process on an ongoing basis

and makes recommendations to the

Board based on its findings.

The Group’s internal control and risk

management systems in relation to

the process of preparing consolidated

accounts include the following:

• Identification of significant risk and

control areas of relevance to Group-

wide accounting processes;

• Controls to monitor the consolidated

accounting process and its results

at the level of the Board and

at the level of the companies

included in the consolidated

financialstatements;

• Preventative control measures in the

finance and accounting systems of

the Company and of the companies

included in the consolidated

financial statements and in the

operative, performance-oriented

processes that generate significant

information for the preparation

of the consolidated financial

statements including the Strategic

Report, including a separation of

functions and pre-defined approval

processes in relevant areas;

• Measures that safeguard proper

IT-based processing of matters and

data relevant to accounting; and

• Reporting information of companies

around the Group which enable the

Company to prepare consolidated

financial statements including

management accounts.

The reporting structure relating to

all the companies included in the

consolidated financial statements

requires that significant risks are to be

reported immediately to the Board on

identification.

888 Holdings PLC Annual Report & Accounts 2022 131

GOVERNANCE

DIRECTORS’ REPORT CONTINUED

WHISTLEBLOWING POLICY

The Group’s whistle-blowing policy

sets out the overall responsibility

of the Board (through its Audit

Committee) for implementation of the

policy, but notes that the Board has

delegated day-to-day responsibility

for overseeing and implementing it

to the Group Internal Audit function

with additional oversight from Group

Legal and Compliance functions.

The policy was harmonised following

the acquisition of William Hill and

approved in January 2023.

The policy provides that where an

employee is not comfortable making

an identified disclosure in the standard

manner (i.e. to his/her respective direct

line manager, another manager in his/

her subsidiary, the human resources

department or the compliance

manager), disclosure can be made

anonymously through a third party,

Navex, and reporters can either

raise their case via online forms or

dedicated phone numbers.

Whilst employees are permitted

to make disclosures anonymously,

disclosing employees are encouraged

to reveal their identity to the

compliance officer in order to allow a

full and proper investigation to take

place. Where a disclosing employee’s

identity is revealed, the Group will

make its best effort, considering the

circumstances and applicable law,

to preserve confidentiality of such

disclosure. The Board commits to

investigating all disclosures fully, fairly,

quickly and, where circumstances

permit, confidentially. Undertakings

are made to employees who raise

genuinely held concerns in good faith

under the procedure that they will

not be dismissed or subject to any

discrimination or victimisation as a

result of his/her action. Employees of

the Group are regularly sent reminders

regarding the whistle-blowing policy

as part of general refreshers of various

Group policies.

REMUNERATION COMMITTEE

The Board has overall responsibility

for determining the framework of

executive remuneration and its

cost. It is required to take account

of any recommendation made by

the Remuneration Committee in

determining the remuneration, benefits

and employment packages of the

Executive Directors and Executive

Committee and the fees of the Chair.

During the year the Company’s

Remuneration Committee comprised

Independent Non-Executive Directors

Anne de Kerckhove (Chair), Mark

Summerfield, and Limor Ganot.

The Remuneration Committee

determines the Chair’s and Executive

Directors’ fees, whilst the Chair and

the Executive Directors determine

the fees paid to the Non-Executive

Directors. Further details are provided

on page92.

The Remuneration Committee was

advised during 2022 by Korn Ferry.

The remuneration consultant has no

other connection with 888 or any of the

Directors. Further details are provided

on page 118.

All new long-term incentive schemes

and significant changes to existing

long-term incentive schemes are put

to the shareholders of the Company

for approval before they are adopted

(save for certain circumstances as set

out in the Listing Rules).

The Directors’ Remuneration Report,

which outlines the Remuneration

Committee’s work and details

of Directors’ remuneration, is on

pages 111 to 125. The Remuneration

Committee’s terms of reference

are available on the Company’s

website, corporate.888.com.

COMPLIANCE WITH

STATUTORY PROVISIONS

As the Company is registered in

Gibraltar, it is subject to compliance

with Gibraltar statutory requirements.

The main corporate legislation relevant

to the Company in Gibraltar is the

Gibraltar Companies Act 2014. The

Company is in full compliance with the

Gibraltar Companies Act.

DIVIDEND POLICY

The Company’s policy, as stated in its

IPO Prospectus, is to distribute 50%

of its adjusted profit after tax each

year. On 7 April 2022 it was announced

that the Board intends to suspend

dividends until such time that net

leverage is at or below 3x.

DIRECTORS’ STATEMENT

OFRESPONSIBILITIES

The directors are responsible for

preparing the annual report and the

financial statements in accordance

with applicable Gibraltar law

andregulations.

Company law requires the directors

to prepare financial statements for

each financial year. Under that law,

the directors have elected to prepare

the group and parent company

financial statements in accordance

with UK adopted international

accounting standards in conformity

with the requirements of the Gibraltar

Companies Act 2014. Under company

law, the directors must not approve the

financial statements unless they are

satisfied that they give a true and fair

view of the state of affairs of the group

and the company and of the profit or

loss of the group and the company for

that period.

Under the Financial Conduct

Authority’s Disclosure Guidance

and Transparency Rules, group

financial statements are required to

be prepared in accordance with UK

adopted international accounting

standards.

In preparing these financial statements

the directors are required to:

• select suitable accounting

policies in accordance with IAS 8

Accounting Policies, Changes in

Accounting Estimates and Errors

and then apply them consistently;

• make judgements and accounting

estimates that are reasonable

and prudent;

• present information, including

accounting policies, in a

manner that provides relevant,

reliable, comparable and

understandableinformation;

888 Holdings PLC Annual Report & Accounts 2022132

GOVERNANCE

• provide additional disclosures

when compliance with the specific

requirements in IFRSs is insufficient

to enable users to understand the

impact of particular transactions,

other events and conditions on

the group and company financial

position and financial performance;

• in respect of the group financial

statements, state whether

international accounting standards

in conformity with the requirements

of the Gibraltar Companies Act

2014 and UK adopted international

accounting standards have been

followed, subject to any material

departures disclosed and explained

in the financial statements;

• in respect of the parent company

financial statements, state

whether UK adopted international

accounting standards in conformity

with the requirements of the

Gibraltar Companies Act 2014,

have been followed, subject to

any material departures disclosed

and explained in the financial

statements; and

• prepare the financial statements

on the going concern basis unless it

is appropriate to presume that the

company and/ or the group will not

continue in business.

The directors are responsible for

keeping adequate accounting

records that are sufficient to show

and explain the Company’s and

Group’s transactions and disclose with

reasonable accuracy at any time the

financial position of the Company and

the Group and enable them to ensure

that the company and the group

financial statements comply with the

Gibraltar Companies Act 2014. They

are also responsible for safeguarding

the assets of the Group and parent

company and for taking reasonable

steps for the prevention and detection

of fraud and other irregularities.

Under applicable law and regulations,

the directors are also responsible for

preparing a strategic report, directors’

report, directors’ remuneration

report and corporate governance

statement that comply with that law

and those regulations. The directors

are responsible for the maintenance

and integrity of the corporate and

financial information included on the

Company’swebsite.

DIRECTORS’ RESPONSIBILITY

STATEMENT (DTR 4.1)

The directors confirm, to the best of

their knowledge:

• that the consolidated financial

statements, prepared in

accordance with UK adopted

international accounting standards

in conformity with the requirements

of the Gibraltar Companies Act

2014 and UK adopted international

accounting standards give a true

and fair view of the assets, liabilities,

financial position and profit of the

parent company and undertakings

included in the consolidation taken

as a whole;

• that the annual report, including

the strategic report, includes a

fair review of the development

and performance of the business

and the position of the Company

and undertakings included in the

consolidation taken as a whole,

together with a description of the

principal risks and uncertainties that

they face; and

• that they consider the annual

report, taken as a whole, is fair,

balanced and understandable and

provides the information necessary

for shareholders to assess the

company’s position, performance,

business model and strategy.

All of the current Directors have

taken all the steps that they ought

to have taken as Directors to make

themselves aware of any information

needed by the Company’s auditors

for the purposes of their audit, and to

establish that the auditors are aware

of that information. The Directors

are not aware of any relevant audit

information of which the auditors

areunaware.

On behalf of the Board:

Lord Mendelsohn

Executive Chair

14 April 2023

888 Holdings PLC Annual Report & Accounts 2022 133

GOVERNANCE

INDEPENDENT AUDITOR’S REPORT

To the members of 888 Holdings PLC

OPINION

In our opinion:

• 888 Holdings plc’s Group Financial Statements and Parent Company Financial Statements (the “Financial Statements”)

give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2022 and of

the Group’s loss for the year then ended;

• the Group and Parent Company Financial Statements have been properly prepared in accordance with UK adopted

International Accounting Standards; and

• the Financial Statements have been prepared in accordance with the requirements of the Gibraltar Companies Act 2014

as applied in accordance with the provisions of the Gibraltar Act 2014.

We have audited the Financial Statements of 888 Holdings plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for

the year ended 31 December 2022 which comprise:

Group Parent company

Consolidated income statement for the year ended

31 December 2022

Balance sheet as at 31 December 2022

Consolidated statement of comprehensive income for

the year then ended

Statement of changes in equity for the year then ended

Consolidated balance sheet as at 31 December 2022 Statement of cash flows for the year then ended

Consolidated statement of changes in equity for the year

then ended

Related notes 1 to 10 to the financial statements including

a summary of significant accounting policies

Consolidated statement of cash flows for the year

then ended

Related notes 1 to 33 to the financial statements, including

a summary of significant accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international

accounting standards and, as regards the Group and parent company financial statements, as applied in accordance with

the provisions of the Gibraltar Companies Act 2014.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our

responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial

statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.

INDEPENDENCE

We are independent of the Group and parent in accordance with the ethical requirements that are relevant to our audit of

the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we

have fulfilled our other ethical responsibilities in accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent company

and we remain independent of the Group and the parent company in conducting the audit. We confirm that there are

appropriate safeguards in place and that we remain independent.

CONCLUSIONS RELATING TO GOING CONCERN

In accordance with the terms of our engagement letter with the Company, in auditing the financial statements, we have

concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is

appropriate. Our evaluation of the directors’ assessment of the Group and parent company’s ability to continue to adopt the

going concern basis of accounting included:

• We confirmed our understanding of 888’s going concern assessment process, including how principal and emerging risks

are considered. We understand the review controls in place for the going concern model, forecasting and management’s

Board memoranda.

• We tested the mathematical integrity of management’s going concern model, including ensuring arithmetic accuracy

and agreeing the prospective financial information to that used in other areas of the business, such as impairment

assessments. We also evaluated the potential impact of any contingencies, including the likelihood of their occurrence.

• We performed procedures to test the reasonableness of cash flow forecasts, through reconciliation to the budget

approved by the Board, comparison with recent performance and external benchmarking, as well as their consistency

with other areas of the audit including impairment assessments. We independently assessed other key assumptions,

namely the potential impact of interest rate and macroeconomic risks, the timing of settlement of provisions and accruals

and achievability of integration synergies.

888 Holdings PLC Annual Report & Accounts 2022134

FINANCIAL STATEMENTS

CONCLUSIONS RELATING TO GOING CONCERN CONTINUED

• We read the Group’s facility and syndication agreements executed during the period and re-calculated the financial

covenant relating to the Group’s revolving credit facility to ensure it remained available to the Group throughout the going

concern period.

• We searched for sources of contradictory evidence in our assessment of management’s forecasting, including assessing

recent budgeting accuracy, current trading, industry trends and the broader macroeconomic outlook.

• We considered the mitigating factors included in the cash flow forecasts. This included understanding the Group’s variable

and discretionary costs and evaluating the Group’s ability to control these outflows as mitigating actions if required. We

considered the achievability of planned synergies and any incremental costs of executing the integration.

• We performed our own assessment of plausible downside scenario focused on the timing of cash outflows not solely at

the Groups discretion. We also performed a reverse stress test in order to assess the flexibility of the business model and

identify what factors would lead to the Group utilising all liquidity during the going concern period and the probability of

such events of occurring.

• We assessed the appropriateness of the duration of the going concern assessment period and consider the existence of

any significant events or conditions beyond this period.

• We assessed the appropriateness of disclosures in the Annual Report and Accounts by comparing the disclosures against

the requirements under International Financial Reporting Standards and the UK Corporate Governance Code.

Our key observations:

• The directors’ assessment forecasts that the Group will maintain sufficient liquidity throughout the going concern

assessment period. This included the utilisation of the Group revolving credit facility, undrawn as at 31 December 2022.

• The Group is exposed to certain legal and regulatory risks, some of which will result in cash outflows during the going

concern assessment period or increase the uncertainty associated with cash inflows. However, even under adverse

scenarios described above, the directors’ assessment forecasts the Group to maintain liquidity headroom throughout the

going concern period.

• Controllable mitigating actions are available to management to increase liquidity over the going concern assessment

although, some of these actions may impact the Group’s profitability and cash generation over a longer time horizon.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the Group and parent company’s ability to continue as a going

concern for the period to 30 June 2024.

In relation to the Group and parent company’s reporting on how they have applied the UK Corporate Governance Code, we

have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about

whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant

sections of this report. However, because not all future events or conditions can be predicted, this statement is not a

guarantee as to the Group’s ability to continue as a going concern.

OVERVIEW OF OUR AUDIT APPROACH

Audit scope

• We performed an audit of the complete financial information of eight components,

and audit procedures on specific balances for a further one component.

• The components where we performed full audit procedures accounted for 96% of

Adjusted EBITDA, 99% of Revenue and 94% of Total assets.

Key audit matters

• Regulatory and legal risks

• Revenue recognition

• Acquisition accounting

• Impairment of goodwill and other assets

Materiality

• Overall Group materiality of £4.3m, which represents 2% of Adjusted EBITDA

888 Holdings PLC Annual Report & Accounts 2022 135

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT CONTINUED

To the members of 888 Holdings PLC

AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our

auditscope for each entity within the Group. Taken together, this enables us to form an opinion on the consolidated financial

statements. We take into account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls,

changes in the business environment and other factors when assessing the level of work to be performed at eachcomponent.

In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative

coverage of significant accounts in the financial statements, of the reporting components of the Group, we selected nine

components covering entities within the UK, Gibraltar, Malta and Israel, which represent the principal business units within

the Group.

Of the nine components selected, we performed an audit of the complete financial information of eight components

(“fullscope components”) which were selected based on their size or risk characteristics. For the remaining component

(“specific scope component”), we performed audit procedures on specific accounts within that component that we

considered had the potential for the greatest impact on the significant accounts in the financial statements because

of the size.

The reporting components where we performed audit procedures accounted for 96% (2021: 100%) of the Group’s Adjusted

EBITDA, 99% (2021: 100%) of the Group’s Revenue and 96% (2021: 100%) of the Group’s Total assets. For the current year,

the full scope components contributed 125% (2021: 52%) of the Group’s Adjusted EBITDA, 99% (2021: 100%) of the Group’s

Revenue and 94% (2021: 100%) of the Group’s Total assets. The specific scope component contributed EBITDA of -29%

(2021:-52%) on the basis it is a cost centre. The audit scope of this component may not have included testing of all

significant accounts of the component but will have contributed to the coverage of significant accounts tested for the Group.

Of the remaining components that together represent 4% of the Group’s Adjusted EBITDA, none are individually greater

than 2% of the Group’s Adjusted EBITDA. For these components, we performed other procedures, including analytical review,

testing of consolidation journals and intercompany eliminations and foreign currency translation recalculations to respond

toany potential risks of material misstatement to the Group financial statements.

The charts below illustrate the coverage obtained from the work performed by our audit teams.

  

96% Full & Speciﬁc

scope component

4% Other procedures

99% Full & Speciﬁc

scope component

1% Other procedures

94% Full & Speciﬁc

scope component

6% Other procedures

Adjusted

EBITDA

Revenue Total assets

Changes from the prior year

There was significant change in Group structure during the period resulting from the Group’s acquisition of William Hill

International on 1 July 2022. As a result of this acquisition, we selected additional full scope components from the William Hill

International Group, including in its Retail, UK Online and International Online businesses.

888 Holdings PLC Annual Report & Accounts 2022136

FINANCIAL STATEMENTS

Involvement with component teams

In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken

at each of the components by us, as the Group audit engagement team, or by component auditors from other EY global

network firms operating under our instruction. Of the eight full scope components, audit procedures were performed on one

of these directly by the primary audit team. For the other seven full scope components and the specific scope component,

where the work was performed by a component auditor, we determined the appropriate level of involvement to enable us to

determine that sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole.

The non-statutory audit partner has experience serving clients in a variety of public UK-listed companies, including those

withthe majority of their operations overseas. He reviewed the experience and expertise of the engagement team to ensure

that the team had the appropriate competence and capabilities, which included the use of a specialist where appropriate.

The statutory audit partner also has experience in the gaming industry and has worked on the 888 engagement for a

number of years. The team had discussions during planning and throughout the audit in respect of the evolving gaming

regulatory environment.

The Group audit team followed a programme of planned visits to the UK, Gibraltar, Malta and Israel that has been designed

to ensure that the Non-Statutory Auditor, the Statutory Auditor, and other Group partners, visited all full scope and specific

scope locations. During the current year’s audit cycle, visits were undertaken by the primary audit team to the component

teams in Gibraltar, Malta and Israel. These visits involved discussing the audit approach with the component team and any

issues arising from their work, meeting with local management and reviewing relevant audit working papers on risk areas. The

primary team interacted regularly with the component teams where appropriate during each stage of the audit, reviewed

relevant working papers and were responsible for the scope and direction of the audit process.

At critical periods of the audit, we increased the use of online collaboration tools to facilitate team meetings, information

sharing and the evaluation, review, oversight and participation in the component audit team’s planning, including its

discussion of fraud and error and was responsible for the scope and direction of the audit process. We requested more

detailed deliverables from component teams, and we utilised fully the interactive capability of EY Canvas, our global audit

workflow tool, to review remotely the relevant underlying work performed. Given the nature of our engagement, some of

these measures have been implemented in previous years, providing an appropriate base from which to expand these

forms of interactions and facilitate our oversight of the component audit team. This, together with the additional procedures

performed at Group level, gave us appropriate evidence for our opinion on the Group financial statements.

CLIMATE CHANGE

Stakeholders are increasingly interested in how climate change will impact 888 Holdings PLC. The Group has determined

that the most significant future impacts from climate change on their operations will be from energy prices as the Group

and global economy transition to greener sources. These are explained on pages 68 to 88 in the Task Force for Climate

related Financial Disclosures and on pages 61 to 66 in the principal risks and uncertainties. They have also explained their

climate commitments on pages 44 to 45. All of these disclosures form part of the “Other information,” rather than the audited

financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they

are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise

appear to be materially misstated, in line with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any

consequential material impact on its financial statements.

The Group has explained in the basis of preparation on page 150 their articulation of how climate change has been reflected

in the financial statements and how they have reflected the impact of climate change in their financial statements including

how this aligns with their commitment to achieve net zero emissions by 2035. Consideration of significant judgements and

estimates relating to climate change are included in note 1.

Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating

management’s assessment of the impact of climate risk, physical and transition, their climate commitments, the effects

ofmaterial climate risks disclosed on page 79 and 152 and the significant judgements and estimates disclosed in note 1 and

whether these have been appropriately reflected in asset values and associated disclosures where values are determined

through modelling future cash flows, being the impairment tests of the Retail, UK online, International online and US B2C cash

generating units.

We also challenged the Directors’ considerations of climate change in their assessment of going concern and viability and

associated disclosures. Based on our work we have not identified the impact of climate change on the financial statements

to be a key audit matter or to impact a key audit matter.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not

due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy,

the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in

the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate

opinion on these matters.

888 Holdings PLC Annual Report & Accounts 2022 137

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT CONTINUED

To the members of 888 Holdings PLC

RISK: REGULATORY AND LEGAL RISKS

At 31 December 2022, the Group has provided £127.5 million (2021: US$£19.0 million) in respect of ongoing legal and

regulatory matters principally in Austria, the UK and Gibraltar and a further £78.7 related to indirect taxes.

Refer to the significant accounting policies (Note 1 on page 154); and Notes 22 and 31 to the consolidated financial

statements (pages 177 and 194).

Given the industry and jurisdictions in which the Group operates there is a risk that the Group operates without the

appropriate licences, has existing licences adversely affected through the imposition of licence conditions or threat of

licence revocation, or is subject to regulatory sanctions resulting from breaches oflicence conditions. There is also a risk that

the Group does not pay or accrue for gaming taxes on an appropriate basis.

Judgement is also applied in estimating amounts payable to regulatory authorities, or customers, in certain jurisdictions.

Thisgives rise to a risk over the accuracy of accruals, provisions and disclosure of contingent liabilities and the related

income statement effect. There is also a risk that management may influence these significant estimates and judgements

inorder to meet market expectations or bonus targets.

The legal and regulatory risk increased during 2022 following the acquisition of William Hill. Refer to the Risk management

strategy (on page 58).

Our response to the risk

• We assessed the processes and controls over legal and regulatory risk from the management of legal and regulatory risks

to the evaluation of matters and the quantification and recording of a provision or disclosure of a contingent liability.

• Enquired of management and the Group’s external legal advisers, where appropriate, about any known instances of

material breaches in regulatory or licence compliance and the potential consequences of any such breach to inform

ourassessment of the Group’s disclosures and our evaluation of provisions to be recorded.

• Inspected the Group’s correspondence with regulators and tax authorities to identify any legal or regulatory concerns, to

assess the completeness of matters evaluated by the Group and to inform the likelihood of any actual or potential licence

restrictions.

• For certain matters, we engaged EY forensic accounting specialists to evaluate whether breaches identified were

indicative of pervasive process deficiencies and control failings or specific to certain markets or other factors.

• In respect of the regulatory provisions, we obtained an understanding of any updates to fact patterns through discussions

with management and the Group’s external legal advisers, read their legal confirmations and performed our own

searches for contradictory evidence. We agreed provisions to third party support, for example post year end settlement

agreements and/or confirmation from the Group’s external legal advisers that they consider the quantum of the provisions

for regulatory matters to be reasonable.

• Evaluated management’s interpretation and application of relevant laws and regulations and assessed the risks in respect

of the Group’s operations outside of regulated markets.

• Circularised confirmations to management’s relevant external legal experts to test the completeness of outstanding legal

or regulatory issues as at 31 December 2022.

• Tested the completeness of the Group’s legal expenses, in coordination with the discussions with Group’s legal advisers, to

ensure the completeness of circularised confirmations.

• Engaged EY gaming tax specialists to assist us in understanding the risks in respect of gaming duties and fines in

jurisdictions where the appropriate tax treatment is uncertain.

• Assessed appropriateness of disclosures in note 22 and 31 of the consolidated financial statements by comparing the

disclosures against the requirements under UK adopted international accounting standards.

Key observations communicated to the Audit Committee

Based on our audit procedures on the Group’s accounting conclusions in each of its major jurisdictions, we concluded that

the provision and accruals in respect of probable amounts payable to regulatory authorities, and related income statement

accounts, are appropriate and that the disclosures of probable and possible outflows in the financial statements meet the

requirements of IAS 37.

RISK: REVENUE RECOGNITION

The Group recognised revenue of 1,238.8 million in 2022 (2021: £712.3 million).

The Group’s revenue recognition process for all revenue streams is highly dependent on the Group’s complex gaming systems

and gaming servers, which process a high volume of transactions. Systematic errors in calculations in aggregate could result

in incorrect reporting of revenue.

There is a risk that management may override operational controls in respect of revenue recognition leading to revenue

being materially different to cash receipts or overstated in order to meet market expectations.

888 Holdings PLC Annual Report & Accounts 2022138

FINANCIAL STATEMENTS

RISK: REVENUE RECOGNITION CONTINUED

The acquisition of William Hill increases revenue recognition risk as the Group operates new and unintegrated gaming

systems and for the first time Licenced Betting Offices.

Refer to the significant accounting policies (Note 1 on pages 154 and 155); and Note 2 to the Consolidated Financial

Statements (page 162).

Our response to the risk

• Enquired about the Group’s processes and related controls in respect of revenue recognition and obtained support to

confirm our understanding. We understood the IT general control environment and based on that understanding tested

the design and operating effectiveness of certain applications that we considered to be supportive of a control reliance

approach. We also tested certain manual controls over data from the Group’s principal gaming systems.

• We performed a correlation analysis between revenue and cash receipts and revenue to confirm that in aggregate, the

revenues recognised were equivalent to the cash receipts adjusted for known timing differences.

• We applied IT-based auditing techniques to re-perform manual reconciliations between the Group’s gaming revenue and

cash and for online revenues the customer accounts.

• We performed transaction testing for each revenue stream to test the interface between gaming servers, production

systems and cash processing system with the Datawarehouse.

• We performed detailed substantive testing on a sample of revenue transactions, including validation of bets/wins,

deposits/withdrawals and aggregated cash receipts from PSPs and shops.

• We performed computer assisted audit techniques to search for other material manual adjustments to revenue and

audited the fair value of bet positions.

• We assessed the appropriateness of the disclosures in note 1 and 2 of the consolidated financial statements by comparing

the disclosures against the requirements under UK adopted international accounting standards.

Key observations communicated to the Audit Committee

Based on our audit work we conclude that the revenue recognised is appropriate and in accordance with IFRS 9 and IFRS 15.

RISK: ACQUISITION ACCOUNTING

The Group recorded net liabilities on the William Hill acquisition of £225.9 million, resulting in goodwill of £780.2 million.

The valuation of intangible assets involves significant judgement as it requires management’s use of assumptions including

revenue growth, theoretical royalty rates used to value trade names, customer churn rates and the application of a discount

rate that is reflective of the risks of the business.

Other fair value adjustments, including those for provisions and contingent consideration, involve a high degree of judgement.

Refer to the significant accounting policies (Note 1 on page 153); and Note 16 to the Consolidated Financial Statements

(page 174).

Our response to the risk

• We enquired about the Group’s processes and related controls to confirm our understanding of how the Group ensures the

completeness and accuracy of data and assumptions used to develop the fair value estimates.

• For specialists engaged by management , we evaluated their competence, capabilities and objectivity. With assistance

from our valuation specialists, we read their valuation report and identified corroborating or contradictory evidence to

challenge the fair value estimates.

• We obtained management’s specialist’s valuation report and underlying models. We challenged the assumptions used by

management, with input from our valuation specialists, by comparing to board approved budgets, historically observed

inputs and third party sources, particularly in respect of forecast growth rates and searched for internal and external

information that may be contrary to management’s assessment.

• With assistance from our valuation specialists, for each individual asset identified, we evaluated the appropriateness of

the valuation methodology applied.

• We performed sensitivity analysis, including on key inputs such as short-term and long-term growth rates and the

discount rate. In doing so, we developed our own independent valuation range using our valuation specialist-determined

discount rates.

• We continued to search for contradictory information identified in the post-acquisition period, remaining alert to events,

transactions and the results of our enquiries of management which may contradict the key assumptions / judgements and

the value of assets recorded.

• We assessed the appropriateness of the disclosures in note 1 and 16 of the consolidated financial statements by

comparing the disclosures against the requirements under UK adopted international accounting standards.

888 Holdings PLC Annual Report & Accounts 2022 139

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT CONTINUED

To the members of 888 Holdings PLC

RISK: ACQUISITION ACCOUNTING CONTINUED

Key observations communicated to the Audit Committee

Based on our audit procedures in relation to the purchase price allocation, including our own independently developed

range, we concluded that assets, including tangible and intangible assets and the resulting goodwill, have been appropriately

identified, valued and recorded. The disclosures in the financial statements are in accordance with IFRS 3.

RISK: IMPAIRMENT OF GOODWILL AND OTHER LIFE-LONG ASSETS

The Group had goodwill of £780.2 million relating to US B2C and the acquisition of William Hill £25.7 million; long-life assets

acquired as part of the William Hill acquisition include customer relationships, brand names and gaming licences.

The recoverable amount and headroom/impairment on the Group’s CGUs and groups of CGUs tested for impairment are

disclosed in note 12.

There is a risk that these assets are not supported by either the future cash flows they are expected to generate or their fair

value less costs of disposal, resulting in an impairment charge that has not been recognised by management. In respect of

US B2C there is a risk that the forecast growth rates are not achievable.

Judgement is also required in determining the cash generating units to which the goodwill is allocated.

Refer to the significant accounting policies (Note 1 on page 153); and Note 12 to the Consolidated Financial Statements

(pages 170 to 172).

Our response to the risk

• We enquired about the Group’s processes and related controls to confirm our understanding of how the Group ensures the

completeness and accuracy of data and assumptions used in the impairment assessments.

• We reviewed management’s assessments of indicators of impairment. Where identified, this informed our audit of

management’s impairment tests, by comparing indicators identified with other information obtained during our audit and

enquired further in cases where the performance of certain products was below management’s and external expectations.

• We evaluated whether CGU identification and allocation of goodwill is appropriate based on our understanding of the

business and the requirements of applicable accounting standards.

• We compared model inputs to current trading conditions, board approved forecasts, consistency with the key assumptions

applied in the valuation of acquired intangible asset as part of the purchase price allocation exercise for the William Hill

acquisition and searched for external information that may be contrary to management’s assessment.

• We involved valuation specialists to assess the discount rates used in each value-in-use calculation by performing an

independent calculation of a range of acceptable discount rates and comparing this with the rate utilised bythe Group.

• We evaluated the assumptions used by management by comparing to board approved budgets, external data sources

and/or historically observed inputs, particularly in respect of forecast growth rates.

• We performed sensitivity analysis including on key inputs such as short-term and long-term growth rates and the discount

rate and in doing so developed our own independent valuation range using EY specialist determined discount rates.

• We assessed the appropriateness of the disclosures in note 1 and 12 of the consolidated financial statements by

comparing the disclosures against the requirements under UK adopted international accounting standards.

Key observations communicated to the Audit Committee

Based on our audit work, including our own independently developed range and the sensitivities applied, we are satisfied

that that no impairment is required in respect of the Retail, UK online or international online Groups of CGUs as at

31December 2022.

An impairment charge of £25.7 million was appropriately recorded on the US B2C CGU following an increase in market rates

and a change in Group strategy.

An impairment charge of £2.6 million was appropriately recorded over the assets of specific retail shops and a further

£28.0m inrelation to tech assets made obsolete by the integration of 888 and William Hill.

An impairment charge of £25.7 million was appropriately recorded on the US B2C CGU following an increase in market rates

and a change in Group strategy.

An impairment charge of £11.2 million also resulted from the sale of Bingo assets be-low their carrying value, in line with the

dis-closure in the prior year annual report and accounts.

The disclosures in the financial statements are in accordance with IAS 36.

In the current year, we have identified one new key audit matter. Acquisition accounting was identified as a key audit matter

due to the scale of the acquisition of the William Hill business during 2022 and the associated judgements and estimates.

888 Holdings PLC Annual Report & Accounts 2022140

FINANCIAL STATEMENTS

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements

on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to

influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the

nature and extent of our audit procedures.

We determined materiality for the Group to be £4.3 million (2021: £4.2 million), which is 2% of Adjusted EBITDA (2021: 5% of

adjusted profit before tax). We believe that Adjusted EBITDA provides us with the most relevant performance measure to

the stakeholders of the Group. This reflects a change from the previous year audit where we used adjusted profit before

tax. The reason for the change in the materiality basis used is that the Group was lossmaking in the reporting period post

the acquisition of William Hill greatly and therefore the use of adjusted profit before tax as the materiality basis was no

longer appropriate. We determined that another earnings-based measure would be appropriate and following a review of

the Group’s KPIs, we identified that Adjusted EBITDA was the most relevant performance measure to the stakeholders of

the Group.

We determined materiality for the Parent Company to be £5.2 million (2021: £1.78 million), which is 2% (2021: 2%) of Equity.

During the course of our audit, we reassessed our initial materiality of £4.4m. We revised materiality downwards ahead of our

year end fieldwork to reflect the actual reported performance during the year.

• Adjusted EBITDA of £217.9 million

• Share benefit charges of £5.2 million

• Foreign exchange losses of £4.0 million

• Totals £208.7 million (Adjusted EBITDA)

• Materiality of £4.3 million (2021: £4.2 million), representing 2%

of Adjusted EBITDA

Starting

basis

Adjustments

Materiality

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately

low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement

was that performance materiality was 50% (2021: 75%) of our planning materiality, namely £2.1 million (2021: £3.1 million).

We have set performance materiality at this lower percentage due to the acquisition of William Hill resulting in a significant

change to the scale of the business, associated changes in management and our lack of previous experience with the

William Hill components, which we audited for the first time in 2022, meaning that we could not form an expectation that

there would be a low level of misstatements at the Group level.

Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement

accounts is undertaken based on a percentage of total performance materiality. The performance materiality set for each

component is based on the relative scale and risk of the component to the Group as a whole and our assessment of the risk

of misstatement at that component. In the current year, the range of performance materiality allocated to components was

£0.4m to £1.4m (2021: £1.4m).

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £213,000

(2021: £208,000), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in

light of other relevant qualitative considerations in forming our opinion.

888 Holdings PLC Annual Report & Accounts 2022 141

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT CONTINUED

To the members of 888 Holdings PLC

OTHER INFORMATION

The other information comprises the information included in the annual report set out on pages 1 to 133, including Strategic

Report, the Directors’ Report and the Corporate Governance Report set out on pages 92 to 97, other than the financial

statements and our auditor’s report thereon. The directors are responsible for the other information contained within the

annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly

stated in this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be

materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to

determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work

we have performed, we conclude that there is a material misstatement of the other information, we are required to report

that fact.

We have nothing to report in this regard.

OPINION ON OTHER MATTER PRESCRIBED BY THE GIBRALTAR COMPANIES ACT 2014

In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are

prepared is consistent with the financial statements and has been properly prepared in accordance with the Act.

OPINIONS ON OTHER MATTERS IN ACCORDANCE WITH THE TERMS OF OUR ENGAGEMENT LETTER

WITH THE COMPANY

In our opinion, based on the work undertaken in the course of the audit:

• the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the basis

ofpreparation.

• the information given in the strategic report for the financial year for which the financial statements are prepared

is consistent with the financial statements and those reports have been prepared in accordance with the basis

ofpreparation;

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION AS PRESCRIBED BY THE

GIBRALTAR COMPANIES ACT 2014

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the

course of the audit, to report by exception whether we have identified material misstatements in the Directors’ Report

We have nothing to report in respect of the following matters where the Gibraltar Companies Act 2014 requires us to report to

you if, in our opinion we have not received all the information and explanations we require for our audit.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION IN ACCORDANCE WITH THE

TERMS OF OUR ENGAGEMENT LETTER WITH THE COMPANY

In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the

course of the audit, we have not identified material misstatements in strategic report.:

We have nothing to report in respect of the following matters if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not

been received from branches not visited by us; or

• the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made.

888 Holdings PLC Annual Report & Accounts 2022142

FINANCIAL STATEMENTS

CORPORATE GOVERNANCE STATEMENT

The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that

part of the Corporate Governance Statement relating to the Group and company’s compliance with the provisions of the UK

Corporate Governance Code specified for our review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any

material uncertainties identified set out on page 130;

• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the

period is appropriate set out on page 67;

• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and

meets its liabilities set out on pages 67 and 130;

• Directors’ statement on fair, balanced and understandable set out on page 133;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 131;

• The section of the annual report that describes the review of effectiveness of risk management and internal control

systems set out on page 105; and;

• The section describing the work of the audit committee set out on page 102

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the directors’ responsibilities statement set out on page 132, the directors are responsible for the

preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal

control as the directors determine is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group and parent company’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have

no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with

our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement

due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,

for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable

of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance

of the company and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined

that the most significant are those related to gambling regulations and related gaming and indirect taxes in different

countries where the Group is operating, including the UK, Spain, Gibraltar, Malta, Austria and other countries, those related

to relevant tax compliance regulations in the UK, Gibraltar, Malta, Spain and Israel and related to the financial reporting

framework (UK adopted international accounting standards, UK Corporate Governance Code, Gibraltar Companies Act

2014 the Listing Rules of the London Stock Exchange and the Bribery Act 2010).

• We understood how 888 Holdings plc is complying with those frameworks by making enquiries of management and the

company’s external legal and tax advisers. We corroborated our enquiries through our review of board minutes, discussion

with the Audit Committee and any correspondence with regulatory bodies and tax authorities, and our audit procedures in

respect of “Regulatory and legal risk” (as described above).

888 Holdings PLC Annual Report & Accounts 2022 143

FINANCIAL STATEMENTS

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS CONTINUED

Explanation as to what extent the audit was considered capable of detecting irregularities, including

fraud

continued

• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might

occur by meeting with management to understand where they considered there was susceptibility to fraud, including

in respect of revenue recognition. We also considered performance targets and their influence on efforts made by

management to manage earnings or influence the perceptions of analysts. Where this risk was considered to be higher,

we performed audit procedures to address each identified fraud risk. These procedures included testing journal entries.

• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations,

including anti-money laundering. The Group operates in the gaming industry which is a highly regulated environment and

our procedures involved audit procedures in respect of “Regulatory and legal risk” (as described above), as well as review

of board minutes to identify non-compliance with such laws and regulations, review of reporting to the Audit Committee on

compliance with regulations and enquiries of management and the Group’s local legal counsel and tax advisers.

• In respect to the UK, Gibraltar, Malta and Israel component teams, any instances of non-compliance with laws and

regulations were communicated to the Primary team as they arose and were followed up with management by the

Primary team.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

OTHER MATTERS WE ARE REQUIRED TO ADDRESS

• We were appointed by the company on 30 June 2014 to audit the financial statements for the year ending 31 December

2014 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and

reappointments is 9 years, covering the years ending 31 December 2014 to 31 December 2022. Our audit engagement

letter was refreshed on 12 April 2023. The non-audit services prohibited by the FRC’s Ethical Standard were not provided

to the Group or the parent company and we remain independent of the Group and the parent company in conducting

the audit.

• The audit opinion is consistent with the additional report to the Audit Committee.

USE OF OUR REPORT

This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with

Section 257 of the Gibraltar Companies Act 2014 and our engagement letter dated 12 April 2023 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom

this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Marcus Butler (Non-Statutory Auditor) Angelique Linares (Statutory Auditor)

For and on behalf of Ernst & Young LLP, London For and on behalf of EY Limited, Registered Auditors, Gibraltar

14 April 2023 14 April 2023

INDEPENDENT AUDITOR’S REPORT CONTINUED

To the members of 888 Holdings PLC

888 Holdings PLC Annual Report & Accounts 2022144

FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2022

Note

2022

£ million

2021

£ million

Revenue 2 1,23 8.8 7 12. 3

Gaming duties (256 .3) (133. 7)

Other cost of sales (1 8 8 .1) (1 15.3)

Exceptional items – cost of sales 3 3 .9 (4 . 2)

Cost of sales (4 4 0 . 5) (25 3 . 2)

Gross profit 798 . 3 459 .1

Marketing expenses (2 5 7. 8) (222.6)

Operating expenses (4 4 8 . 5) (16 0. 2)

Share of post-tax profit of equity accounted associate 4,14 0.3 —

Exceptional items – operating expenses 3 (9 7. 1) (13 .1)

Operating (loss)/profit 5 (4 . 8) 63 .2

Adjusted EBITDA

2 1 7. 9 1 1 9.7

Exceptional items – cost of sales and operating expenses 3 (93 . 2) (1 7. 3)

Foreign exchange (4 . 0) (6 . 7)

Share benefit charge 28 (5. 2) (6 . 1)

Depreciation and amortisation 12,13 (120.3) (26 . 4)

Operating (loss)/profit 5 (4 . 8) 63 .2

Finance income 7 0. 8 —

Finance expenses 8 (111.7) (4 . 2)

(Loss)/profit before tax (11 5.7) 59. 0

Taxation 9 (4 . 9) (9.0)

(Loss)/profit after tax (1 2 0 . 6) 50.0

Adjusted profit after tax

64. 2 82.6

Exceptional items – cost of sales and operating expenses 3 (93 . 2) (1 7. 3)

Exceptional items – finance expenses 3,8 (7. 0) —

Amortisation of finance fees (7. 4) —

Amortisation of acquired intangibles (56 .7) —

Tax on exceptional items 11 .4 (2 .5)

Foreign exchange (26.7) (6 . 7)

Share benefit charge 28 (5. 2) (6 . 1)

(Loss)/profit after tax (1 2 0 . 6) 50.0

Attributable to equity holders of the parent (1 20. 5) 4 9.9

Attributable to non-controlling interests (0. 1) 0 .1

(Loss)/earnings per share

Basic (pence) 10 (2 8. 3) 13.4

Diluted (pence) 10 (2 8. 3) 13. 2

1. Adjusted EBITDA and adjusted profit after tax are Alternative Performance Measures (“APMs”) which do not have an IFRS standardised meaning. The Group

presents these two measures since they are the main measures the analyst community uses to evaluate the Group and compare it to its peers. The Group presents

adjusted measures because it allows for a further understanding of the underlying financial performance of the Group.

888 Holdings PLC Annual Report & Accounts 2022 145

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2022

Note

2022

£ million

2021

£ million

(Loss)/profit for the year (12 0 . 6) 50.0

Items that may be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations 2.5 1. 3

Items that will not be reclassified to profit or loss

Remeasurement of severance pay liability 6 1 .7 2.2

Actuarial remeasurement in defined benefit pension scheme 29 (0. 8) —

Tax on severance pay liability 0.6 —

Movement in cash flow hedging position 25 (14 . 4) —

Movement in cost of hedging reserve 25 1.0 —

Movement in equity investment designated at fair value through OCI 15 (1 .0) —

Total other comprehensive (loss)/income for the year (10. 4) 3.5

Total comprehensive (loss)/income for the year attributable to equity holders ofthe parent (13 0.9) 53 .4

Total comprehensive (loss)/income for the year attributable to non-controlling interests (0 .1) 0 .1

The notes on pages 150 to 199 form part of these consolidated financial statements.

888 Holdings PLC Annual Report & Accounts 2022146

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2022

Note

2022

£ million

2021

£ million

Assets

Non-current assets

Goodwill and other intangible assets 12 2 , 1 9 7. 0 1 2 3 .9

Right-of-use assets 13 8 1 .9 1 8.7

Property, plant and equipment 13 110 .4 9. 3

Investment in sublease 1.4 —

Investment in associates 14, 15 38.4 —

Non-current prepayments 19 6. 2 5.8

Derivative financial instruments 25 16.6 —

Deferred tax assets 26 5.2 2. 2

2 , 4 5 7. 1 1 5 9.9

Current assets

Cash and cash equivalents

20 3 1 7. 6 189.4

Trade and other receivables 19 132 .7 50. 8

Income tax receivable 35. 2 —

Derivative financial instruments 25 2 .0 —

Assets held for sale 17 6.9 —

494 . 4 24 0. 2

Total assets 2 ,9 51 . 5 400 .1

Equity and liabilities

Equity attributable to equity holders of the parent

Share capital 27 2 .2 1 .9

Share premium 27 160.7 2.5

Treasury shares (0 .9) (0 .9)

Foreign currency translation reserve 24.6 2 2 .1

Hedging reserves 25 (13 . 4) —

Retained earnings (14 . 0) 98 .8

Total equity attributable to equity holders of the parent 1 5 9. 2 1 24 .4

Non-controlling interests — 0 .1

Total equity 1 5 9. 2 1 24 . 5

Liabilities

Non-current liabilities

Borrowings 23 1 , 6 9 7. 5 —

Severance pay liability 6 1.2 3.7

Retirement benefit liability 29 1.2 —

Provisions 22 86. 2 —

Deferred tax liability 26 22 0.4 1 .9

Derivative financial instruments 25 1 7. 4 —

Lease liabilities 18 65 .0 18 .1

2 , 0 8 8 .9 2 3.7

Current liabilities

Borrowings 23 4.8 —

Trade and other payables 21 3 68 .0 145 . 3

Provisions 22 111. 5 19. 0

Derivative financial instruments 25 2 0.8 —

Income tax payable 9 33.0 2 2.7

Lease liabilities 18 24 .0 4.8

Customer deposits 21 1 41. 3 6 0.1

703 . 4 2 5 1 .9

Total equity and liabilities 2 ,9 51 . 5 400 .1

1. Cash and cash equivalents includes customer funds which represent bank deposits matched by customer liabilities of an equal value. Cash and cash equivalents

excludes restricted short-term deposits of £21.6 million which are presented in Trade and other receivables (31 December 2021: £7 .0 million).

The consolidated financial statements on pages 145 to 149 were approved and authorised for issue by the Board of Directors

on 14 April 2023 and were signed on its behalf by:

Yariv Dafna

Chief Financial Officer

The notes on pages 150 to 199 form part of these consolidated financial statements.

Lord Mendelsohn

Executive Chair

888 Holdings PLC Annual Report & Accounts 2022 147

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022

capital

£ million

premium

£ million

Treasury

£ million

Foreign

currency

translation

reserve

£ million

Hedging

reserve

£ million

Cost of

hedging

reserve

£ million

Retained

earnings

£ million

Non-

controlling

interests

£ million

Total

£ million

Balance at 1 January 2021 1 .9 2.5 (0 .4) 20. 8 — — 85. 5 — 11 0.3

Profit after tax for the year — — — — — — 4 9.9 0.1 5 0.0

Other comprehensive expense

forthe year — — — 1. 3 — — 2. 2 — 3.5

Total comprehensive income — — — 1.3 — — 52 .1 0.1 53. 5

Dividend paid (note 11) — — — — — — (4 3 . 8) — (4 3 . 8)

Equity settled share benefit

charges (note 28) — — — — — — 5.2 — 5.2

Acquisition of treasury shares — — (0 . 7) — — — — — (0 . 7)

Exercise of deferred share

bonusplan — — 0. 2 — — — (0 . 2) — —

Balance at 31 December 2021 1 .9 2 .5 (0 .9) 22 .1 — — 98 .8 0.1 124 .5

Loss after tax for the year — — — — — — (120. 5) (0 .1) (1 2 0 . 6)

Other comprehensive income/

(expense) for the year — — — 2.5 (14 . 4) 1.0 0. 5 — (1 0. 4)

Total comprehensive income/

(expense) — — — 2 .5 (14 .4) 1 .0 (120.0) (0 .1) (1 31 .0)

Issue of shares (equity placing) 0.3 158 . 2 — — — — — — 158 .5

Equity settled share benefit

charges (note 28) — — — — — — 7. 9 — 7. 9

Acquisition of treasury shares — — (0 . 7) — — — — — (0 . 7)

Exercise of deferred share

bonusplan — — 0.7 — — — (0 .7) — —

Balance at 31 December 2022 2 .2 160 .7 (0 .9) 24 .6 (14 . 4) 1.0 (1 4 .0) — 1 5 9. 2

The following describes the nature and purpose of each reserve within equity.

Share capital – represents the nominal value of shares allotted, called-up and fully paid.

Share premium – represents the amount subscribed for share capital in excess of nominal value.

Treasury shares – represent reacquired own equity instruments. Treasury shares are recognised at cost and deducted

from equity.

Foreign currency translation reserve – represents exchange differences arising from the translation of all Group entities that

have functional currency different from £.

Hedging reserves – represents changes in the fair value of derivative financial instruments designed in a hedging relationship.

Retained earnings – represents the cumulative net gains and losses recognised in the consolidated statement of

comprehensive income and other transactions with equity holders.

The notes on pages 150 to 199 form part of these consolidated financial statements.

888 Holdings PLC Annual Report & Accounts 2022148

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2022

Note

2022

£ million

2021

£ million

Cash flows from operating activities

(Loss)/profit before income tax (11 5.7) 59. 0

Adjustments for:

Depreciation of property plant and equipment and right-of-use assets 13 3 0.8 10. 3

Amortisation 12 8 9. 5 16 .1

Interest income 7 (0. 8) —

Interest expenses 8 111 .7 4.2

Income tax paid (3 5 .1) (5 .1)

Share of post-tax loss of equity accounted associate (0. 3) —

Non-cash exceptional items 52 . 3 7. 4

Movement on Ante-post and other financial derivatives 2.3 —

Loss on disposal of property, plant and equipment (0 . 3) —

Share benefit charges 28 5.2 6 .1

Cash generated from operating activities before working capital movement 1 3 9. 6 98 .0

Increase in receivables (50. 3) (1 6 .9)

(Decrease)/increase in customer deposits (9. 2) 4 .7

(Decrease)/increase in trade and other payables (100. 3) 6 .1

(Decrease)/increase in provisions (10 .0) 4 .7

Net cash (used in)/generated from operating activities (30. 2) 96 . 6

Cash flows from investing activities

Acquisition of property, plant and equipment 13 (8 .9) (4 . 2)

Acquisition of William Hill (net of cash acquired) 16 (3 86. 8) —

Proceeds from sale of investment in Bingo 16 32 . 5 —

Proceeds from sale of property, plant and equipment 0.5 —

Interest received 7 0. 8 —

Acquisition of intangible assets (2 .4) (1. 7)

Internally generated intangible assets (6 5 . 5) (1 7. 1)

Dividend received from associate 14 0.9 —

Net cash used in investing activities (4 2 8 .9) (2 3 . 0)

Cash flows from financing activities

Issue of shares – equity placing 27 15 8. 5 —

Payment of lease liabilities 18 (2 1. 5) (5 . 2)

Interest paid (75 . 6) (0 . 5)

Proceeds from loans 23 2 ,1 63 .1 —

Loan transaction fees 23 (132 . 3) —

Repayment of loans 23 (1, 503 . 2) —

Acquisition of treasury shares (0 .7) (0 . 8)

Dividends paid 11 — (4 3 . 8)

Net cash generated from/(used in) financing activities 588 .3 (50. 3)

Net Increase in cash and cash equivalents 1 2 9. 2 23. 3

Net foreign exchange difference (1 .0) 3 .1

Cash and cash equivalents at the beginning of the year 20 1 8 9. 4 163 .0

Cash and cash equivalents at the end of the year 20 3 1 7. 6 189.4

The notes on pages 150 to 199 form part of these consolidated financial statements.

888 Holdings PLC Annual Report & Accounts 2022 149

FINANCIAL STATEMENTS

GENERAL INFORMATION

Company description

888 Holdings PLC (the “Company”) and its subsidiaries (together the “Group”) was founded in 1997 in the British Virgin Islands

and since 17 December 2003 has been domiciled in Gibraltar (Company number 90099). On 4 October 2005, the Company

listed on the London Stock Exchange.

DEFINITIONS

In these financial statements:

The Company 888 Holdings PLC

The Group 888 Holdings PLC and its subsidiaries.

Subsidiaries Companies over which the Company has control (as defined in IFRS 10 – Consolidated Financial

Statements) and whose accounts are consolidated with those of the Company.

Related parties As defined in IAS 24 ‘Related Party Disclosures’

Associates As defined in IAS 28 ‘Investments in Associates and Joint Ventures’

1 ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of the consolidated financial statements are as follows:

Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with UK adopted international

accounting standards in accordance with the requirements of the Gibraltar Companies Act 2014. The consolidated financial

statements have been prepared on a historical cost basis, except where certain assets or liabilities are held at amortised

cost or at fair value as described in the Group’s accounting policies.

All values are rounded to the closest hundred thousand, except when otherwise indicated.

The significant accounting policies applied in the consolidated financial statements in the prior year have been applied

consistently in these consolidated financial statements, except for the amendments to accounting standards effective for

the annual periods beginning on 1 January 2022 and representation of expenses analysis in the income statement. These

are described in more detail below.

As a company incorporated in Gibraltar, 888 Holdings plc is not required by UK law or regulation to prepare the Directors’

Remuneration or Strategic reports under regulation that applies to UK incorporated companies. However, by virtue of 888’s

Premium Listing on the London Stock Exchange and reflecting the Director’s approach to good governance and investor

expectation, we have prepared these reports in line with the requirements under the UK Companies act 2006.

The Directors’ Remuneration Report, set out on pages 111 to 125, has been voluntarily prepared in accordance with sections 420

to 422 UK Companies act 2006.

The information given in the Strategic Report, set out on pages 2 to 88, has been voluntarily prepared in accordance with

section 414 UK Companies act 2006.

Change in presentation currency of the Group

The Group has changed the currency in which it presents its financial results from US Dollar to Pound sterling (GBP)

with effect from 1 January 2022, in consideration of the William Hill acquisition and current business mix which now has

significantly higher GBP exposure. 888 US dollar denominated earnings, are a relatively lower proportion of overall earnings.

Given the current composition of the Group’s activities, this change is expected to reduce the impact of currency movements on

reported results. Accordingly, to satisfy the requirements of IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’, the reported

results for the year ended 31 December 2022 have been translated from US Dollar to GBP using the following procedures:

• Assets and liabilities denominated in non-GBP currencies were translated into GBP at the relevant closing rates

of exchange;

• The trading results of subsidiaries whose functional currency was other than GBP were translated into GBP at the relevant

average rates of exchange;

• Movements in other reserves were translated into GBP at the relevant average rates of exchange;

• Share capital, share premium, treasury shares/own shares and dividends were translated at the historic rates prevailing on

the date of each transaction; and

• The cumulative translation reserve was set to nil at 1 January 2004, being the earliest practicable date and the date of

transition to IFRS, and has been restated on the basis that the Group had reported in GBP since that date.

The opening balance sheet and all comparatives have been re-presented in GBP following the change in presentation currency.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

888 Holdings PLC Annual Report & Accounts 2022150

FINANCIAL STATEMENTS

1 ACCOUNTING POLICIES CONTINUED

Going concern

Background

The financial statements have been prepared using the going concern basis of accounting. As at the year end the Group

had net assets of £159.2m (31 December 2021: £124.5m) and incurred a statutory loss before tax of £115.7m during the year

(31 December 2021: £59.0m profit). The Group also had net current liabilities of £209.0m (31 December 2021: £11.7m).

A full description of the Group’s business activities, financial position, cash flows, liquidity position, committed facilities

and borrowing position, together with the factors likely to affect its future development and performance, is set out in the

Strategic Report on pages 2 to 88, and in notes 23 to 25 to these financial statements.

Business planning and performance management

Following the acquisition of William Hill, the Group has developed its forecasting and monitoring processes to reflect the

combined group and the new reporting structure. These consists of weekly monitoring and careful management of liquidity,

an annual budget and a long-term plan, which generates income statement and cash flow projections for assessment by

management and the Board. Forecasts are regularly compared with prior forecasts and current trading to identify variances

and understand their future impact so management can take action where appropriate. Analysis is undertaken to review and

sense check the key assumptions, including the integration and transformation programmes, underpinning the forecasts.

Whilst there are risks to the Group’s trading performance (as summarised in the Risks section of the Strategic Report on

pages 56 to 66), the Group has established risk management processes to identify and mitigate risks, and such risks have

been considered when undertaking the going concern evaluation for the period to 30 June 2024.

The Group’s future prospects

As highlighted in note 24 to the financial statements, the Group meets its day-to-day working capital requirements from

the positive cash flows generated by its trading activities and its available cash resources. The Group holds cash and cash

equivalents excluding customer balances and restricted cash of £176.3m as at 31 December 2022 (31 December 2021: £129.3m).

In addition to this the Group has access, until 31 December 2027, to a £150m Revolving Credit Facility which is currently undrawn.

The Group entered into significant debt arrangements within the year to fund the acquisition of the William Hill business (also

described in note 24). Other than an annual £4.8m repayment on the TLB facility, no borrowings are due within the period of

the going concern evaluation or in the period soon after it. The next due date on the Group’s debt is in 2026 and the majority is

repayable in 2027-28. The Group’s Revolving Credit Facility contains a Net Leverage covenant which is not restrictive in the base

case, downside or reverse stress test scenarios. The remainder of the Group’s debt does not contain any financial covenants.

The Group’s forecasts, for the going concern evaluation period to 30 June 2024, based on reasonable assumptions including,

in the base case, a 3% decline in 2023 revenue on a pro forma basis and lower than expected EBITDA synergies in 2023,

indicate that the Group will be able to operate within the level of its currently available and expected future facilities for

this period to 30 June 2024. Under the base case forecast, the Group has sufficient cash reserves and available facilities to

enable it to meet its obligations as they fall due, for this going concern evaluation period to 30 June 2024.

The Group has also assessed a range of downside scenarios to evaluate whether any material uncertainty exists relating to

the Group’s ability to continue as a going concern. The forecasts and scenarios consider severe but plausible downsides that

could impact the Group, which are linked to the business risks identified by the Group. These scenarios, both individually and

in combination, have enabled the Directors to conclude that the Group has adequate resources to continue to operate for

the foreseeable future.

Specifically, the Directors have given careful consideration to the regulatory and legal environment in which the Group

operates. Downside sensitivities have been run, individually and in aggregate to assess the impact of the following scenarios:

• The adverse impact of suspension of 888 VIP customers in the Middle East region;

• Reductions in profitability for the whole Group of 10% to reflect potential regulatory, macroeconomic or competitive pressures;

• An increase in interest expense as a result of higher interest rates on the Group’s remaining floating rate debt;

• The phasing of cash outflows relating to regulatory and other provisions and accrual settlements; and

• The adverse impact of potential measures that may be imposed following the UK Gambling Act review.

Management has performed a separate reverse stress test to identify the conditions that would be required to compromise

the Group’s liquidity. Having done so, management has identified further actions to conserve or generate cash to mitigate

any impact of such a scenario occurring. Management has calculated mitigating cost savings that can be implemented by

reducing variable operating expenditure to offset a reduction in cash generation resulting from lower profitability. Following

these actions, the Group could withstand a decrease in forecast EBITDA of 31%. The Board considers the likelihood of a

decline of this magnitude to be remote. Other initiatives, not directly in the Group’s control at the date of approval of these

financial statements, could be considered including the disposal of non-core assets and investments.

Should a more extreme downside scenario occur, or mitigations and initiatives not be achieved, further mitigating actions

that can be executed in the necessary timeframe could be taken, such as a temporary reduction of marketing expenditures.

Conclusion

Based on the above considerations, the Directors continue to adopt the going concern basis in preparing these financial statements.

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1 ACCOUNTING POLICIES CONTINUED

1.1 Basis of preparation continued

New standards, interpretations and amendments adopted by the Group

In preparing the Group financial statements for the current period, the Group has adopted the following new IFRSs,

amendments to IFRSs and IFRS Interpretations Committee (IFRIC) interpretations. All standards do not have a significant

impact on the results or net assets of the Group. Changes are detailed below:

IAS 16 (amended) Property, plant and equipment: proceeds before intended use

IAS 37 (amended) Onerous contracts: cost of fulfilling a contract

IAS 39 (amended) Interest rate benchmark reform – Phase 2

IFRS 1 (amended) Annual improvements to IFRS Standards 2018-2020

IFRS 3 (amended) Reference to the conceptual framework

IFRS 7 (amended) Interest rate benchmark reform – Phase 2

IFRS 9 (amended) Derecognition of financial liabilities

Annual improvements to IFRS standards 2018-2020

IFRS 16 (amended) Annual improvements to IFRS standards 2018-2020

Interest rate benchmark reform – Phase 2

Standards in issue but not effective

At the date of authorisation of the Group financial statements, the following Standards, amendments and Interpretations,

which have not been applied in these Group financial statements, were in issue but not yet effective:

New Standards

IFRS 17 Insurance Contracts (effective 1 January 2023)

Amendments and interpretations

IAS 1 (amended) Disclosure of accounting policies (effective 1 January 2023)

Classification of liabilities as current or non-current (effective 1 January 2024)

IAS 8 (amended) Definition of accounting estimates (effective 1 January 2023)

IAS 12 (amended) Deferred tax related to assets and liabilities arising from a single transaction

(effective 1 January 2023)

IFRS 16 (amended) Lease liabilities in a sale and leaseback (effective 1 January 2024)

The Group does not currently believe that the adoption of these new standards or amendments would have a material effect

on the results or financial position of the Group.

Impact of climate change

The business continues to consider the impact of climate change in the consolidated and company financial statements

and recognise that the most impactful risks are around the cancellation of sporting events due to extreme weather and the

longer-term cost of energy. These costs have been factored into future forecasts and the carrying value of assets in these

financial statements. The Directors do not believe these risks represent a material risk to managements forecasts this year.

Further the group has assessed the impact of climate change in the work on going concern, viability statement and

impairment reviews and considers that the above risk of longer-term cost of energy has been factored into these future

forecasts. The Group constantly monitors the latest government legislation in relation to climate related matters. At the

current time, no legislation has been passed that will impact the Group. The Group will adjust key assumptions in value in use

calculations and sensitise these calculations should a change been required.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described below, the Directors are required to make

judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent

from other sources. The estimates and associated assumptions are based on historical experience and other factors that are

considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised where it affects only that period or in the period and future periods

if it affects both current and future periods.

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Critical accounting judgements

Internally generated intangible assets

Costs relating to internally generated intangible assets are capitalised if the criteria for recognition as assets are met.

The initial capitalisation of costs is based on management’s judgement that technological and economic feasibility criteria

are met. In making this judgement, management considers the progress made in each development project and its latest

forecasts for each project. Other expenditure is charged to the consolidated income statement in the year in which the

expenditure is incurred. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation

and any accumulated impairment losses. For further information see note 12.

IFRS 16

Management addresses the key judgements, including the assessment of the lease term at the point where the lessee can be

reasonably certain of its right to use the underlying asset.

Given the continued uncertainty surrounding the Retail estate, management determined the lease term under IFRS 16 across

the Retail estate as the next available break date, as this means the Group is not ‘reasonably certain’ that any lease break

will not be exercised. The Group has recognised a lease liability of £89.0m at 31 December 2022.

Exceptional and adjusted items

The Group classifies and presents certain items of income and expense as exceptional items. The Group presents adjusted

performance measures which differ from statutory measures due to exclusion of exceptional items and certain non-cash

items as the Group considers that it allows a further understanding of the underlying financial performance of the Group.

These measures are described as “adjusted” and are used by management to measure and monitor the Group’s underlying

financial performance. Non-cash items that are excluded from adjusted performance measures of underlying financial

performance include amortisation of acquired intangibles, amortisation of finance fees, share benefit charges and foreign

exchange differences.

The Group considers any items of income and expense for classification as exceptional if they are one off in nature and

by virtue of their size. The items classified as exceptional (and are excluded from the adjusted measures) are described in

further detail in note 3.

Key accounting estimates

Identification and valuation of William Hill intangible assets

The Group acquired the International (non-US) business of William Hill on 1 July 2022 for an enterprise value of £1.73bn.

As part of the purchase price allocation the Group recognised separately identifiable acquired intangibles comprising

brands (£574.4m); customer relationships (£595.1m) and gambling licences (£8.5m). Goodwill of £785.6m was recognised

on acquisition. The estimate of the value of each class of asset described above is based on recognised valuation

methodologies such as the “relief from royalty” method for brands, recognised industry comparative data and the Group’s

industry experience and specialist knowledge, and is therefore a key accounting estimate. A 5% increase/decrease in

estimated customer churn rates would (decrease)/increase the fair value of customer relationships by £(123.0)m/£176.0m

respectively. Note that consideration of provisions and contingent liabilities identification and valuation on acquisition are

considered in the provision, contingent liabilities and regulatory matters section below.

This has been an area where the Group has made significant accounting estimates during the year. However, the Group

recognises that it is not an accounting estimate where there are major sources of estimation uncertainty at 31 December

2022 that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within

the next financial year.

Further, the Group exercised judgement in determining the intangible assets acquired and their fair value on the William Hill

business combination, with the support of external experts to support the valuation process, where appropriate. See Note 16

for additional information.

Impairment of goodwill and other long-life intangible assets

For the purposes of impairment testing under IAS 36 Impairment of Assets, CGUs are grouped to reflect the level at which goodwill

is monitored by management. The key judgement is the level at which the impairment tests are performed. Management have

allocated Goodwill to Retail on a group of CGUs basis, International on a group of CGUs basis and UK Online as its own CGU

as this is the lowest level at which it is practical to monitor goodwill. These are the levels at which goodwill is assessed for

impairment. Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units

to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows

expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Cash flows

are typically forecast for periods up to five years. For some cash-generating units it is appropriate to use forecasts extending

beyond five years where future investment in the business is expected to result in a long-term growth being achieved outside

of five years. For further information see note 12.

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Taxation

The Group holds a number of provisions for uncertain tax positions on the basis of amounts expected to be paid to the

tax authorities. If for example, the tax authorities in the relevant jurisdictions do not regard the arrangements between

any of the group companies as being made at arm’s length or insofar as changes occur in transfer pricing regulations

or in the interpretation of existing transfer pricing regulations, including through changes to the OECD’s guidelines and/

or recommendations, the amount of tax payable by the Group may increase. The Group’s current tax liabilities reflect

management’s best estimate of the future amounts of corporation tax that would be settled. However, the actual outcome

could be different to the estimate made, as the ultimate tax liability cannot be known until a resolution has been reached

with the relevant tax authority, or the issue becomes time barred.

Provisions, contingent liabilities and regulatory matters

The Group makes a number of estimates in respect of the accounting for, and disclosure of, expenses and contingent

liabilities for customer claims. Provisions are described in further detail in note 22 and contingent liabilities in note 31.

In common with other businesses in the gambling sector the Group receives claims from customers relating to the provision

of gambling services. Claims have been received from customers in a number of (principally European) jurisdictions and

allege either failure to follow responsible gambling procedures, breach of licence conditions or that underlying contracts in

question are null and void given local licencing regimes. The Group expenses customer claims as they are resolved or finally

determined in customers’ favour and provides for such claims where an outcome in favour of the customers in question

is probable.

Specifically, the Group has recognised a provision and contingent liability for customer claims in Austria where the Business

has been subject to a particular acceleration of claims since 2020 following marketing campaigns by litigation funders in

that jurisdiction. Claims have continued to be received throughout 2021 and 2022 at a broadly consistent rate with a slight

acceleration across 2021 and 2022. Customers who have obtained judgement against the Business’ entities in the Austrian

courts have sought to enforce those judgements in Malta and Gibraltar. These are being defended on the basis of a public

policy argument. The provisions held for the Group relating to these claims is £86.2m, mostly related to the Mr Green brand.

The value of the provision and contingent liability are both estimates based on the number and individual size of claims

received to date and assumptions based on such observations as can be derived from those claims and include an estimate

of claims the Group assess it probable, for the provision, and possible, for the contingent liability, that it will receive in the

future. If these rate of receipt of claims were to increase by 25% compared to our expectation the value across the provision

recognised and contingent liability disclosed would increase by £7.0m before consideration of potential gaming tax reclaim.

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. The subsidiaries are

companies controlled by 888 Holdings PLC. Control exists where the Company has power over an entity; exposure, or rights,

to variable returns from its involvement with an entity; and the ability to use its power over an entity to affect the amount of

its returns. Subsidiaries are consolidated from the date the Parent gained control until such time as control ceases.

The financial statements of subsidiaries are included in the consolidated financial statements using the purchase method of

accounting. On the date of the acquisition, the assets and liabilities of a subsidiary are measured at their fair values and any

excess of the fair value of the consideration over the fair values of the identifiable net assets acquired is recognised as goodwill.

Intercompany transactions and balances are eliminated on consolidation.

The financial statements of subsidiaries are prepared for the same reporting period as the Parent Company, using consistent

accounting policies.

Revenue

Revenue is measured at the fair value of the consideration received or receivable from customers and represents amounts

receivable for goods and services that the Group is in business to provide, net of discounts, marketing inducements and VAT,

as set out below.

In the case of licensed betting offices (“LBO”) (including gaming machines), online sportsbook and telebetting and online

casino (including games on the Online arcade and other numbers bets) revenue represents gains and losses from gambling

activity in the period. This revenue is treated as a derivative under IFRS 9 ‘Financial Instruments’ and is therefore out of scope

of IFRS 15 ‘Revenue from Contracts with Customers’. Open positions are carried at fair value, and gains and losses arising on

this valuation are recognised in revenue, as well as gains and losses realised on positions that have closed.

Revenue from the Online poker business is within the scope of IFRS 15 ‘Revenue from Contracts with Customers’ and reflects

the net income (rake) earned when a poker game is completed, which is when the performance obligation is deemed to

be satisfied.

Revenue from B2B is mainly comprised of services provided to business partners. B2B also includes fees from the provision

of certain gaming related services to partners. Customer advances received are treated as deferred income within current

liabilities and released as they are earned.

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Revenue continued

For services provided to business partners through its B2B unit, the Group examines whether the nature of its promise is a

performance obligation to provide the defined goods or services itself, which means the Group is a principal and therefore

recognises revenue as the gross amount of the revenue generated from use of the Group’s platform in online gaming activities

with the partners’ share of the revenue charged to marketing expenses; or to arrange that another party provide the goods or

services which means the Group is an agent and therefore recognises revenue as the amount of the net commission from use

of the Group’s platform.

The Group is a principal when it controls the promised goods or services before their transfer to the customer. Indicators

that the Group controls the goods or services before their transfer to the customer include, inter alia, as follows: The Group

is the primary obligor for fulfilling the promises in the contract; the Group has inventory risk before the goods or services are

transferred to the customer; and the Group has discretion in setting the prices of the goods or services.

Cost of Sales

Cost of sales consists primarily of gaming duties, payment service providers’ commissions, chargebacks, commission and

royalties payable to third parties, all of which are recognised on an accruals basis.

Operating expenses

Operating expenses consist primarily of marketing, staff costs and corporate professional expenses, both of which are

recognised on an accruals basis.

Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit retirement schemes, the cost of providing benefits is determined using the Projected Unit Credit Method,

with actuarial valuations being carried out at each period end date. Actuarial remeasurements are recognised in full in the

period in which they occur. They are recognised outside profit or loss and presented in the Consolidated Statement of Other

Comprehensive Income.

The net retirement benefit asset or obligation recognised in the Consolidated Statement of Financial Position represents the

present value of the defined benefit obligation as adjusted for unrecognised past service costs and as reduced by the fair

value of scheme assets. Any asset resulting from this calculation is limited to past service costs plus the present value of

available refunds and reductions in future contributions to the plan.

Foreign currency

Monetary assets and liabilities denominated in currencies other than the functional currency of the relevant company are

translated into that functional currency using year-end spot foreign exchange rates. Non-monetary assets and liabilities are

translated using exchange rates prevailing at the dates of the transactions. Exchange rate differences on foreign currency

transactions are included in financial income or financial expenses in the Consolidated Income Statement, as appropriate.

The results and financial position of all Group entities that have a functional currency different from pound sterling are

translated into the presentation currency at foreign exchange rates as set out below. Exchange differences arising, if any, are

recorded in the Consolidated Statement of Comprehensive Income as a component of other comprehensive income.

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance

sheet; and

(ii) income and expenses for each income statement are translated at an average exchange rate (unless this average is

not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case

income and expenses are translated at the dates of the transactions).

Finance income

Finance income relates to interest income and is accrued on a time basis, by reference to the principal outstanding and the

effective interest rate applicable.

Finance costs

Finance costs arising on interest-bearing financial instruments carried at amortised cost are recognised in the Consolidated

Income Statement using the effective interest rate method. Finance costs include the amortisation of fees that are an

integral part of the effective finance cost of a financial instrument, including issue costs, and the amortisation of any other

differences between the amount initially recognised and the redemption price.

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Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the

Consolidated Income Statement because it excludes items of income or expense that are taxable or deductible in other

periods, and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated

using tax rates that have been enacted or substantively enacted by the period end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets

and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is

accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences

and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which

deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference

arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a

transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates,

except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary

difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each period end date and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is

realised based on tax laws and rates that have been enacted at the period end date. Deferred tax is charged or credited in

the Consolidated Income Statement, except when it relates to items charged or credited directly to equity, in which case the

deferred tax is also dealt with in equity.

Goodwill

Goodwill represents the excess of the fair value of the consideration in a business combination over the Group’s interest in the

fair value of the identifiable assets, liabilities and contingent liabilities acquired. Consideration comprises the fair value of any

assets transferred, liabilities assumed and equity instruments issued.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the Consolidated

Income Statement and not subsequently reversed. Where the fair values of identifiable assets, liabilities and contingent

liabilities exceed the fair value of consideration paid, the excess is credited in full to the Consolidated Income Statement

on the acquisition. Changes in the fair value of the contingent consideration and direct costs of acquisition are charged or

credited immediately to the Consolidated Income Statement.

Intangible assets

Acquired intangible assets

Intangible assets arising on acquisitions are recorded at their fair value.

Amortisation is provided at rates calculated to write off the valuation, less estimated residual value, of each asset on a

straight-line basis over its expected useful life, as follows:

Acquired brands Assessed separately for each asset, with lives ranging up to 20 years.

Customer relationships Between 18 months and 13 years.

Bookmaking and mobile technology Between three and five years.

Licences 10 to 20 years.

Amortisation of assets arising on acquisition is recognised as an adjusted item, please see note 3 for further information.

Internally generated intangible assets

An internally generated intangible asset arising from the Group’s development of computer systems is recognised only if all of

the following conditions are met:

• an asset is created that can be identified (such as software and new processes);

• it is probable that the asset created will generate future economic benefits; and

• the development cost of the asset can be measured reliably.

Expenditure incurred on development activities of gaming platforms is capitalised only when the expenditure will lead to new

or substantially improved products or processes, the products or processes are technically and commercially feasible and

the Group has sufficient resources to complete development. All other development expenditure is expensed. Subsequent

expenditure on intangible assets is capitalised only where it clearly increases the economic benefits to be derived from the

asset to which it relates. The Group estimates the useful life of these assets as between three and five years.

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Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation. Assets are assessed at each

balance sheet date for indicators of impairment.

Depreciation is calculated using the straight-line method, at annual rates estimated to write off the cost of the assets less

their estimated residual values over their expected useful lives. The annual depreciation rates are as follows:

Freehold buildings 50 years

Long leasehold properties 50 years

Short leasehold properties Over the unexpired period of the lease

Short leasehold improvements The shorter of ten years or the unexpired period of the lease

Fixtures, fittings and equipment and motor vehicles At variable rates between three and ten years

Right-of-use asset Reasonably certain lease term

Impairment of non-financial assets

An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the

asset may be impaired. At each period end date, the Group reviews the carrying amounts of its goodwill, property plant and

equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment

loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group

estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated

future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have

not been adjusted. This process is described in more detail in note 12 to the financial statements.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying

amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an

expense immediately.

Other than for goodwill, where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating

unit) is increased to the revised estimate of its recoverable amount, but only to the point that the increased carrying amount

does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the

asset (or cash-generating unit) in prior periods. A reversal of an impairment loss is recognised as income immediately.

Fair value measurement

The Group measures certain financial instruments at fair value at each balance sheet date. The fair value related disclosures

are included in notes 24 and 25. Fair value is the price that would be received or paid in an orderly transaction between

market participants at a particular date, either in the principal market for the asset or liability or, in the absence of a

principal market, in the most advantageous market for that asset or liability accessible to the Group.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to

measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

IFRS 13 ‘Fair Value Measurement’ emphasises that fair value is a market-based measurement, not an entity-specific measurement.

Therefore, fair value measurements under IFRS 13 should be determined based on the assumptions that market participants

would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value

measurements, IFRS 13 establishes a fair value hierarchy that distinguishes between market participant assumptions based

on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1

and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs

classified within Level 3 of the hierarchy).

• Level 1 inputs utilise quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has

the ability to access.

• Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either

directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well

as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange

rates, and yield curves that are observable at commonly quoted intervals.

• Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions,

as there is little, if any, related market activity. In instances where the determination of the fair value measurement is

based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire

fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its

entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety

requires judgement and considers factors specific to the asset or liability.

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Assets held for sale

Assets categorised as held for sale are held on the Consolidated Statement of Financial Position at the lower of the book

value and fair value less costs to sell. This assessment is carried out when assets are transferred to held for sale. The impact

of any adjustment as a part of this assessment is booked through the Consolidated Income Statement.

Cash and cash equivalents

Cash comprises cash in hand and balances with banks and on-demand deposits. Cash equivalents are short-term, highly

liquid investments that are readily convertible to known amounts of cash. They include short-term deposits originally

purchased with maturities of three months or less .

Trade receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost and principally

comprise amounts due from credit card companies and from e-payment companies. The Group has applied IFRS 9’s

simplified approach and has calculated the expected credit losses (‘ECLs’) based on lifetime of expected credit losses. Bad

debts are written off when there is objective evidence that the full amount may not be collected.

Equity

Equity issued by the Company is recorded as the proceeds received from the issue of shares, net of direct issue costs.

Treasury shares

Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity.

No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity

instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in the share

premium account.

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is

when declared by the Board of Directors and paid. In the case of final dividends, this is when approved by the shareholders

at the Annual General Meeting.

Equity-settled Share benefit charges

Where the Company grants its employees or contractors shares or options, the cost of those awards, recognised in the

Consolidated Income Statement over the vesting period with a corresponding increase in equity, is measured with reference

to the fair value at the date of grant. Market performance conditions are taken into account in determining the fair value at

the date of grant. Non-market performance conditions, including service conditions, are taken into account by adjusting the

number of instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised

over the vesting period is based on the number of instruments that eventually vest.

Cash-settled transactions

A liability is recognised for the fair value of cash-settled transactions. The fair value is measured initially and at each

reporting date up to and including the settlement date, with changes in fair value recognised within employee benefits

expenses. The fair value is expensed over the period until the vesting date with recognition of a corresponding liability.

Further details of which are given in note 28. The approach used to account for vesting conditions when measuring equity-

settled transactions also applies to cash-settled transactions.

Severance pay schemes

The Group operates two severance pay schemes:

Defined benefit severance pay scheme

The Group operates a defined benefit severance pay scheme pursuant to the Severance Pay Law in Israel. Under this

scheme Group employees are entitled to severance pay upon redundancy or retirement. The liability for termination of

employment is measured using the projected unit credit method.

Severance pay scheme surpluses and deficits are measured as:

• the fair value of plan assets at the reporting date; less

• plan liabilities calculated using the projected unit credit method, discounted to its present value using yields available for

the appropriate government bonds that have maturity dates appropriate to the terms of the liabilities.

Remeasurements of the net severance pay scheme assets and liabilities, including actuarial gains and losses on the scheme

liabilities due to changes in assumptions or experience within the scheme and any differences between the interest income

and the actual return on assets, are recognised in the Consolidated Statement of Comprehensive Income in the period in

which they arise.

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Defined contribution severance pay scheme

In 2017 the Group introduced a defined contribution plan pursuant to section 14 to the Severance Pay Law. Under this

scheme the Group pays fixed monthly contributions. Payments to defined contribution plans are charged as an expense as

they fall due.

Borrowings

The Group records bank and other borrowings initially at fair value, which equals the proceeds received, or acquired in a

business transaction, net of direct issue costs, and subsequently at amortised cost. The Group accounts for finance charges,

including premiums payable on settlement or redemption and direct issue costs, using the effective interest rate method.

Derivatives and hedging activities

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate, foreign

exchange rate and inflation risks.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently

remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value

depends on whether or not the derivative is designated for hedge accounting.

Hedge accounting

The Company designates certain derivatives as hedging instruments as either:

• hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast

transactions (cash flow hedges); or

• hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or

• hedges of a net investment in a foreign operation (net investment hedges).

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and

the hedged item along with its risk management objectives and its strategy for undertaking various hedge transactions.

Furthermore, at the inception of the hedge, and on an ongoing basis, the Company documents whether a hedging

relationship meets the hedge effectiveness requirements under IFRS 9 and whether there continues to be an economic

relationship between the hedged item and the hedging instrument.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is

recognised in other comprehensive income and accumulated under the heading of cash flow hedge reserve. The gain or loss

relating to the ineffective portion is recognised immediately within profit and loss.

Amounts previously recognised in other comprehensive income are reclassified to earnings in the periods when the hedged

item is recognised in profit and loss. These earnings are included within the same line of the Consolidated Income Statement

as the recognised hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial

asset or a non-financial liability, the gains and losses previously recognised in other comprehensive income and accumulated

in equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or

non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no

longer meets the criteria for hedge accounting. Any gain or loss recognised in the cash flow hedge reserve remains in equity

and is recognised in profit or loss when the forecast transaction is ultimately recognised in profit or loss. When a forecast

transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.

Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument

that does not qualify for hedge are recognised immediately in profit or loss and are included in “finance income/expense”.

888 Holdings PLC Annual Report & Accounts 2022 159

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

1 ACCOUNTING POLICIES CONTINUED

Leasing

At inception of a contract, the Group considers whether the contract is, or contains, a lease. A contract is, or contains, a

lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The lease liability is initially

measured at the present value of the lease payments that have not been paid at the commencement date, discounted using

an appropriate discount rate. The discount rate used to calculate the lease liability is the rate implicit in the lease, if it can

be readily determined, or the lessee’s incremental borrowing rate if not. The Group uses an incremental borrowing rate for

its leases, which is determined based on the margin requirements of the Group’s revolving credit facilities as well as country

specific adjustments. A right-of-use asset is also recognised equal to the lease liability and depreciated over the period from

the commencement date to the earlier of, the end of the useful life of the right-of-use asset or the lease term. The Group

has assessed the lease term of properties within its retail estate to be up to the first available contractual break within the

lease. The Group has deemed that it cannot be reasonably certain that it will continue beyond this time given the continued

uncertainty surrounding the Group’s retail business.

The Group has also applied the below practical expedients:

• exclude leases from measurement and recognition where the lease term ends within 12 months from the date of initial

application and account for these leases as short-term leases;

• exclude low value leases for lease values less than £5,000;

• apply a single discount rate to a portfolio of leases with similar characteristics;

• use hindsight to determine the lease term if the contract contains options to extend or terminate; and

• exclude initial direct lease costs in the measurement of the right-of-use asset.

The Group has a small number of sublet properties. In these instances, leases are classified as finance leases whenever the

terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified

as operating leases. Where the Group is an intermediate lessor, the sublease classification is assessed with reference to the

head lease right-of-use asset. Amounts due from lessees under finance leases are recorded as receivables at the amount

of the Group’s net investment in the lease. Finance lease income is allocated to accounting periods to reflect a constant

periodic rate of return on the Group’s net investment in the lease. Rental income from operating leases is recognised on a

straight-line basis over the term of the lease. IFRS 16 requires lessees to recognise right-of-use assets and lease liabilities for

most leases.

Trade and other payables

Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost.

Provisions

Provisions are recognised when the Group has a present or constructive obligation as a result of a past event from which it is

probable that it will result in an outflow of economic benefits that can be reasonably estimated.

Liabilities to customers

Liabilities to customers comprise the amounts that are credited to customers’ bankroll (the Group’s electronic “wallet”),

including provision for bonuses granted by the Group, less fees and charges applied to customer accounts, along with full

progressive provision for jackpots. These amounts are repayable in accordance with the applicable terms and conditions.

888 Holdings PLC Annual Report & Accounts 2022160

FINANCIAL STATEMENTS

2 SEGMENT INFORMATION

The Board has reviewed and confirmed the Group’s reportable segments in line with the guidance provided by IFRS 8

‘Operating Segments’. The segments disclosed below are aligned with the reports that the Group’s Chief Executive Officer

and Chief Financial Officer as Chief Operating Decision Makers review to make strategic decisions.

During the year ended 31 December 2022, subsequent to the acquisition of William Hill, the Group changed its segments to

be Retail, UK Online and International. As such, the comparative information below has been re-presented from the prior year

to display results under the new reported segments.

The Retail segment comprises all activity undertaken in LBOs including gaming machines. The UK Online segment comprises

all online activity, including sports betting, casino, poker and other gaming products along with telephone betting services

that are incurred within the UK and Ireland. The International segment comprises all online activity, including sports betting,

casino, poker and other gaming products along with telephone betting services that are incurred within all territories

excluding the UK. There are no inter-segmental sales within the Group.

Segment performance is shown on an adjusted EBITDA basis, with a reconciliation from adjusted EBITDA to statutory results

for clarity. Information for the year ended 31 December 2022 is as follows:

2022

Retail

£ million

UK Online

£ million

International

£ million

Other

£ million

Corporate

£ million

Total

£ million

Revenue

255.5 455.5 508.3 19.5 — 1,238.8

Gaming duties and other cost of sales (55.0) (163.7) (184.7) (10.5) — (413.9)

Adjusted Gross Profit 200.5 291.8 323.6 9.0 — 824.9

Marketing (3.3) (148.1) (105.2) (2.5) — (259.1)

Contribution 197.2 143.7 218.4 6.5 — 565.8

Operating expenses (156.0) (82.1) (100.1) (4.8) (5.2) (348.2)

Associate income — — — — 0.3 0.3

Adjusted EBITDA 41.2 61.6 118.3 1.7 (4.9) 217.9

Depreciation (30.8)

Amortisation (excluding acquired

intangibles) (32.8)

Amortisation of acquired intangibles (56.7)

Exceptional items – cost of sales and

operating expenses (93.2)

Share benefit charges (5.2)

Foreign exchange (4.0)

Finance expenses (111.7)

Finance income 0.8

Loss before tax (115.7)

1. Revenue recognised under IFRS 9 is £255.5m in Retail, £455.5m in UK Online, £502.7m in International and £10,9m in Other. Revenue recognised under IFRS 15 is £nil

in Retail, £nil in UK Online, £5.6m in International and £8.6m in Other.

2. ‘Other’ represents the Bingo business that was disposed of during the year. See note 16 for further information.

Retail

£ million

UK Online

£ million

International

£ million

Other

£ million

Corporate

£ million

Total

£ million

Total segment assets 542.6 1,395.5 961.3 — 11.7 2,911.1

Total segment liabilities 176.3 341.6 562.3 — 1,458.7 2,538.9

Included within total assets:

Goodwill 99.4 360.4 326.2 — — 786.0

Interests in associates — — — — 38.4 38.4

Capital additions 13.4 24.6 68.3 — 1.1 107.4

888 Holdings PLC Annual Report & Accounts 2022 161

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2 SEGMENT INFORMATION CONTINUED

2021

Retail

£ million

UK Online

£ million

International

£ million

Other

£ million

Corporate

£ million

Total

£ million

Revenue

— 255.2 410.4 46.7 — 712.3

Gaming duties and other cost of sales — (88.7) (129.2) (24.4) — (242.3)

Adjusted Gross Profit — 166.5 281.2 22.3 — 470.0

Marketing — (118.9) (97.4) (6.2) — (222.5)

Contribution — 47.6 183.8 16.1 — 247.5

Operating expenses — (39.9) (69.7) (8.8) (9.4) (127.8)

Associate income — — — — — —

Adjusted EBITDA — 7.7 114.1 7. 3 (9.4) 119.7

Depreciation (10.3)

Amortisation (excluding acquired

intangibles) (16.1)

Exceptional items – cost of sales and

operating expenses (17.3)

Share benefit charges (6.1)

Foreign exchange (6.7)

Finance income —

Finance expenses (4.2)

Profit before tax 59.0

1. Revenue recognised under IFRS 9 is £nil in Retail, £255.2m in UK Online, £410.4m in International and £28.6m in Other. Revenue recognised under IFRS 15 is £nil in

Retail, £nil in UK Online, £nil in International and £18.1m in Other.

2. ‘Other’ represents the Bingo business that was disposed of during 2022. See note 16 for further information.

Retail

£ million

UK Online

£ million

International

£ million

Other

£ million

Corporate

£ million

Total

£ million

Total segment assets — 79.4 304.6 — 13.9 397.9

Total segment liabilities — 132.2 100.7 — 18.1 251.0

Included within total assets:

Goodwill — 36.9 23.2 — — 60.1

Interests in associates — — — — — —

Capital additions — 0.6 22.1 — — 22.7

Geographical information

The Group’s performance can also be reviewed by considering the geographical markets and geographical locations within

which the Group operates. This information is outlined below:

Revenue by geographical market (based on location of customer)

2022

£ million

2021

£ million

United Kingdom 711.9 300.6

Rest of World 343.1 276.6

Italy 116.4 86.0

Spain 67.4 49.1

1,238.8 712.3

Non-current assets by geographical location

2022

£ million

2021

£ million

United Kingdom 536.0 45.8

Gibraltar 1,194.9 58.8

Rest of World 721.0 53.1

2,451.9 157.7

3 EXCEPTIONAL ITEMS AND ADJUSTMENTS

In determining the classification and presentation of exceptional items we have applied consistently the guidelines issued by

the Financial Reporting Council (‘FRC’) that primarily addressed the following:

• Consistency and even-handedness in classification and presentation;

• Guidance on whether and when recurring items should be considered as part of underlying results; and

• Clarity in presentation, explanation and disclosure of exceptional items and their relevance.

888 Holdings PLC Annual Report & Accounts 2022162

FINANCIAL STATEMENTS

3 EXCEPTIONAL ITEMS AND ADJUSTMENTS CONTINUED

In preparing the ARA, we also note the European Securities and Markets Authority (‘ESMA’) guidance on Alternative

Performance Measures (APM), including:

• Clarity of presentation and explanation of the APM;

• Reconciliation of each APM to the most directly reconcilable financial statement caption;

• APMs should not be displayed with more prominence than statutory financials;

• APMs should be accompanied by comparatives; and

• The definition and calculation of APMs should be consistent over time.

We are satisfied that our policies and practice conform to the above guidelines.

Adjusted results

The Group reports adjusted results, both internally and externally, that differ from statutory results prepared in accordance

with IFRS. These adjusted results, which include our key metrics of adjusted EBITDA and adjusted EPS, are considered to be a

useful reflection of the underlying performance of the Group and its businesses, since they exclude transactions which impair

visibility of the underlying activity in each segment. More specifically, visibility can be impaired in one or both of the following

instances:

• a transaction is of such a material or infrequent nature that it would obscure an understanding of underlying outcomes

and trends in revenues, costs or other components of performance (for example, a significant impairment charge); or

• a transaction that results from a corporate activity that has neither a close relationship to the Group’s operations nor any

associated operational cash flows (for example, the amortisation of intangibles recognised on acquisitions).

Adjusted results are used as the primary measures of business performance within the Group and align with the results shown

in management accounts, with the key uses being:

• management and Board reviews of performance against expectations and over time, including assessments of segmental

performance (see note 2 and the Strategic Report);

• in support of business decisions by the Board and by management, encompassing both strategic and operational levels

of decision-making.

The Group’s policies on adjusted measures are consistently applied over time, but they are not defined by IFRS and,

therefore, may differ from adjusted measures as used by other companies.

The Consolidated Income Statement presents adjusted results alongside statutory measures, with the reconciling items being

itemised and described below. We discriminate between two types of reconciling items: exceptional items and adjusted items.

Exceptional items

Exceptional items are those items the Directors consider to be one-off or material in nature that should be brought to the

reader’s attention in understanding the Group’s financial performance.

Exceptional items are as follows:

2022

£ million

2021

£ million

Cost of sales

Retroactive duties and associated (credit)/charges (3.9) 4.2

Exceptional items – cost of sales (3.9) 4.2

Operating expenses

Acquisition related costs 24.5 10.9

Integration and transformation costs 14.4 2.2

Disposal of 888 Bingo 11.7 —

Impairment of US Goodwill and other assets 55.7 —

Revaluation of contingent consideration (9.2) —

Exceptional items – operating expenses 97.1 13.1

Finance expenses

Senior Unsecured Notes early redemption fees 14.1 —

Gain on settlement of Senior Unsecured Notes (7.1) —

Exceptional items – finance expenses 7.0 —

Total exceptional items before tax 100.2 17. 3

Tax on exceptional items 2.8 2.5

Total exceptional items 103.0 19.8

Total tax on exceptional items and adjustments is a credit of £11.4m, £14.2m of which relates to adjustments.

888 Holdings PLC Annual Report & Accounts 2022 163

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

3 EXCEPTIONAL ITEMS AND ADJUSTMENTS CONTINUED

Retroactive gaming duties and associated charges

The industry in which the Group operates is subject to continuing scrutiny by regulators and other governmental authorities,

which may, in certain circumstances, lead to enforcement actions, sanctions, fines and penalties or the assertion of private

litigations, claims and damages. In 2021, a provision was recognised in 888 relating to a liability in Spain of £4.2m. In the year

£0.3m was settled, leading to a release of £3.9m.

Acquisition related costs

The Group has incurred legal and M&A costs associated with the acquisition of William Hill of £24.5m (2021: £10.9m).

Integration and transformation costs

Following the acquisition of the William Hill International (non-US) business, the integration and transformation program

began and is expected to take three years until 2025. The cash costs to achieve the targeted integration synergies are

expected to cost approximately £100.0m over the lifetime of the programme. In 2022, there were a total of £8.8m of costs

relating to the integration programme, namely redundancy costs of £5.8m and legal and consultancy fees of £3.0m and a

further £3.7m of platform separation and other integration costs.

Alongside this, the transformation of the Retail operating model has led to a £1.9m charge, albeit the savings from this are

not classified as synergies. In the prior year, the Group incurred £2.0m of redundancy costs related to the decision to close

the Antigua office, as well as £0.2m relating to the disposal of property, plant and equipment.

Disposal of 888 Bingo

On 7 July 2022, the Group announced that it had completed the sale of its entire Bingo business to Saphalata Holdings Ltd.,

a member of the Broadway Gaming group, for a total cash consideration of £37.4 million (US$45.25 million), out of which

£35.7 million was paid on completion and a further £1.7 million will unconditionally be paid in one year. As a result, the Group

reclassified Bingo assets and liabilities as ‘Held for sale’ and recognised an impairment loss of £11.2 million. An additional

£0.5m loss was recorded on the disposal of the business. Refer to note 16.

Impairment of US Goodwill and other assets

During the year, as a part of the annual impairment review, management performed a value in use calculation to assess

the recoverable amount of the Group’s US business, using that business’s underlying cash flow forecasts. The recoverable

amount was lower than the book value of its assets and, as such, the Group impaired the goodwill on the US business in full,

totalling £25.7m.

Additionally as part of the integration, the business intends to use the existing 888 technology platform as the basis for the

future platform of the Group, leading to a write off of the Unity platform, a proprietary technology system William Hill was

building that is no longer needed, at a cost of £28.1m. A further £1.4m of smaller technology assets were written off. £0.5m

of freehold assets were written off when reclassified to held for sale at the year end, due to the assets being tested for

impairment as a result of the transfer.

Revaluation of contingent consideration

As a part of the transaction agreement with Caesars for the purchase of William Hill, an amount of up to £100.0m consideration

was contingent subject to the enlarged group hitting specific EBITDA metrics. This was fair valued on acquisition at £9.6m and

revalued at the year-end date to £0.4m, leading to a release in this contingent consideration of £9.2m.

Senior Unsecured Notes early redemption fees

As part of the William Hill acquisition, the Group acquired certain Senior Unsecured Notes, £350.0m 4.875% due May 2023

and £350.0m 4.75% due May 2026. Subsequent to the acquisition, the £350.0m Note due May 2023 was fully redeemed as

well as a partial redemption amounting to £339.5m of the Note due May 2026.

The total cost to the Group of settling the Notes consisted of £12.2m in early redemption fees together with a combined £1.9m

of unamortised finance fees, which were written off to profit and loss immediately on redemption of each note. All of the

costs were considered as exceptional due to their one-off nature.

Gain on settlement of Senior Unsecured Notes

The Senior Unsecured Notes acquired in the acquisition of William Hill were accounted for at fair value. Subsequently these

Notes have been settled and as such the gain on settlement of these Notes of £7.1m has been recognised.

Adjusted items

Adjusted items are recurring items that are excluded from internal measures of underlying performance and which are not

considered by the Directors to be exceptional. This relates to the amortisation of specific intangible assets recognised in

acquisitions, foreign exchange and share benefit charges. These items are defined as adjusted items as it is believed it

would impair the visibility of the underlying activities across each segment as it is not closely related to the businesses’ or

any associated operational cash flows. Each of these items are recurring and occur in each reporting period and will be

consistently adjusted in future periods. Note that the adjusted items are all shown on the face of the consolidated income

statement in the reconciliations of both adjusted EBITDA and adjusted profit after tax.

888 Holdings PLC Annual Report & Accounts 2022164

FINANCIAL STATEMENTS

4 SHARE OF RESULTS OF ASSOCIATES

2022

£ million

2021

£ million

Share of post-tax profit of equity accounted associate 0.3 —

The above represents the Group’s share of the results of Sports Information Services (Holdings) Limited (see note 14) for the

period in which the Group owned the associate.

5 OPERATING PROFIT

Notes

2022

£ million

2021

£ million

Operating profit is stated after charging:

Gaming duties 256.3 133.7

Marketing expenses 257.8 222.6

Staff costs (including Executive Directors) 6 227.4 112.9

Exceptional items – cost of sales 3 (3.9) 4.2

Exceptional items – operating expenses 3 97.1 13.1

Depreciation (within operating expenses) 13 30.8 10.3

Amortisation (within operating expenses) 12 89.5 16.1

Auditor remuneration

2022

£ million

2021

£ million

Audit of Company 1.0 0.6

Audit of Group 2.0 0.1

Total fees for audit services 3.0 0.7

Audit related assurance services – half year review 0.1 —

Other assurance services 0.1 0.2

Total assurance services 0.2 0.2

Other non-audit services 0.8 2.0

Total fees for non-audit services 1.0 2.2

Total fees 4.0 2.9

1. Non-Audit fees for the year ended 31 December 2021 have increased by £0.3 million compared to the amount previously reported due to fees agreed during the

year ended 31 December 2022 but which related to the year ended 31 December 2021.

The auditor acted as reporting accountants in connection with the Company’s circular and prospectus for the acquisition

of William Hill International and Capital Raise that will be published during Q2 2022. Total non-audit fees payable to Ernst &

Young for permissible non-audit services relating to the transaction are £0.9m. Total fees for non-audit services represented

34% (2021: 296%) of the total fees for audit services. Further considerations in respect of the audit and non-audit fees for the

year are set out in the Audit Committee Report.

6 STAFF COSTS

Staff costs, including Executive Directors’ remuneration, comprises the following elements:

2022

£ million

2021

£ million

Wages and salaries 196.8 101.0

Social security 17.4 5.5

Employee benefits and severance pay scheme costs 13.2 6.4

227.4 112.9

In the consolidated income statement, total staff costs, including share benefit charges of £5.2m (2021: £6.1m), are included

within the Operating expenses.

The average number of employees during the year was 12,019

(2021: 1,759).

1. The current year includes an average of 10,213 William Hill staff from 1 July 2022.

888 Holdings PLC Annual Report & Accounts 2022 165

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

6 STAFF COSTS CONTINUED

Severance pay scheme – Israel

The Group has a defined contribution plan pursuant to section 14 to the Severance Pay Law under which the Group pays

fixed contributions and will have no legal or constructive obligation to pay further contributions if the fund does not hold

sufficient amounts to pay all employee benefits relating to employee service at the date of their departure. The Group

recognised an expense in respect of contribution to the defined contribution plan during the year of £1.9m (2021: £1.6m).

The Group’s employees in Israel, who are not subject to section 14 to the Severance Pay Law, are eligible to receive certain

benefits from the Group in specific circumstances on leaving the Group. As such the Group operates a defined benefit

severance pay plan which requires contributions to be made to separately administered funds. The funds are held by an

independent third-party company.

The current service cost and the present value of the defined benefit obligation are measured using the projected unit

credit method. Under this schedule, the Company contributes on a monthly basis at the rate of 8.3% of the aggregate of

members’ salaries.

The disclosures set out below are based on calculations carried out as at 31 December 2022 by a qualified

independent actuary.

The following table summarises the employee benefits figures as included in the consolidated financial statements:

2022

£ million

2021

£ million

Included in the balance sheet:

Severance pay liability 1.2 3.7

Included in the income statement:

Current service costs (within Operating expenses) 1.9 2.6

Included in the statement of comprehensive income:

Gain on remeasurement of severance pay scheme liability (2.3) (2.5)

Movement in severance pay scheme asset and liability:

Severance pay scheme assets

2022

£ million

2021

£ million

At beginning of year 19.2 18.0

Interest income 0.6 0.5

Contributions by the Group 1.9 2.0

Benefits paid (4.2) (4.4)

Return on assets less interest income already recorded (1.0) 2.3

Exchange differences (0.3) 0.8

At end of year 16.2 19.2

Severance pay plan liabilities

2022

£ million

2021

£ million

At beginning of year 23.0 24.5

Interest expense 0.7 0.7

Current service costs 1.8 2.5

Benefits paid (4.4) (4.5)

Actuarial (gain)/loss on past experience (0.2) 0.9

Actuarial gain on changes in financial assumptions (3.1) (1.2)

Exchange differences (0.4) 0.1

At end of year 17.4 23.0

As at 31 December 2022 the net accounting deficit of the defined benefit severance pay plan was £1.2m (2021: £3.7m). The

Scheme is backed by substantial assets amounting to £16.2m at 31 December 2022 (2021: £19.3m). The net accounting deficit

of defined benefit severance plan is a result of:

• Potential liability to pay further contributions to employees who will be made redundant, if the fund does not hold

sufficient assets to pay all benefits relating to employee service at the date of their departure.

• Volatility of Israeli government bond rates may have substantial impact in absolute terms on the net liability. An increase

in the discount rate from 3.45% in 2021 to 5.54% in 2022 resulted in a £3.1m decrease of the plan liabilities.

A further increase in the discount rate by 0.25% per annum (i.e. 5.54% to 5.79%) would decrease the plan liabilities by £0.1m

(2021: £0.4m).

888 Holdings PLC Annual Report & Accounts 2022166

FINANCIAL STATEMENTS

6 STAFF COSTS CONTINUED

Severance pay scheme – Israel continued

The impact of the severance deficit on the level of distributable reserves is monitored on an on-going basis. Monitoring

enables planning for any potential adverse volatility and helps the Group to assess the likely impact on distributable reserves.

Employees can determine individually into which type of investment their share of the plan assets are invested, therefore the

Group is unable to accurately disclose the proportions of the plan assets invested in each class of asset.

The expected contribution for 2023 is £1.9m.

The main actuarial assumptions used in determining the fair value of the Group’s severance pay plan are shown below:

2022

2021

Discount rate (nominal) 5.54 3.45

Estimated increase in employee benefits costs 5.05 5.14

Voluntary termination rate 75 75

Inflation rates based on Israeli bonds 2.68 2.54

Sensitivity of balance sheet at 31 December 2022

IAS 19 calculations could result in volatility in the Consolidated Statement of Financial Position principally because the market

value of assets (with significant exposure to equities) is being compared with a liability assessment derived from corporate

bond yields.

The table below shows the sensitivity of the IAS 19 balance sheet position to changes in some of the assumptions. Where one

assumption has been changed all the other assumptions are kept as disclosed above.

Resulted

(surplus)/

deficit

£ million

Change

from

disclosed

£ million

Discount rate less 0.25% (1.5) (0.3)

Estimated increase in employee benefits costs plus 1% (2.3) (1.1)

Voluntary termination rate decrease 5% (1.3) (0.1)

Inflation rates up 0.25% (1.1) (0.1)

7 FINANCE INCOME

2022

£ million

2021

£ million

Total finance income 0.8 —

8 FINANCE EXPENSES

Note

2022

£ million

2021

£ million

Interest expenses related to lease liabilities 3.0 0.9

Bank loans and bonds 74.9 —

Amortisation of finance fees 0.1 —

Hedging activities 3.3 —

Interest expenses related to settlement of tax liability — 2.8

Interest expenses related to severance pay liability, net — 0.1

Foreign exchange on financing activities 22.7 —

Other finance charges and fees 0.7 0.4

Finance expenses – underlying 104.7 4.2

Senior Unsecured Notes early redemption fees 3 14.1 —

Gain on settlement of Senior Unsecured Notes 3 (7.1) —

Finance expenses – exceptional 3 7.0 —

Total finance expenses 111.7 4.2

888 Holdings PLC Annual Report & Accounts 2022 167

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

9 TAXATION

Corporate taxes

2022

£ million

Current taxation

UK corporation tax at 19% 6.5

Other jurisdictions taxation 17.8

Adjustments in respect of prior years 1.3

25.6

Deferred taxation

Origination and reversal of temporary differences (3.0)

Adjustments in respect of prior years (17.7)

(20.7)

Taxation expense 4.9

Deferred taxation related to items recognised in OCI

Remeasurement of severance pay liability 0.6

2021

£ million

Current taxation

Gibraltar corporation tax at 12.5% 0.7

Other jurisdictions taxation 8.6

Adjustments in respect of prior years (0.1)

9.2

Deferred taxation

Origination and reversal of temporary differences (0.2)

Adjustments in respect of prior years —

(0.2)

Taxation expense 9.0

Deferred taxation related to items recognised in OCI

Remeasurement of severance pay liability 0.2

The Group previously reported its current tax with Gibraltar taxation as the headline tax and the Gibraltar tax rate as the

rate to which the actual tax charge was reconciled. In 2022, 888 Holdings PLC became tax resident in the UK by virtue of its

central management and control being situated in the UK and as a result the Group has changed its disclosures to refer to

the UK tax as the headline tax and the UK tax rate for the reconciliations.

The effective tax rate in respect of ordinary activities before adjusting and exceptional items for the year ended 31 December

2022 is 20.0%. The effective tax rate in respect of ordinary activities after exceptional items is -4.2% (31 December 2021: 15%).

The Group monitors developments in respect of the global design, consultation and implementation of Pillar Two, which is

the OECD term for a global minimum tax rate. Pillar Two is expected to lead to further corporation tax being payable by the

Group in the future giving its online operating model. The Group expects that the UK will substantively enact Pillar Two in the

first half of 2023 and that Pillar Two will impact the Group’s current tax starting in 2024.

The Group’s effective tax rate for 2023 is expected to be 7.7%.

888 Holdings PLC Annual Report & Accounts 2022168

FINANCIAL STATEMENTS

9 TAXATION CONTINUED

Corporate taxes continued

The difference between the total tax charge shown above and the amount calculated by applying the standard rate of UK

corporation tax to the (loss)/profit before tax is as follows:

2022

£ million

(Loss)/profit before taxation (115.7)

Standard tax rate in UK (19.0%) (22.0)

Difference in effective tax rate in other jurisdictions 2.5

Expenses not allowed for taxation 32.9

Accrual of liabilities for uncertain tax positions 5.2

Tax on share of result of associate 0.1

Deferred tax not recognised 0.4

Difference in current and deferred tax rate 5.1

Non-taxable income (2.9)

Adjustments to prior years’ tax charges (16.4)

Total tax charge for the year 4.9

2021

£ million

(Loss)/profit before taxation 59.0

Standard tax rate in Gibraltar (12.5%) 8.1

Difference in effective tax rate in other jurisdictions 4.1

Expenses not allowed for taxation 0.7

Deferred tax not recognised (1.5)

Losses utilised previously not recognised for deferred tax (0.2)

Non-taxable income (2.1)

Adjustments to prior years’ tax charges (0.1)

Total tax charge for the year 9.0

The expenses not allowed for tax purposes mainly relate to the acquisition of William Hill for which no tax relief is available. The

difference in effective tax rates in other jurisdictions primarily reflect the lower effective tax rate in Gibraltar. The adjustments in

respect of prior periods mainly relate to a higher than expected restriction on interest deductions in the UK in earlier periods.

10 EARNINGS PER SHARE

Basic earnings per share

Basic earnings per share (EPS) has been calculated by dividing the profit attributable to ordinary shareholders by the

weighted average number of shares in issue and outstanding during the year.

Diluted earnings per share

The weighted average number of shares for diluted earnings per share takes into account all potentially dilutive equity

instruments granted, which are not included in the number of shares for basic earnings per share. Potential ordinary shares

are excluded from the weighted average diluted number of shares when calculating IFRS diluted loss per share because they

are not dilutive. The number of equity instruments included in the diluted EPS calculation consist of 6,235,340 Ordinary Shares

(2021: 6,315,271) and no market-value options (2021: nil).

The number of equity instruments excluded from the diluted EPS calculation is 1,986,155 (2021: 577,979).

2022 2021

Profit for the period attributable to equity holders of the parent (£ million) (120.5) 49.9

Weighted average number of Ordinary Shares in issue and outstanding 426,536,392 371,383,109

Effect of dilutive Ordinary Shares and Share options 6,235,340 6,315,271

Weighted average number of dilutive Ordinary Shares 432,771,732 377,698,380

Basic earnings per share (pence) (28.3) 13.4

Diluted earnings per share (pence) (28.3) 13.2

The diluted loss per share in the current year is the same as the basic loss per share as the potentially dilutive share options

are considered antidilutive as they would reduce the loss per share and therefore, they are disregarded in the calculation.

888 Holdings PLC Annual Report & Accounts 2022 169

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

10 EARNINGS PER SHARE CONTINUED

Adjusted earnings per share

The Directors believe that EPS excluding exceptional and adjusted items and tax on exceptional and adjusted items

(“Adjusted EPS”) allows for a further understanding of the underlying performance of the business and assists in providing

a clearer view of the performance of the Group.

2022 2021

Adjusted profit after tax (£ million) 64.2 82.6

Weighted average number of Ordinary Shares in issue 426,536,392 371,383,109

Weighted average number of dilutive Ordinary Shares 432,771,732 377,698,380

Adjusted basic earnings per share (pence) 15.1 22.2

Adjusted diluted earnings per share (pence) 14.8 21.9

11 DIVIDENDS

2022

£ million

2021

£ million

Dividends paid — 43.8

The Board of Directors does not recommend a final dividend to be paid in respect of the year ended 31 December 2022.

No final dividend was recommended as at 31 December 2021.

The 2020 final dividend of 10.4¢ (7.4p) per share plus an additional one-off 1.6¢ (1.1p) per share was paid on 24 May 2021

totalling US$44.5 million (£31.8m) and the 2021 interim regular dividend of 4.5¢ (3.2p) per share in accordance with 888’s

dividend policy was paid on 13 October 2021 of US$16.8 million (£12.0m).

12 GOODWILL AND OTHER INTANGIBLES

Goodwill

£ million

Brands,

customer

relationships

and licences

£ million

Software

£ million

Total

£ million

Cost or valuation

At 31 December 2021 134.3 61.0 107.4 302.7

Additions via business combinations 785.6 1,178.0 226.2 2,189.8

Additions — 2.3 65.1 67.4

Disposals (124.2) (17.4) (6.4) (148.0)

Effect of foreign exchange rates 16.0 6.9 11.0 33.9

At 31 December 2022 811.7 1,230.8 403.3 2,445.8

Amortisation and impairments:

At 31 December 2021 74.2 34.0 70.6 178.8

Amortisation charge for the year — 45.9 43.6 89.5

Impairment charge for the year 36.9 — 29.5 66.4

Disposals (94.5) (10.4) (5.5) (110.4)

Effect of foreign exchange rates 9.1 4.0 11.4 24.5

At 31 December 2022 25.7 73.5 149.6 248.8

Carrying amounts

At 31 December 2022 786.0 1,157.3 253.7 2,197.0

At 31 December 2021 60.1 27.0 36.8 123.9

888 Holdings PLC Annual Report & Accounts 2022170

FINANCIAL STATEMENTS

12 GOODWILL AND OTHER INTANGIBLES CONTINUED

Goodwill

Goodwill recognised on the acquisition of William Hill was £785.6m as outlined in note 16. Based on the estimated synergies

from the combination management has allocated this goodwill between Retail (£99.4m), UK Online (£360.4m) and

International (£325.8m). This represents the lowest level at which goodwill is monitored for internal management purposes.

The Group previously had £25.7m goodwill related to its US B2C CGU which has been impaired at year end. See impairment

reviews below for more detail. As part of the disposal of the Group’s Bingo business, an £11.2m impairment charge was

recognised at the half year against the goodwill in the Bingo business, representing the difference between the agreed sales

price and the carrying value of the Bingo businesses net assets. Upon completion of the sale in the second half of the year,

the remaining £29.7m of goodwill was disposed.

Brands, customer relationships and licences

This category of assets includes brands, customer relationships and licences primarily recognised in business combinations.

As outlined in note 16, in 2022 the Group acquired William Hill and recognised brands of £574.4m, customer relationships

of £595.1m and licences of £8.5m. These assets are being amortised over 20-30 years for brands, 7-13 years for customer

relationships and 20 years for licences.

Software

This category relates to the cost of both acquired software, through purchase or acquisition, as well as the capitalisation of

internally developed software. On the acquisition of William Hill, the Group acquired software with a fair value of £226.2m. The

software acquired primarily consisted of proprietary software platforms owned by William Hill. Subsequent to the acquisition,

the decision was made to migrate a number of William Hill platforms onto the existing 888 platforms, resulting in an asset

impairment of £29.5m.

Impairment reviews

The Group performs an annual impairment review for goodwill, by comparing the carrying amount of these assets with

their recoverable amount. This is an area where the directors exercise judgement and estimation, as noted on pages 152 to

154. Testing is carried out by allocating the carrying value of these assets to CGUs or group of CGUs and determining the

recoverable amount of those CGUs through value in use calculations. Where the recoverable amount exceeds the carrying

value of the assets, the assets are considered as not impaired.

For the purposes of impairment testing under IAS 36, CGUs are grouped in order to reflect the level at which goodwill is

monitored by management. In the previous period, the Group defined its groups of CGUs as Bingo B2C and US B2C. In the

year, the Group completed the acquisition of William Hill and disposed of the Group’s Bingo business which changed the

groups of CGUs to which goodwill is allocated and monitored. The goodwill generated from the acquisition of William Hill is

monitored in line with the Group’s segments, being Retail, UK Online and International. Prior to the impairment of the CGU,

the pre-existing goodwill relating to the US B2C CGU continued to be monitored at the US B2C CGU level consistent with the

previous period.

Value in use calculations are based upon estimates of future cash flows derived from the Group’s profit forecasts by

segments. Profit forecasts are derived from the Group’s annual strategic planning or similarly scoped exercise.

The principal assumptions underlying our cash flow forecasts are as follows:

• management assume that the underlying business model will continue to operate on a comparable basis, as adjusted for

known regulatory or tax changes and planned business initiatives;

• management’s forecasts anticipate the continuation of recent growth or decline trends in staking, gaming net revenues

and expenses, as adjusted for changes in the Group’s business model or expected changes in the wider industry

or economy;

• management’s forecasts include assumptions on synergy cost savings as a result of the William Hill acquisition, which have

been removed to the extent they were not committed at 31 December 2022;

• management assume that the Group will achieve its target sports betting gross win margins as set for each territory, which

management base upon its experience of the outturn of sports results over the long term, given the tendency for sports

results to vary in the short term but revert to a norm over a longer term; and

• in management’s annual forecasting process, expenses incorporate a bottom-up estimation of the Group’s cost base. For

employee remuneration, this takes into account staffing numbers and models by segment, while other costs are assessed

separately by category, with principal assumptions including an extrapolation of recent cost inflation trends and the

expectation that the Group will incur costs in line with agreed contractual rates.

The Board approved the 2023 budget for each segment in November 2022, as well as a further four-year strategic forecast

covering years 2024 to 2027. These five years form the basis of our value in use calculation. Cash flows beyond that five-year

period were extrapolated using long-term growth rates as estimated for each group of CGUs separately.

888 Holdings PLC Annual Report & Accounts 2022 171

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

12 GOODWILL AND OTHER INTANGIBLES CONTINUED

Impairment reviews continued

The other significant assumptions incorporated into our impairment reviews are those relating to discount rates and

long-term growth assumptions, as noted below separately for each CGU or group of CGUs:

CGUs

2022

Discount

rate

2022

Long-term

growth rate

Retail 13.3 0.0

UK Online 12.1 2.5

International 13.8 5.0

US B2C 18.0 2.0

Discount rates are applied to each CGU or group of CGU’s cash flows that reflect both the time value of money and the risks

that apply to the cash flows of that CGU or group of CGUs. Discount rates are calculated using the weighted average cost of

capital formula based on the CGU’s or group of CGU’s leveraged beta. The leveraged beta is determined by management as

the mean unleveraged beta of listed gaming and betting companies, with samples chosen where applicable from comparable

markets or territories as the CGU or group of CGUs, leveraged to the Group’s capital structure. Further risk premia and discounts

are applied, if appropriate, to this rate to reflect the risk profile of the specific CGU or group of CGUs relative to the market in

which it operates. Our discount rates are calculated on a post-tax basis and converted to a pre-tax basis using the tax rate

applicable to each CGU or group of CGUs. Discount rates disclosed below are pre-tax discount rates.

The long-term growth rates included in the impairment review do not exceed the observed long-term growth rate for each

respective CGU or group of CGUs.

Results of impairment reviews

The recoverable amount and headroom above carrying amount or impairment below carrying amount based on the

impairment review performed at 31 December 2022 for each CGU or group of CGUs are as follows:

2022

CGUs

Recoverable

amount

£ million

Headroom/

(impairment)

£ million

Retail 668.6 165.5

UK Online 1,534.5 359.3

International 1,725.2 996.2

US B2C 19.4 (25.7)

As a result of a revision in the growth projections for the US B2C CGU, the entire goodwill balance of £25.7m has been

impaired, as the projected cash flows no longer support the carrying value of the CGU.

Sensitivity of impairment reviews

For the Retail and UK Online group of CGUs, the following reasonably possible changes in assumptions upon which

the recoverable amount was estimated, would lead to the following changes in the recoverable amount of the CGU

or group of CGUs:

20% fall in cash flows 1% increase in discount rate

Reduction in

recoverable

amount

£ million

Remaining

headroom

£ million

Reduction in

recoverable

amount

£ million

Remaining

headroom

£ million

Retail (133.7) 31.8 (45.2) 120.3

UK Online (306.9) 52.4 (142.9) 210.1

For the International group of CGUs, no impairment would occur under any reasonable possible changes in assumptions

upon which the recoverable amount was estimated.

A 1% increase in the long-term growth rate in the US B2C CGU would have resulted in a reduction to the impairment of £4.0m.

A 1% reduction in the discount rate used would have resulted in a reduction to the impairment of £7.0m.

888 Holdings PLC Annual Report & Accounts 2022172

FINANCIAL STATEMENTS

13 PROPERTY, PLANT AND EQUIPMENT

Land and

buildings

£ million

Fixtures,

fittings and

equipment

£ million

Right-of-use

asset

£ million

Total

£ million

Cost

At 31 December 2021 13.5 35.9 31.1 80.5

Additions via business combinations 28.3 81.2 72.3 181.8

Additions 1.2 10.0 9.3 20.5

Disposals (0.6) (0.9) (3.2) (4.7)

Transferred to assets held for sale (7.5) — — (7.5)

Effect of foreign exchange rates 1.7 4.2 3.9 9.8

At 31 December 2022 36.6 130.4 113.4 280.4

Accumulated depreciation

At 31 December 2021 11.2 28.9 12.4 52.5

Charge for the period 3.2 9.2 18.4 30.8

Disposals (0.5) (0.7) (1.1) (2.3)

Transferred to assets held for sale (0.1) — — (0.1)

Effect of foreign exchange rates 1.4 4.0 1.8 7.2

At 31 December 2022 15.2 41.4 31.5 88.1

Carrying amounts

At 31 December 2022 21.4 89.0 81.9 192.3

At 31 December 2021 2.3 7.0 18.7 28.0

In addition to the amounts above, the Group holds £6.9m of land and buildings that were classified as assets held for sale

(see note 17).

The net book value of land and buildings comprises:

2022

£ million

2021

£ million

Freehold 3.7 —

Long leasehold improvements 5.9 2.3

Short leasehold improvements 11.8 —

21.4 2.3

14 INTERESTS IN ASSOCIATES

The Group holds an associate interest in Sports Information Services (Holdings) Limited (SIS), at a value of £38.4m.

The Group uses the equity method of accounting for associates. The following table shows the aggregate movement in the

Group’s interests in its associate:

£ million

Acquired on acquisition at 1 July 2022 39.0

Share of results before interest and taxation 0.3

Share of interest 0.1

Share of taxation (0.1)

Dividend received (0.9)

At 31 December 2022 38.4

888 Holdings PLC Annual Report & Accounts 2022 173

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

14 INTERESTS IN ASSOCIATES CONTINUED

SIS

At 31 December 2022, William Hill Organization Limited, a principal subsidiary of the Company, held an investment of 19.5%

of the ordinary share capital of SIS, a company incorporated in Great Britain. The Group is able to exert significant influence

over SIS by way of its 19.5% holding and its seat on the Board of Directors.

The SIS group of companies provides real time, pre-event information and results, as well as live coverage of horseracing, greyhound

racing and other sporting activities and events via satellite. The statutory financial statements of SIS are prepared to the year

ending 31 March. The results recognised are based on statutory accounts to March 2022 and management accounts thereafter.

The following financial information relates to SIS as at 31 December 2022 and for the period owned by the Group:

£ million

Total assets 124.1

Total liabilities (65.6)

Total revenue 116.6

Total profit after tax 1.1

15 INVESTMENTS

Good Luck Have Fun Group AB (‘GLHF Group’) shares

On 1 July 2022, as a part of the acquisition of William Hill, the Group obtained an investment in Good Luck Have Fun Group

AB. The Group has a 4.3% holding in the equity in GLHF Group and it is held as a financial asset and designated as fair value

through other comprehensive income, in line with the previous William Hill designation. Subsequent to the acquisition, and as

a result of updates in the strategy by the GLHF Group management team, the Group has considered the recoverability of

the investment. As a part of this assessment of recoverability, the Group has written off the investment of £1.0m in its entirety

through other comprehensive income. The Group therefore holds £nil value in this investment at the balance sheet date.

16 ACQUISITIONS & DISPOSALS

Acquisitions

On 1 July 2022, the Group acquired all of the equity interests in William Hill. Total consideration for the transaction was

£554.3m, consisting of £544.7m cash consideration and up to £100.0m of contingent consideration, fair valued on acquisition

date at £9.6m. The contingent consideration is based on the enlarged Group hitting specific EBITDA metrics and is fair

valued using a probability weighting analysis. Based on the performance of the combined Group since the acquisition, the

fair value of this contingent consideration at 31 December 2022 is £0.4m, with £9.2m being released to the Income Statement,

see note 3 for further detail.

Identifiable assets acquired and liabilities assumed

Provisional

Fair Value

Intangible assets 1,404.2

Property, plant and equipment 109.5

Right-of-use assets 72.3

Investment in sublease 1.4

Investments and investments in associates 40.0

Cash and cash equivalents 157.9

Trade and other receivables 32.9

Income tax asset 10.8

Assets held for sale 0.2

Trade and other payables (399.3)

Provisions and contingent liabilities (178.8)

Derivative financial instruments (3.5)

Lease liabilities (76.6)

Retirement benefit liability (0.4)

Deferred tax liabilities (236.2)

Long term debt (1,165.7)

Total net identifiable liabilities (231.3)

Goodwill 785.6

Consideration transferred 554.3

1. The Group has invested significant resources during the year in performing the purchase price allocation for the William Hill acquisition, including involving experts

where appropriate. However, the Group acknowledges that, given the size and scale of the acquisition, the fair values of assets acquired and liabilities assumed

remain provisional and may change within the measurement period.

In the period from 1 July 2022 to 31 December 2022, the acquired business contributed revenue of £614.3m and a loss after

tax of £45.7m. If the acquisition had occurred on 1 January 2022, the contributed revenue and loss before tax would have

been £1,225.1m and £56.7m respectively.

888 Holdings PLC Annual Report & Accounts 2022174

FINANCIAL STATEMENTS

16 ACQUISITION & DISPOSALS CONTINUED

Intangible assets

Acquired identifiable intangible assets include £574.4m in respect of brands, £595.1m in respect of customer relationships

and £8.5m in respect of licences. Software and technology of £226.2m, inclusive of a fair value uplift of £70.6m has also been

recognised on acquisition. Management considers the residual goodwill of £785.6m to represent a number of factors including

the future growth of the William Hill business and the potential to achieve buyer specific synergies and workforce.

The fair value of the brand assets was assessed by considering the benefit to the Group’s future revenue of the acquired brand

and assessing the royalty costs that would be incurred in deriving the same benefit. The key assumptions in the assessments are

the forecast revenue growth and royalty cost applied. A royalty cost of 5.0% of revenue was applied. The fair value of the customer

relationships was assessed using the multi-period excess earnings methodology. The key assumption in the assessments is customer

retention rates. The fair value of the licences has been derived by calculation a replacement cost for each individual

licence. A 5% increase/decrease in estimated customer churn rates would (decrease)/increase the fair value of customer

relationships by £(123.0)m/£176.0m respectively.

Provisions and contingent liabilities

A contingent liability with a fair value of £80.6m has been recognised on acquisition to reflect the possible future economic

outflow resulting from customer claims in Austria. The contingent liability has been fair valued in line with IFRS 3 based on the

expected cash outflow of settled claims and recognised on the basis that it is a possible future liability. Additional provisions

of £115.2m have been recognised based on pre-existing provisions within William Hill. The carrying amount at acquisition was

assessed to be the fair value. Refer to note 22 for further details on these acquired provisions.

Other fair value adjustments

A fair value uplift of £1.1m has been recognised on property, plant and equipment, representing the depreciated replacement

cost of the assets in comparison to their pre-acquisition net book value.

A fair value uplift of £0.8m has been recognised on the acquired right-of-use assets, representing favourable market positions

on William Hill’s portfolio of leases. This has been offset by a £6.8m reduction to the right-of-use asset and £6.4m reduction

to the lease liability that reflects matching the right-of-use asset to the new fair value of the lease liability, based on a new

discount rate for the liability at the acquisition date.

The fair value of the Group’s investment in SIS (refer to note 14) was increased by £27.4m to a fair value of £39.0m, reflecting

the Group’s holding and the estimated market value of the entity at the acquisition date.

The fair value of the Group’s outstanding listed debt was increased by £7.1m, reflecting the current market price of the debt

at acquisition date.

Deferred tax liabilities of £216.9m have been recognised on the resultant fair value uplifts to assets.

The fair value of all other assets and liabilities acquired are considered to be equal to their net book value as at the acquisition date.

Disposals

On 7 July 2022, the Group disposed of its entire Bingo business to Saphalata Holdings Ltd., a member of the Broadway Gaming

group, for a total cash consideration of £37.4m (US$45.25m), out of which £35.7m was paid on completion and a further £1.7m

will unconditionally be paid in one year. As at 30 June 2022, the Group reclassified the Bingo business assets and liabilities as

‘Held for sale’, at which time an impairment loss of £11.2m was recognised on the Bingo goodwill, representing the difference

between the carrying value of the businesses net assets and the fair value at the date of reclassification to held for sale.

2022

£ million

Consideration received 35.7

Deferred consideration 1.7

Less:

Cash disposed of (3.2)

Net proceeds on disposal 34.2

Less:

Net assets disposed of (excluding cash):

Intangible assets (37.6)

Trade and other receivables (0.5)

Trade and other payables 3.3

Net assets disposed of (excluding cash) (34.7)

Loss on disposal (0.5)

888 Holdings PLC Annual Report & Accounts 2022 175

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

17 ASSETS HELD FOR SALE

In the year, the Group began the process of auctioning 75 freehold properties in a sale and leaseback transaction. At the year

end, all properties were underwritten with a reserve price and were awaiting auction dates in the first quarter of 2023. As a result

of the proposed sales, the properties have been reclassified as assets held for sale. The carrying value of the properties prior to

reclassification was £7.4m. Upon classification as assets held for sale, the fair value of the properties was assessed against the

carrying value, resulting in a £0.5m impairment of the overall property value, which has been classified within exceptional items

in the consolidated income statement. The properties classified as held for sale are part of the Retail segment.

18 LEASES

The Group recognises a right-of-use asset and a lease liability at the lease commencement date.

The lease liability is initially measured at the present value of the lease payments that have not been paid at the

commencement date, discounted using an appropriate discount rate. The discount rate used to calculate the lease liability is

the rate implicit in the lease, if it can be readily determined, or the lessee’s incremental borrowing rate if not. The Group uses

an incremental borrowing rate for its leases, which is determined based on a series of inputs including a risk-free rate based

on our debt portfolio as well as country-specific adjustments.

A right-of-use asset is also recognised equal to the lease liability and depreciated over the period from the commencement

date to the earlier of, the end of the useful life of the right-of-use asset or the lease term.

The Group has assessed the lease term of properties within its Retail estate to be up to the first available contractual break

within the lease. The Group has deemed that it cannot be reasonably certain that it will continue beyond this time given the

continued uncertainty surrounding the Retail business.

The Group note that leases not included due to either being low value or having a term of less than 12 months are

deemed immaterial.

The Group has a small number of sublet properties which have been assessed in accordance with IFRS 16 and have been

deemed immaterial. The accounting policy applied to these small number of sublet properties can be seen on page 160.

The Group will continue to monitor both the above scenarios and disclose these if they are deemed material to users of the

Annual Report and Accounts.

2022

£ million

2021

£ million

Right-of-use asset depreciation 18.4 5.3

Finance costs 3.0 0.9

A maturity analysis of the contractual undiscounted cash flows is as follows:

2022

£ million

2021

£ million

Due within one year 29.4 5.0

Due between one and two years 23.0 4.3

Due between two and three years 17.3 4.1

Due between three and four years 13.4 4.1

Due between four and five years 7.5 4.1

Due beyond five years 8.7 3.9

19 TRADE AND OTHER RECEIVABLES

2022

£ million

2021

£ million

Trade receivables 56.7 19.2

Other receivables 18.4 11.3

Loans receivable 3.9 —

Prepayments 32.1 13.3

Restricted short-term deposits 21.6 7.0

Current trade and other receivables 132.7 50.8

Non-current prepayments 6.2 5.8

138.9 56.6

Restricted short-term deposits represent amounts held by banks primarily to support guarantees in respect of regulated

markets licence requirements and office leases.

Non-current prepayments refer to prepayment to partners in relation to costs and certain fees to be recognised over a

period longer than 12 months.

The carrying value of trade receivables and other receivables approximates to their fair value as the credit risk has been

addressed as part of impairment provisioning and, due to the short-term nature of the receivables they are not subject to

ongoing fluctuations in market rates. Note 24 provides credit risk disclosures on trade and other receivables.

888 Holdings PLC Annual Report & Accounts 2022176

FINANCIAL STATEMENTS

20 CASH AND CASH EQUIVALENTS

2022

£ million

2021

£ million

Cash and cash equivalents 317.6 189.4

Less:

Customer deposits 141.3 60.1

Cash (excluding customer balances) 176.3 129.3

Customer deposits represent bank deposits matched by liabilities to customers of an equal value (see note 21).

21 TRADE AND OTHER PAYABLES

2022

£ million

2021

£ million

Trade payables 61.1 26.8

Accrued expenses 208.0 87.6

Other payables 98.9 30.9

Total trade and other payables 368.0 145.3

The carrying value of trade and other payables approximates to their fair value given the short maturity date of these balances.

Customer deposits of £141.3m (31 December 2021: £60.1m) represents deposits received from customers, customer winnings

and progressive prize pools. This is offset by an equivalent or greater amount of cash held, which is included in cash and

cash equivalents (see note 20).

22 PROVISIONS

Indirect tax

provision

£ million

Legal and

regulatory

£ million

Shop closure

provision

£ million

Other

restructuring

costs

£ million

Total

£ million

At 31 December 2021 — 19.0 — — 19.0

Acquired on acquisition 1 July 2022 57.0 111.5 5.8 4.5 178.8

Charged/(credited) to profit or loss

Additional provisions recognised 12.7 12.3 0.8 — 25.8

Provisions released to profit and loss (3.2) (5.1) — — (8.3)

Utilised during the year (6.0) (9.9) (1.8) (0.8) (18.5)

Foreign exchange differences 1.2 (0.3) — — 0.9

At 31 December 2022 61.7 127.5 4.8 3.7 197.7

Customer claims provisions of £86.2m within legal and regulatory are classified as non-current. The remaining provisions are

all classified as current.

Indirect tax provision

As part of the acquisition of William Hill, the Group acquired a provision relating to a gaming tax liability in Austria, where

the Austrian tax authority believes that foreign gaming companies should be liable to pay gaming taxes in Austria. Post-

acquisition, the Group has continued to provide for the gaming taxes including interest, as management considers that an

outflow is probable. The Group is in constructive discussions with the Austrian tax authority over the timing of settlement.

Legal and regulatory provisions

The Group has recorded a provision in respect of legal and regulatory matters, including customer claims, and updated it

to reflect the Group’s revised assessment of these risks in light of developments arising during 2022 such that this represents

management’s best estimate of probable cash outflows related to these matters.

The industry in which the Group operates is subject to continuing scrutiny by regulators and other governmental authorities,

which may, in certain circumstances, lead to enforcement actions, sanctions, fines and penalties or the assertion of private

litigations, claims and damages. Within this provision, there is a provision acquired relating to a periodic compliance

assessment undertaken by the UK Gambling Commission (“UKGC”) in July and August 2021 of the William Hill business. William

Hill has been subject to an ongoing licence review and has addressed certain action points raised by the UKGC in relation

to William Hill’s social responsibility and anti-money laundering obligations. The Group has agreed a regulatory settlement

of £19.2m, including divestments of £0.7m. This provision was acquired at 1 July 2022 and is expected to be settled in 2023.

888 Holdings PLC Annual Report & Accounts 2022 177

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

22 PROVISIONS CONTINUED

Legal and regulatory provisions continued

In common with other businesses in the gambling sector, the Group receives claims from consumers relating to the provision

of gambling services. Claims have been received from consumers in a number of (principally European) jurisdictions and

allege either failure to follow responsible gambling procedures, breach of licence conditions or that underlying contracts in

question are null and void given local licencing regimes. The Group expenses consumer claims as they are resolved or finally

determined in consumers’ favour and provides for such claims where an outcome in favour of the consumers in question is

probable.

Within this provision, there is a provision for customer claims in Austria where the Business has been subject to a particular

acceleration of claims since 2020 following marketing campaigns by litigation funders in that jurisdiction. Claims have

continued to be received throughout 2021 and 2022 at a broadly consistent rate with a slight acceleration across 2021 and

2022. Consumers who have obtained judgement against the Business’s entities in the Austrian courts have sought to enforce

those judgements in Malta and Gibraltar. These are being defended on the basis of a public policy argument. The provisions

held for the Group relating to these claims is £86.2m, which includes a provision of £80.6m relating to the William Hill and Mr

Green brands and £5.6m relating to 888.

The £80.6m relating to the William Hill and Mr Green brands was recognised on acquisition representing the fair value of the

contingent liability at that point in time, recognised on the basis that it was a possible future liability and in line with IFRS 3.

Please refer to note 16 for further detail.

Since acquisition, there has been an alignment in strategy and accounting treatment with William Hill and Mr Green aligning

to the 888 strategy. William Hill and Mr Green have therefore recognised a provision for probable legal claims they expect

to receive and a contingent liability for possible legal claims they may receive. As at 31 December 2022, the provision is

estimated at £67.0m and the contingent liability is estimated at £13.5m (note 31). Note that the provision is less than the

liability recognised on acquisition but the liability recognised on acquisition is not released to the income statement until

the final outcome of the customer claims is resolved and as such the liability of £80.6m remains the balance provided.

The calculation of the customer claims liability includes provision for both legal fees and interest but is gross of gaming tax.

Management have assessed that it is probable as opposed to virtually certain that the tax will be reclaimed and therefore a

contingent asset of up to £24.3m has been disclosed for the tax reclaims, please refer to note 31 for further detail.

The timing and amount of the outflows is ultimately determined by the settlement reached with the relevant authority.

There has also been a similar uptick in claims in Germany, but to a much lesser extent.

Shop closure provisions

As a result of the acquisition of William Hill, the Group holds provisions relating to the associated costs of closure of 713 shops

in 2019, 119 shops in 2020, and certain shops that ceased to trade as part of normal trading activities.

Other restructuring costs

The Group has recognised certain provisions for staff severance as a result of restructuring due to the acquisition of

William Hill.

23 BORROWINGS

Interest

rate

% Maturity

31 December

2022

£ million

Borrowings at amortised cost

Bank facilities

€473.5m term loan facility EURIBOR + 5.5% 2028 392.6

$575.0m term loan facility CME term SOFR + 5.35% 2028 420.7

£150.0m Equivalent Multi-Currency Revolving Credit Facility — 2028 —

Loan Notes

€582.0m Senior Secured Fixed Rate Notes 7.56 2027 498.6

€450.0m Senior Secured Floating Rate Notes EURIBOR + 5.5% 2028 379.9

£350.0m Senior Unsecured Notes 4.75 2026 10.5

Total Borrowings 1,702.3

Less: Borrowings as due for settlement in 12 months 4.8

Total Borrowings as due for settlement after 12 months 1,697.5

The Group had no borrowings in 2021 and as such no comparative is presented in the above table.

888 Holdings PLC Annual Report & Accounts 2022178

FINANCIAL STATEMENTS

23 BORROWINGS CONTINUED

Bank facilities

Term loan facilities

In July 2022, the Group entered into a Senior Facilities Agreement in connection with the William Hill Group acquisition, under

which the following term loan facilities were made available:

• a 6-year euro-denominated bullet term facility of €473.5m, of which €6.4m was repaid in September 2022.

• a 6-year sterling-denominated delayed-draw bullet term facility of £351.8 million which was partially drawn in September

2022 (“GBP Term Loan”) and used to partially prepay the William Hill Group’s £350m 4.75% Senior Unsecured Notes due

2026 and partially prepay the Group’s euro-denominated bullet term facility.

• a 6-year US Dollar-denominated term facility of $500.0m.

In December 2022, the GBP Term Loan was prepaid and partially replaced with a $75.0m increase under the Group’s 6-year

US Dollar-denominated term facility, with the remaining amount replaced with senior secured note issuances.

At 31 December 2022, the following amounts were outstanding under the term facilities made available to the Group under

the Senior Facilities Agreement:

• €467.1 million under the Group’s 6-year euro-denominated term facility.

• $573.7 million under the Group’s 6-year US Dollar-denominated term facility

Loan notes

Senior Secured Notes

(i) €582m 7.558% Senior Secured Fixed Rate Notes due July 2027

In July 2022, as part of the William Hill Group acquisition funding, the Group issued €400m of guaranteed senior secured

fixed rate notes and used the net proceeds to finance the William Hill Group acquisition. The notes, which are guaranteed by

certain members of the Group and certain of the Group’s operating subsidiaries, mature in July 2027.

In December 2022, a further €182m in principal amount was issued under the same terms as the initial €400m issuance and

used to partially refinance the GBP Term Loan.

(ii) €450m Senior Secured Floating Rate Notes due July 2028

In July 2022, the Group issued €300m of guaranteed senior secured floating rate notes and used the net proceeds to

partially finance the William Hill Group acquisition. The notes, which are guaranteed by certain members of the Group and

certain of the Group’s operating subsidiaries, mature in July 2028.

In December 2022, a further €150m in principal amount was issued under the same terms as the initial €300m issuance to

partially refinance the GBP Term Loan.

Senior Unsecured Notes

£350m 4.875% Senior Unsecured Fixed Rate Notes due 2023 & £350m 4.75% Senior Unsecured Fixed Rate

Notes due 2026

The Group acquired two separate listed Senior Unsecured notes, due 2023 and 2026 respectively as at 1 July 2022. The

acquisition triggered a change in control and the exercise of a put option by a number of Noteholders (refer below). The

£350m 4.875% Senior Unsecured Notes due 2023 were settled in full and, on 22 September 2022, Noteholders of £339.5m out

of £350.0m 4.75% Senior Unsecured Notes due 2026 took the option to exercise. As a result, this reduced the £350.0m 4.75%

Senior Unsecured Notes due 2023 to £10.5m at 31 December 2022. The cash purchase price of both notes was equal to

101 per cent of the principal amount together with the interest accrued.

Finance fees and associated costs incurred on the issue of both notes were held in the William Hill Statement of Financial

Position at acquisition, which were subsequently fair valued which led to an increase of £7.1m, reflecting the current market

price of the debt at acquisition date. This is being amortised over the life of the respective notes using the effective interest

rate method. On redemption of the Notes, any unamortised fees were written off to profit and loss as exceptional costs

(see note 3).

Change of control

Following the occurrence of a change of control, either (i) each lender under the Senior Facilities Agreement shall be entitled

to require prepayment of outstanding amounts and cancellation of its commitments within a prescribed time period or (ii)

the Group may elect that all outstanding undrawn commitments of each lender shall be cancelled and outstanding drawn

commitments shall become due and payable.

In addition, the Group will be required to make an offer to purchase all of the Fixed Rate Notes, the Floating Rate Notes and

the 4.75% senior unsecured notes due 2026 as a result of such change of control at a price in cash equal to 101% of the

aggregate principal amount thereof plus accrued and unpaid interest.

888 Holdings PLC Annual Report & Accounts 2022 179

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23 BORROWINGS CONTINUED

Undrawn credit facilities

At 31 December 2022, the Group had the following undrawn credit facilities:

£150m Equivalent Multi-Currency Revolving Credit Facility

In July 2022, as part of the William Hill Group acquisition, the Group entered into a new Senior Facilities Agreement under

which its £50m revolving credit facility was replaced with a multi-currency revolving credit facility. The replacement facility

has an aggregate principal amount of £150m with a five and a half year maturity (maturing on 31 December 2027). The

drawn balance on this facility at 31 December 2022 was £nil.

Financial Covenant

The Revolving Credit Facilities are subject to a Senior Facilities Agreement whereby any applicable revolving Incremental

Senior Facilities (together the “Financial Covenant Facilities”) are tested at the Financial year end to ensure that they do

not exceed a pre-agreed threshold to be agreed with the Mandated Lead Arrangers prior to the entry into the Senior

Facilities Agreement.

The directors are satisfied that, at the year-end, the net leverage ratio has not exceeded the pre-agreed threshold and,

as a consequence, the Financial Covenants have not been breached.

Overdraft facility

In July 2022, as part of the William Hill Group acquisition, the Group acquired an overdraft facility with National Westminster

Bank plc of £5.0m. The balance on this facility at 31 December 2022 was £nil.

Weighted average interest rates

The weighted average interest rates paid, including commitment fees, were as follows:

31 December

2022

€473.5m term loan facility 7.25%

$575.0m term loan facility 11.47%

€582.0m Senior Secured Fixed Rate Notes 8.47%

€450.0m Senior Secured Floating Rate Notes 7.58%

£350.0m Senior Unsecured Fixed rate Notes 4.75%

The Group had no borrowings in 2021 and as such no comparative is presented in the above table.

Net debt reconciliation

Debt

Opening

£m

Inflows

£m

Acquired

£m

Outflows

£m

Fees on

debt

£m

Non-cash

£m

adjustment

£m

Total

£m

2023 Senior Unsecured Notes — — 352.3 (349.0) — — (3.3) — —

2026 Senior Unsecured Notes — — 351.9 (339.0) — — (2.4) — 10.5

£351.8m term loan facility — 347.0 — (347.0) — — — — —

£461.5m asset bridge loan — — 461.5 (461.5) — — — — —

€473.5m term loan facility — 420.4 — (5.7) (23.5) 1.7 — (0.3) 392.6

$575.0m term loan facility — 479.1 — (1.0) (57.4) 3.5 — (3.6) 420.6

€582.0m Senior Secured

Fixed Rate Notes — 517.0 — — (18.9) 0.9 — (0.3) 498.7

€450.0m Senior Secured

Floating Rate Notes — 399.6 — — (20.3) 0.9 — (0.3) 379.9

— 2,163.1 1,165.7 (1,503.2) (120.1) 7.0 (5.7) (4.5) 1,702.3

888 Holdings PLC Annual Report & Accounts 2022180

FINANCIAL STATEMENTS

24 FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks. Financial risk management is primarily carried out by the

Group’s Treasurer with reference to risk management policies approved by the Board and supervised by the Chief Financial

Officer. The Board approves written principles for risk management. The principal financial risks faced by the Group

comprise liquidity risk, financing risk, credit risk, interest rate risk, currency risk and pensions risk. These risks are managed

as described below.

The main financial instruments used by the Group, on which financial risk arises, are as follows:

• Cash and cash equivalents;

• Trade and other receivables;

• Investment in associates

• Trade and other payables;

• Customer deposits;

• Lease liabilities;

• Borrowings;

• Derivative financial instruments;

Detailed analysis of these financial instruments is as follows:

2022

£ million

2021

£ million

Assets at amortised cost

Investment in associates (note 14) 38.4 —

Cash and cash equivalents (note 20) 317.6 189.4

Trade and other receivables (note 19) 100.6 50.8

Designated cash flow hedging relationships

Derivative assets designated and effective as cash flow hedging instruments: (note 25)

– Cross-currency swaps 17.7 —

– Interest rate swaps 0.9 —

Total financial assets 475.2 240.2

Non-financial assets 2,476.3 159.9

Total assets 2,951.5 400.1

Fair value through the Income Statement

Ante post bets (note 25) 7.8 —

Liabilities at amortised cost

Borrowings (note 23) 1,702.3 —

Trade and other payables (note 21) 160.0 145.3

Customer deposits (note 21) 141.3 60.1

Lease liabilities (note 18) 89.0 22.9

Designated cash flow hedging relationships

Derivative assets designated and effective as cash flow hedging instruments: (note 25)

– Cross-currency swaps 30.4 —

– Interest rate swaps — —

Total financial liabilities 2,130.8 228.3

Non-financial liabilities 661.5 47.3

Total liabilities 2,792.3 275.6

Net assets 159.2 124.5

888 Holdings PLC Annual Report & Accounts 2022 181

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

24 FINANCIAL RISK MANAGEMENT CONTINUED

Capital management and financing risk

The Group seeks to maintain an appropriate capital structure which enables it to continue as a going concern, supports its

business strategy and takes into account the wider economic environment. The Group’s capital comprises equity and debt

finance, and these elements are managed to balance the requirements of the Business and the interests of debt providers.

The Group manages its capital structure through cash flows from operations, the raising or repayment of debt and the

raising of equity capital from investors.

Financing risk is the risk that the Group is unable to access sufficient finance to refinance its debt obligations as they fall due.

The Group manages this risk by maintaining a balance between different funding sources including equity and debt. It seeks

to mitigate its debt financing risk by diversifying its sources of debt capital. The Board also seeks to mitigate the Group’s

refinancing risk by having an appropriately balanced debt maturity profile.

Credit risk

The Group is exposed to credit risk from counterparties defaulting on their obligations, resulting in financial loss to the Group.

It arises in relation to transactions with commercial counterparties and financial institutions. It also arises from customers who

have been granted access to credit facilities.

The Group manages its counterparty risk by closely monitoring and, where appropriate, limiting the amount that can

be deposited or accumulated with any one counterparty. The Group will only deposit funds with pre-approved financial

institutions with specified minimum credit ratings or strong balance sheet. The Group’s policy is to mitigate its credit risk with

respect to derivative transactions by using a number of different counterparties for material transactions.

Trade receivables

The Group’s credit risk is primarily attributable to trade receivables, most of which are due from the Group’s payment service

providers (PSP). These are third party companies that facilitate deposits and withdrawals of funds to and from customers’

virtual wallets with the Group. These are mainly intermediaries that transact on behalf of credit card companies.

The risk is that a PSP would fail to discharge its obligation with regard to the balance owed to the Group. The Group reduces

this credit risk by:

• Monitoring balances with PSPs on a regular basis;

• Arranging for the shortest possible cash settlement intervals;

• Replacing rolling reserve requirements, where they exist, with a Letter of Credit by a reputable financial institution;

• Ensuring a new PSP is only contracted following various due diligence and “Know Your Customer” procedures; and

• Ensuring policies are in place to reduce dependency on any specific PSP and as a limit any concentration of risk.

The Group considers that based on the factors above and on extensive past experience, the PSP receivables are of good

credit quality and there is a low level of potential bad debt as at the year-end amounting to £0.4m arising from a PSP failing

to discharge its obligation (2021: £0.4m). This has been charged to the consolidated income statement.

An additional credit risk the Group faces relates to customers disputing charges made to their credit cards (“chargebacks”)

or any other funding method they have used in respect of the services provided by the Group. Customers may fail to fulfil

their obligation to pay, which will result in funds not being collected. These chargebacks and uncollected deposits, when

occurring, will be deducted at source by the PSPs from any amount due to the Group. As such the Group provides for these

eventualities by way of an impairment provision based on analysis of past transactions. This provision is set off against trade

receivables and at 31 December 2022 was £1.0m (2021: £1.1m).

The Group’s in-house Fraud and Risk Management department carefully monitors deposits and withdrawals by following

prevention and verification procedures using internally-developed bespoke systems integrated with commercially-available

third party measures.

Cash and cash equivalents

The Group controls its cash position from its Gibraltar headquarters. Subsidiaries in its other main locations maintain minimal

cash balances as required for their operations. Cash settlement proceeds from PSPs, as described above, are paid into bank

accounts controlled by the Treasury function in Gibraltar.

The Group holds the majority of its funds with highly reputable financial institutions and will not hold funds with financial

institutions with a low credit rating save for limited balances for specific operational needs. The Group maintains its cash

reserves in highly liquid deposits and regularly monitors interest rates in order to maximise yield.

Client funds

Client funds are matched by customer liabilities and progressive prize pools of an equal value.

888 Holdings PLC Annual Report & Accounts 2022182

FINANCIAL STATEMENTS

24 FINANCIAL RISK MANAGEMENT CONTINUED

Credit risk continued

Restricted short-term deposits

Restricted short-term deposits are short-term deposits held by banks primarily to support guarantees in respect of regulated

markets licence requirements and office leases.

The Group’s maximum exposure to credit risk is the amount of financial assets presented above, totalling £479.7m

(2021: £240.2m).

Liquidity risk

Liquidity risk is the risk that the Group has insufficient funds available to settle its liabilities as they fall due. The Group

generates strong operating cash flows and aims to maintain sufficient cash balances to meet its anticipated working

capital requirements based on regularly updated cash flow forecasts. Liquidity requirements that cannot be met from

operational cash flow or existing cash resources would be satisfied by drawings under the Group’s revolving credit facility and

overdraft facility.

The following table details the contractual maturity analysis of the Group’s financial liabilities (undiscounted payments):

2022

demand

£ million

Less than

1 year

£ million

1 to 5

years

£ million

than

5 years

£ million

Total

£ million

Trade and other payables — 160.0 — — 160.0

Customer deposits 141.3 — — — 141.3

Borrowings — 129.9 1,062.7 1,319.5 2,512.1

Derivatives and embedded derivatives 7.8 14.2 273.3 — 295.3

Lease liabilities – IFRS 16 — 29.4 61.0 8.7 99.1

149.1 333.5 1,397.0 1,328.2 3,207.8

2021

demand

£ million

Less than

1 year

£ million

1 to 5

years

£ million

than

5 years

£ million

Total

£ million

Trade and other payables — 145.3 — — 145.3

Customer deposits 60.1 — — — 60.1

Lease liabilities – IFRS 16 — 5.0 16.6 3.9 25.5

60.1 150.3 16.6 3.9 230.9

Market risk

Currency risk

A substantial part of the Group’s deposits and revenues are generated in Pounds Sterling (‘GBP’), Euro (‘EUR’) and other

currencies, and its operating expenses are largely incurred in local currencies, primarily EUR, Israeli New Shekel (‘ILS’),

US Dollar (‘USD’), Canadian Dollar (‘CAD’) and Romanian leu (‘RON’), with incremental exposure to operating expenses in

Swedish krona and Polish Złoty (‘PLN’). The Group has debt servicing costs, which are denominated in USD and EUR. As a

result of this, the Group is exposed to the impact of foreign currency fluctuations. The Group mitigates its exposure to the

impact of foreign exchange fluctuations on its cost base by adopting policies to hedge certain costs. During 2022, the Group

entered into FX or cross currency swaps in order to hedge its ongoing USD and EUR exposure under the Senior Facilities

Agreement and its ongoing EUR exposure under the Existing Notes and Additional Notes. However, there can be no assurance

that such hedging will eliminate the potentially material adverse effect of such fluctuations.

The Group’s financial risk arising from exchange rate fluctuations is mainly attributed to:

• Mismatches between customer deposits, which are predominantly denominated in GBP, and the net receipts from

customers, which are settled in the currency of the customer’s choice.

• Mismatches between reported revenue, which is mainly generated in GBP (the Group’s reporting currency and the

functional currency of the majority of its subsidiaries), and a significant portion of deposits settled in local currencies.

• Expenses that are denominated in foreign currencies.

The Group continually monitors the foreign currency risk and takes steps, where practical, to ensure that the net exposure

is kept to an acceptable level. This includes the potential use of foreign exchange forward contracts designed to fix the

economic impact of known liabilities when considered appropriate.

888 Holdings PLC Annual Report & Accounts 2022 183

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

24 FINANCIAL RISK MANAGEMENT CONTINUED

Market risk continued

Currency risk continued

The tables below detail the monetary assets and liabilities by currency:

2022

EUR

£ million

USD

£ million

Other

£ million

Total

£ million

Cash and cash equivalents 119.2 55.1 143.3 317.6

Trade and other receivables 47.7 12.3 40.6 100.6

Derivatives and embedded derivatives 15.4 3.2 — 18.6

Monetary assets 182.3 70.6 183.9 436.8

Trade and other payables (70.2) (43.1) (46.7) (160.0)

Customer deposits (43.0) (50.5) (47.8) (141.3)

Borrowings (1,271.1) (420.7) (10.5) (1,702.3)

Derivatives and embedded derivatives (10.5) (21.0) (6.7) (38.2)

Lease liabilities – IFRS 16 (7.5) (0.5) (81.0) (89.0)

Monetary liabilities (1,402.3) (535.8) (192.7) (2,130.8)

Net financial position (1,220.0) (465.2) (8.8) (1,694.0)

2021

EUR

£ million

USD

£ million

Other

£ million

Total

£ million

Cash and cash equivalents 48.4 70.9 70.1 189.4

Trade and other receivables 17.2 3.7 29.9 50.8

Monetary assets 65.6 74.6 100.0 240.2

Trade and other payables (23.2) (39.3) (82.8) (145.3)

Customer deposits (15.0) (28.5) (16.6) (60.1)

Lease liabilities – IFRS 16 (8.3) (0.1) (14.5) (22.9)

Monetary liabilities (46.5) (67.9) (113.9) (228.3)

Net financial position 19.1 6.7 (13.9) 11.9

Sensitivity analysis

The table below details the effect on profit before tax of a 10% strengthening (and weakening) in the GBP exchange rate

at the balance sheet date for balance sheet items denominated in Euros:

EUR

£ million

10% strengthening 28.9

10% weakening (28.9)

There is no comparative shown as the Group’s balance sheet was translated from USD in that year.

Interest rate risk

The Group’s exposure to interest rate risk is limited to the interest-bearing deposits in which the Group invests surplus funds.

The Group’s policy is to invest surplus funds in low-risk money market funds and in interest bearing bank accounts. The Group

arranges for excess funds to be placed in these interest-bearing accounts with its principal bankers in order to maximise

availability of funds for investments.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and

borrowings affected. With all other variables held constant, the Group’s profit before tax is affected through the impact on

floating rate borrowings, as follows:

2022

Increase of

100 basis

points

£ million

Decrease of

100 basis

points

£ million

Increase/(decrease) in profit 3.4 3.4

Increase/(decrease) in equity reserves 3.4 3.4

The Group had no borrowings in 2021 and therefore had no exposure to interest rate risk .

888 Holdings PLC Annual Report & Accounts 2022184

FINANCIAL STATEMENTS

24 FINANCIAL RISK MANAGEMENT CONTINUED

Cross Currency Swaps and Interest Rate Swaps

The Group has executed a series of USD to GBP cross-currency swaps and EUR to GBP cross-currency swaps in order to

hedge certain of its USD and floating rate exposure under Euro and USD debt.

As at 31 December 2022, the Group had entered into cross currency swaps in total of US$ 407m and €482m to hedge both

the currency risk and interest rate risk. In addition, the Group entered into an Interest swap of €150m to hedge the interest

rate risk.

25 FINANCIAL INSTRUMENTS

On acquisition, under IFRS 3 ‘Business Combinations’, the assets and liabilities of William Hill were recorded at fair value. Refer

to note 16 for details of values and valuation methods used.

The hierarchy (as defined in IFRS 13 ‘Fair Value Measurement’) of the Group’s financial instruments carried at fair value as at

31 December 2022 was as follows:

2022

Contractual

/notional

amount

£ million

Level 1

£ million

Level 2

£ million

Level 3

£ million

Financial assets

Cross-currency swaps 397.1 — 17.7 —

Interest rate swaps 132.2 — 0.9 —

529.3 — 18.6 —

Financial liabilities

Cross-currency swaps 365.3 — 30.4 —

Interest rate swaps — — — —

Ante post bet liabilities — — — 7.8

Contingent consideration (note 16) 100.0 — — 0.4

465.3 — 30.4 8.2

The Group did not have any financial instruments carried at fair value during the year ended 31 December 2021.

Ante post bets

Ante post bets are a liability arising from an open position at the period end date in accordance with the Group’s

accounting policy for derivative financial instruments. Ante post bets at the period end totalled £7.8m and are classified

as current liabilities.

Ante post bet liabilities are valued using methods and inputs that are not based upon observable market data and all fair

value movements are recognised in revenue in the Income Statement. Although the final value will be determined by future

betting outcomes, there are no reasonably possible changes to assumptions or inputs that would lead to material changes

in the fair value determined. The principal assumptions relate to the Group’s historical gross win margins by betting markets

and segments. Although these margins vary across markets and segments, they are expected to stay broadly consistent

over time, only varying in the short term. The gross win margins are reviewed annually at period end. As at 31 December 2022,

the gross win margins ranged from 2%-25%.

A reconciliation of movements in the ante post bets liability in the year is provided below.

Ante post

bet

liabilities

£ million

Total

£ million

At 31 December 2021 — —

Acquired via business combination 3.5 3.5

To profit or loss 4.3 4.3

At 31 December 2022 7.8 7.8

888 Holdings PLC Annual Report & Accounts 2022 185

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

25 FINANCIAL INSTRUMENTS CONTINUED

Hedging activities

The table below illustrates the effects of hedge accounting on the consolidated statement of financial position and

consolidated income statement by disclosing separately by risk category each type of hedge and the details of the

associated hedging instrument and hedge item. These are for items designated as in a cash flow hedging relationship.

Carrying

amount

Change in

fair value

in period for

calculating

ineffectiveness

(hedging

instrument)

Cash

settlements

and accruals

in the period

(hedging

instrument)

Change in

fair value

in period for

calculating

ineffectiveness

(hedged item)

Cash

settlements

and accruals

in the period

(hedged

item)

Hedge

ineffectiveness

in the period

£ million £ million £ million £ million £ million £ million

Interest rate swaps

EUR trades 1.0 1.0 — 0.9 — (0.1)

Total 1.0 1.0 — 0.9 — (0.1)

Cross-currency swaps

EUR trades 5.1 5.1 (1.4) 4.7 (1.4) (0.4)

USD trades (17.8) (17.8) (2.3) (18.7) (2.3) (0.9)

Total (12.7) (12.7) (3.7) (14.0) (3.7) (1.3)

The Group did not have any hedge accounting during the year ended 31 December 2021.

Cash flow hedging reserve

The following table identifies the movements in the cash flow hedging reserve during the year for items designated as in

a cash flow hedging relationship:

Reclassification in the period

Opening

balance

Change in

fair value

recorded

in OCI

Fixed

assets

Interest

expense

remeasurement

Missed

forecast

Closing

balance

£ million £ million £ million £ million £ million £ million £ million

Interest rate swaps

EUR trades — (0.8) — — — — (0.8)

Total — (0.8) — — — — (0.8)

Cross-currency swaps

EUR trades — (3.3) — (1.4) 12.7 — 8.0

USD trades — 22.2 — (3.4) (11.7) — 7.2

Total — 18.9 — (4.8) 1.0 — 15.2

Cost of hedging reserve

The following table identifies the movements in the cash flow hedging reserve during the year for items designated as in a

cash flow hedging relationship:

Opening balance

Change in fair value

recorded in OCI

Reclassifications

during the period Closing balance

Time

value

£m

Currency

basis

£m

Time

value

£m

Currency

basis

£m

Time

value

£m

Currency

basis

£m

Time

value

£m

Currency

basis

£m

Designated cash

flow hedging

relationships

Cross-currency

swaps

EUR trades — — — (0.1) — — — (0.1)

USD trades — — — (1.2) — 0.3 — (0.9)

Total — — — (1.3) — 0.3 — (1.0)

888 Holdings PLC Annual Report & Accounts 2022186

FINANCIAL STATEMENTS

25 FINANCIAL INSTRUMENTS CONTINUED

Contractual maturity analysis

The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual

maturities for net and gross settled derivative financial instruments.

The amounts disclosed in the table are the contractual undiscounted cash flows:

2022

demand

£ million

Less than

1 year

£ million

1 to 5

years

£ million

than

5 years

£ million

Total

£ million

Interest rate swaps — — — — —

Cross currency swaps

EUR trades — (6.2) 316.9 — 310.7

USD trades — (8.0) (43.6) — (51.6)

Total — (14.2) 273.3 — 259.1

26 DEFERRED TAX

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for income tax purposes. The Group’s deferred tax assets

and liabilities resulting from temporary differences, some of which are expected to be settled on a net basis, are as follows:

As at

1 January

2022

£ million

Acquisition of

William Hill

£ million

Prior year

adjustments

£ million

Exchange

differences

£ million

Credit/

(charge)

to income

£ million

Exceptional

credit

to income

£ million

Exceptional

charge

to OCI

£ million

As at

31 December

2022

£ million

Fixed asset

temporary

differences 1.6 0.6 3.0 0.3 (6.6) — — (1.1)

Intangible

assets (2.7) (252.0) 1.9 0.7 12.7 8.4 — (231.0)

Other

temporary

differences 1.4 3.5 (0.8) (0.1) (4.9) — (0.6) (1.5)

Restricted

interest — 11.6 13.1 — (10.3) — — 14.4

Tax credits — — 0.4 (0.2) (0.2) — — —

Tax losses — 0.1 — — 3.9 — — 4.0

Total 0.3 (236.2) 17.6 0.7 (5.4) 8.4 (0.6) (215.2)

As at

1 January

2021

£ million

Prior year

adjustments

£ million

Exchange

differences

£ million

Credit/

(charge)

to income

£ million

Exceptional

credit

to income

£ million

Exceptional

charge

to OCI

£ million

As at

31 December

2021

£ million

Fixed asset temporary

differences 1.1 — — 0.5 — — 1.6

Intangible assets (2.6) — — (0.1) — — (2.7)

Other temporary differences 1.8 — — (0.2) — (0.2) 1.4

Restricted interest — — — — — — —

Tax credits — — — — — — —

Tax losses — — — — — — —

Total 0.3 — — 0.2 — (0.2) 0.3

2022

£ million

2021

£ million

Reflected in the statement of financial position as follows:

Deferred tax assets 5.2 2.2

Deferred tax liabilities (220.4) (1.9)

888 Holdings PLC Annual Report & Accounts 2022 187

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

26 DEFERRED TAX CONTINUED

Tax rates

The enacted future rate of UK corporation tax of 25.0% (31 December 2021: 19%), the Gibraltar statutory income tax rate of

12.5% (31 December 2021: 12.5%), the Maltese effective tax rate of 35.0% (31 December 2021: 5%) and the Irish effective tax

rate of 12.5% (31 December 2021: 12.5%) have been used to calculate the amount of deferred tax.

Tax losses

The Group has recognised £5.2m (31 December 2021: £2.8m) of deferred tax assets, including £4.0m (31 December 2021: £nil)

in respect of unutilised tax losses which are available in companies which are anticipated to make future profits.

The losses in Gibraltar arising in 2022 of £4.0m are due to a temporary tax incentive for capital expenditure in Gibraltar and

the Group’s operations in Gibraltar remain profitable in the absence of this adjustment and show forecast accounting and

taxable profits for 2023 and future periods. 2022 is the last year in which the temporary tax incentive is expected to apply.

All losses and tax credits, recognised and unrecognised, may be carried forward indefinitely.

Management have based their assessment of the recognition of deferred tax assets on unused tax losses of £63.8m

(31 December 2021: £32.0m) at the period end on the forecast also used for the impairment review.

Restricted interest

Restricted interest represents a deferred tax asset of £14.4m (31 December 2021: £nil) in relation to interest restrictions

for which an asset has been recognised to the extent that sufficient taxable temporary differences exist at the balance

sheet date.

Other temporary differences

Certain deferred tax assets and liabilities have been offset in the above analysis. The deferred tax liability for other

temporary differences of £1.5m includes deferred tax assets of £0.8m offset by deferred tax liabilities in other

jurisdictions of £2.3m.

Included within other temporary differences is a liability of £1.8m (31 December 2021: nil) which has been recognised in

respect of taxes that will be due on a repatriation of funds from the Groups overseas operations.

Unrecognised deferred tax attributes

Deferred tax is not recognised in respect of the value of the Group’s investments in subsidiaries and interests in joint ventures

where we are able to control the timing of the reversal of the temporary differences and it is probable that such differences

will not reverse in the future. The amount of the temporary differences for which deferred tax has not been recognised was

£17.2m (and tax thereon £1.5m) (31 December 2021: nil).

The Group has unutilised tax losses of £63.8m (31 December 2021: £32.0m) in entities which are not anticipated to make

profits in the foreseeable future and for which no deferred tax has been recognised.

27 SHARE CAPITAL

Share capital comprises the following:

Authorised

31 December

2022

Number

31 December

2021

Number

31 December

2022

£ million

31 December

2021

£ million

Ordinary Shares of £0.005 each 1,026,387,500

1,026,387,500 5.1 5.1

1. Including 447,020 treasury shares held by the Group as at 31 December 2022 (2021: 307,422).

Allotted, called up and fully paid

31 December

2022

Number

31 December

2021

Number

31 December

2022

£ million

31 December

2021

£ million

Ordinary Shares of £0.005 each at beginning of year 372,759,202 369,017,422 1.9 1.9

Issue of Ordinary Shares of £0.005 each 73,572,454 3,741,780 0.3 —

Ordinary Shares of £0.005 each at end of year 446,331,656 372,759,202 2.2 1.9

The narrative below includes details on issue of Ordinary Shares of £0.005 each as part of the Group’s employee share

option plan during 2022 and 2021:

On 7 April 2022 the Company issued 70.8 million new ordinary shares to partly fund the acquisition of the international (non-US)

business of William Hill, representing approximately 19% of its issued capital, at £2.30 per share. After issue costs of £4.3 million,

the net proceeds were £158.5 million. Issue costs directly attributable to the transaction have been accounted for as a

deduction from share premium.

888 Holdings PLC Annual Report & Accounts 2022188

FINANCIAL STATEMENTS

28 SHARE BASED PAYMENTS

Equity-settled share benefit charges

As at 31 December 2022 the Group has equity-settled employee shares and share options granted under two equity-settled

employee share incentive plans – the 888 All-Employee Share Plan (“AEP”), which expired according to its terms in August 2015, and

the 888 Long-Term Incentive Plan 2015 (“LTIP”) which was adopted at the Extraordinary General Meeting on 29 September 2015.

The 888 Long-Term Incentive Plan 2015 is open to employees (including Executive Directors) and full-time consultants of the

Group, at the discretion of the Remuneration Committee. Awards under this scheme will vest in instalments over a fixed period

of at least three years subject to the relevant individuals remaining in service. Certain of these awards are subject to additional

performance conditions imposed by the Remuneration Committee at the dates of grant, further details of which are given in

the Directors’ Remuneration Report.

In addition, on 8 May 2017, the Board adopted a Deferred Share Bonus Plan (“DSBP”) in order to allow the Company to

comply with the requirement contained in its Remuneration Policy pursuant to which any annual bonus payment made to

an Executive Director in excess of 100% of such Executive Director’s annual salary is deferred into equity awards of the

Company in the form of nil cost options or share awards.

After the acquisition of William Hill, certain equity-settled employee share incentives were granted to members of William

Hill’s senior management. Awards under this scheme will vest in instalments over a three-year period, subject to the relevant

individuals remaining in service. These incentives are included as a part of the LTIP scheme referenced above.

The Company grants equity awards under which shares of the Company are issued to employees at nil consideration.

The nominal value of such shares is covered internally.

Details of equity settled shares as part of the AEP, the LTIP and the DSBP are set out below:

Ordinary Shares granted (without performance conditions)

2022

Number

2021

Number

Outstanding future vesting equity awards at the beginning of the year 5,446,420 5,541,569

Future vesting equity awards granted during the year 3,269,343 2,801,667

Future vesting equity awards lapsed during the year (821,961) (286,830)

Shares issued upon vesting during the year (1,340,207) (2,609,986)

Outstanding future vesting equity awards at the end of the year 6,553,595 5,446,420

Averaged remaining life until vesting 1.27 years 1.68 years

Deferred Share Bonus Plan

2022

Number

2021

Number

Outstanding future vesting equity awards at the beginning of the year 307,422 196,488

Future vesting equity awards granted during the year 220,225 220,225

Shares exercised during the year (217,379) (109,291)

Outstanding future vesting equity awards at the end of the year 310,268 307,422

Averaged remaining life until vesting 0.81 years 0.62 years

The aforementioned grants under the DSBP were approved by the Board as part of the annual bonus award to the Executive

Directors and Operational Management for 2016–2021, pursuant to which an amount equal to 100% of salary was granted in

cash, with any addition exceeding 100% of salary deferred into shares of the Company. The outstanding future vesting equity

awards at the end of the year are set out below:

(i) 10 March 2022 to the CEO (196,141 Shares), the CFO (54,123 Shares) and Operational Management (106,713 Shares),

(ii) 18 March 2021 to the CEO (42,490 Shares) and the CFO (3,953 Shares),

(iii) 16 April 2020 to the CEO (7,182 Shares), the then former CEO and CFO (36,418 Shares).

Ordinary Shares granted for future vesting are valued at the share price at grant date, which the Group considers

approximates to the fair value. The Group recognised the following as treasury shares as of 31 December 2023:

(i) 11 March 2022, the Group purchased 356,977 shares on the open market at an average price of 193.0¢ per share,

(ii) 22 March 2021, the Group purchased 220,225 shares on the open market at an average price of 362.0¢ per share,

(iii) 29 April 2020, the Group purchased 130,796 shares on the open market at an average price of 143.7¢ per share, of which

43,599 shares were exercised during the year.

888 Holdings PLC Annual Report & Accounts 2022 189

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

28 SHARE BASED PAYMENTS CONTINUED

Ordinary shares granted (subject to performance conditions)

2022

Number

2021

Number

Outstanding at the beginning of the year 3,208,384 3,936,354

Shares granted during the year 1,006,013 530,976

Lapsed future vesting shares (353,333) (127,152)

Shares issued during the year (1,425,743) (1,131,794)

Outstanding at the end of the year 2,435,321 3,208,384

Averaged remaining life until vesting 1.28 years 0.84 years

Shares granted during the year were 1,006,013 (2021: 530,976). The share price at the grant date was 187.2¢. Shares

outstanding at the end of the year consist of 2,435,321 shares subject to 50% EPS growth target, and 50% total shareholder

return (TSR) compared to a peer group of companies.

Further details of performance conditions that have to be satisfied on these awards are set out in the directors’ remuneration

report. The EPS growth target is taken into account when determining the number of shares expected to vest at each

reporting date, and the TSR target is taken into account when calculating the fair value of the share grant.

Valuation information – shares granted under TSR condition:

Shares granted during the year: 2022 2021

Share pricing model used Monte Carlo Monte Carlo

Determined fair value £1.15 £2.45

Number of shares granted 503,007 265,488

Average risk-free interest rate 0.1% 0.1%

Average standard deviation 46% 46%

Average standard deviation of peer group 53% 48%

Valuation information – shares granted

2022 2021

Without

performance

conditions

With

performance

conditions

Without

performance

conditions

With

performance

conditions

Weighted average share price at grant date £1.55 £1.87 £3.67 £3.49

Weighted average share price at issue of shares £2.08 £1.95 £3.69 £3.53

Ordinary shares granted for future vesting with EPS growth performance conditions are valued at the share price at grant

date, which the Group considers approximates to the fair value. The restrictions on the shares during the vesting period,

primarily relating to non-receipt of dividends, are considered to have an immaterial effect on the share option charge.

In accordance with IFRS 2 a charge to the consolidated income statement in respect of any shares or options granted under

the above schemes is recognised and spread over the vesting period of the shares or options based on the fair value of the

shares or options at the grant date, adjusted for changes in vesting conditions at each balance sheet date. These charges

have no cash impact.

Share benefit charges

2022

£ million

2021

£ million

Equity-settled charge for the year 7.9 5.2

Cash-settled charge for the year (2.7) 0.9

Total share benefit charges 5.2 6.1

888 Holdings PLC Annual Report & Accounts 2022190

FINANCIAL STATEMENTS

29 RETIREMENT BENEFIT SCHEMES

William Hill pension schemes

On acquisition, the Group acquired a number of defined contribution and defined benefit pension schemes, operated by

William Hill. The UK schemes are operated under a single trust and the assets of all the schemes are held separately from

those of the Group in funds under the control of trustees.

The respective costs of these schemes are as follows:

2022

£ million

Defined contribution schemes (charged to operating(loss)/profit) 4.3

Defined benefit scheme (charged to operating(loss)/profit) 1.3

Defined contribution schemes

The defined contribution schemes, to which both the Group and employees contribute to fund the benefits, are available for

all eligible employees. The only obligation of the Group with respect to these schemes is to make the specified contributions.

The total cost charged to income in respect of these schemes represents contributions payable to the schemes by the Group

at rates specified in the rules of the respective schemes. At 31 December 2022, contributions of £nil due in respect of the

current reporting period were outstanding to be paid over to the schemes.

Defined benefit scheme

The Group also operates a defined benefit scheme in the UK for eligible employees which closed to new members in 2002.

Under the scheme, employees are entitled to retirement benefits varying between 1.67% and 3.33% of final pensionable pay

for each year of service on attainment of a retirement age of 63. With effect from 1 April 2011, the defined benefit scheme

was closed to future accrual but maintains the link for benefits accrued up to 31 March 2011 with future salary increases (up

to a maximum of 5% per annum). Employed members of this scheme were automatically transferred into one of the defined

contribution schemes. The costs of administering the scheme are borne by the Group.

For the purposes of preparing the information disclosed in these accounts, a full actuarial valuation of the scheme was

carried out at 30 September 2019 and updated to 31 December 2022 by a qualified independent actuary. The present values

of the defined benefit obligation and the related current service cost were measured using the projected unit credit method

and by rolling forward the results of the 30 September 2019 technical provisions using actuarial techniques, allowing for

cash flows and interest over the period, differences between the assumptions used to set the technical provisions and those

selected for accounting under IAS 19, experience from making an allowance for actual deferred revaluation and pension

increases in payment over the period and the PIE exercise carried out in 2019.

Pension buy-in

During 2021, prior to the acquisition by the Group of William Hill, William Hill agreed a buy-in of the scheme’s liabilities. On

28 June 2021, a transaction was completed which insured the liabilities of the scheme with Rothesay Life. As a result of the

transaction, the scheme holds annuities with Rothesay Life which are qualifying insurance policies as defined in IAS 19.8

‘Employee benefits’. The income from these policies exactly matches the amount and timing of all benefits to those members

covered under the policies. As with other bulk annuity purchases the Scheme has carried out, the change was treated as a

change in investment strategy.

At the year-end date, the estimated Defined Benefit Obligation (‘DBO’) for all insured members was £255.4m. The value of

the buy-in policies was determined to be £254.2m, as the effects of GMP equalisation was not included in the contract value

of the buy-in insurance policy. As a result, £1.2m is recognised in the Statement of Financial Position as a non-current liability.

Funding valuation

The general principles adopted by the Trustees for the purposes of this funding valuation are that the assumptions used,

taken as a whole, will be sufficiently prudent for pensions already in payment to continue to be paid and to reflect the

commitments which will arise from members’ accrued pension rights. The William Hill group agreed to pay £1.9m per annum

in respect of the costs of insured death benefits, expenses and levies until September 2025.

The William Hill group has the right to a refund of any surplus on wind up of the scheme.

In April 2018, the Trustees of the William Hill pension scheme signed a buy-in bulk annuity policy. The policy was taken out to

insure a proportion of the defined benefit pension scheme obligation against the risk of rising costs in the future. As a result

of the buy-in transaction in the period, the entire scheme obligations are now insured.

888 Holdings PLC Annual Report & Accounts 2022 191

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

29 RETIREMENT BENEFIT SCHEMES CONTINUED

William Hill pension schemes continued

Disclosure of principal assumptions

The financial assumptions used by the actuary in determining the present value of the defined benefit scheme’s

liabilities were:

2022

Rate of increase of salaries n/a

Rate of increase of pensions (non-pensioner) 3.0

Rate of increase of pensions (pensioner) 3.3

Discount rate 4.7

Rate of RPI inflation (non-pensioner) 3.1

Rate of RPI inflation (pensioner) 3.4

Rate of CPI inflation 2.5

In accordance with the relevant accounting standard, the discount rate has been determined by reference to market yields

at the period end date on high-quality fixed income investments at a term consistent with the expected duration of the

liabilities. Price inflation is determined by the difference between the yields on fixed and index-linked Government bonds with

an adjustment to allow for differences in the demand for these bonds, which can distort this figure. The expected rate of

salary growth and pension increases are set with reference to the expected rate of inflation. No change has been made to

the basis of inflation applied to pension increases in the scheme.

The mortality assumption is kept under review and has been updated. The current life expectancies for a member underlying

the value of the accrued liabilities are:

Life expectancy at age 65

2022

years

Male retiring now 21.9

Male retiring in 25 years’ time 23.6

Female retiring now 23.9

Female retiring in 25 years’ time 25.8

The assets in the scheme are set out in the table below.

2022

£ million

Total market value of assets 254.2

Present value of scheme liabilities 255.4

Deficit in scheme at end of year 1.2

Analysis of the amount charged/(credited) to adjusted profit before interest and tax:

2022

£ million

Current service cost 0.4

Administration expenses 0.9

Total operating charge 1.3

Analysis of the amounts recognised in the Consolidated Statement of Comprehensive Income:

2022

£ million

Actual return less expected return on pension scheme assets 36.2

Actuarial gain on demographic assumptions (0.8)

Actuarial loss on experience adjustment 3.0

Actuarial loss arising from changes in financial assumptions (38.1)

Actuarial loss remeasurements 0.3

888 Holdings PLC Annual Report & Accounts 2022192

FINANCIAL STATEMENTS

29 RETIREMENT BENEFIT SCHEMES CONTINUED

William Hill pension schemes continued

Disclosure of principal assumptions continued

Movements in the present value of defined benefit obligations in the period were as follows:

2022

£ million

At acquisition 1 July 2022 293.1

Movement in period:

Service cost 0.4

Interest cost 5.3

Remeasurements – changes in financial assumptions (38.1)

Remeasurements – changes in demographic assumptions (0.8)

Remeasurements – experience adjustments 3.0

Benefits paid (7.1)

Insurance premium for risk benefits (0.4)

At end of year 255.4

Movements in the present value of fair value of scheme assets in the period were as follows:

2022

£ million

At acquisition 1 July 2022 292.7

Movement in period:

Interest income on plan assets 5.3

Remeasurements – return on plan assets (excluding interest income) (36.2)

Contributions from sponsoring companies 0.8

Administration expenses charged to operating (loss)/profit (0.9)

Benefits paid (7.1)

Insurance premium for risk benefits (0.4)

At end of year 254.2

Sensitivity analysis of the principal assumptions used to measure scheme liabilities

The sensitivity of the present value of the scheme’s liabilities to changes in the principal assumptions used to measure these

liabilities is illustrated in the table that follows. The illustrations consider the single change shown, with the other assumptions

assumed to be unchanged. In practice, changes in one assumption may be accompanied by offsetting changes in another

assumption (although this is not always the case). The change to the inflation sensitivity allows for changes to pension

increases in deferment and in payment. Although the analysis does not take account of the full distribution of cash flows

expected, it does provide an approximation of the sensitivity of the assumptions shown.

In addition, as the scheme is now fully bought-in, any changes in the value of the scheme’s liabilities due to changes in the

underlying assumptions will be matched by changes in the value of the scheme’s assets (which are measured in line with the

obligations). There would therefore be a nil net balance sheet impact from these sensitivities.

Assumption Changes in assumption Impact on defined benefit obligation

Discount rate Decrease by 0.25% p.a. Increase by £9.0m

Discount rate Increase by 0.25% p.a. Decrease by £9.0m

Rate of increase in inflation Increase by 0.25% p.a. Increase by £6.0m

Rate of increase in inflation Decrease by 0.25% p.a. Decrease by £7.0m

Life expectancy Members assumed to live one year longer Increase by £10.0m

The sensitivity to price inflation includes the corresponding impact on CPI, revaluation in deferment and pension increases

in payment. It does not include any adjustments to future salary increases.

Nature and extent of the risks arising from financial instruments held by the defined benefit scheme

Through the scheme, following the buy-in, the main risk that the Group has is counterparty risk, with the Insurance company

backing the majority of the policies with the exception GMP equalisation which is not included in the contract value of the

buy-in insurance policy.

At the year-end date, the estimated Defined Benefit Obligation (‘DBO’) for all insured members was £255.4m. The value of the

buy-in policies was determined to be £254.2m.

888 Holdings PLC Annual Report & Accounts 2022 193

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

29 RETIREMENT BENEFIT SCHEMES CONTINUED

William Hill pension schemes continued

Funding

Alongside the risk assessment above, on 30 September 2020, the Group agreed an ongoing funding requirement with the

Trustees which expires on 30 September 2025.

The weighted average duration of the scheme’s defined benefit obligation as at 31 December 2022 is 15 years.

The undiscounted maturity profile of the defined benefit obligation between one and ten years is shown below:

2022

£ million

Less than one year 12.7

Between one and two years 13.4

Between two and five years 45.7

Between five and ten years 71.7

No allowance is made for commutation lump sums or individual transfers out due to the fluctuating nature of these payments.

30 RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation

and are not disclosed in this note. Transactions between the Group and its associate are disclosed below.

Trading transactions

Associates

As part of the William Hill acquisition, the Group acquired Sports Information Services (Holdings) Limited, an associate of

the William Hill Group. From 1 July to the balance sheet date, the Group made purchases of £15.8m from Sports Information

Services Limited, a subsidiary of Sports Information Services (Holdings) Limited. At 31 December 2022, the amount payable

to Sports Information Services Limited by the Group was £nil.

Remuneration of Key Management Personnel

The aggregate amounts payable to key management personnel, considered to be the Directors of the Company, as well

as their share benefit charges, are set out below:

2022

£ million

2021

£ million

Short-term benefits 2.9 3.6

Post-employment benefits 0.1 0.1

Share benefit charges – equity-settled 2.4 1.0

7.4 4.7

Further details on Directors’ remuneration are given in the Directors’ Remuneration Report.

31 CONTINGENT LIABILITIES

Legal claims

In common with other businesses in the gambling sector the Group receives claims from consumers relating to the provision

of gambling services. Claims have been received from consumers in a number of (principally European) jurisdictions and

allege either failure to follow responsible gambling procedures, breach of licence conditions or that underlying contracts in

question are null and void given local licencing regimes. The Group expenses consumer claims as they are resolved or finally

determined in consumers’ favour and provides for such claims where an outcome in favour of the consumers in question

is probable.

The Business has been subject to a particular acceleration of claims in Austria since 2020 following marketing campaigns by

litigation funders in that jurisdiction. Claims have continued to be received throughout 2021 and 2022 at a broadly consistent

rate with a slight acceleration across 2021 and 2022. Consumers who have obtained judgement against the Business’ entities

in the Austrian courts have sought to enforce those judgements in Malta and Gibraltar. These are being defended on the

basis of a public policy argument. The provisions held for the Group relating to these claims is £86.2m, which includes a

liability measured at fair value on acquisition of £80.6m relating to the William Hill and Mr Green brands and provision of

£5.6m relating to 888. Please refer to note 22 for further detail.

The £80.6m relating to the William Hill and Mr Green brands was recognised on acquisition representing the fair value of the

contingent liability at that point in time, recognised on the basis that it was a possible future liability and in line with IFRS 3.

Please refer to note 16 for further detail.

Since acquisition, there has been an alignment in strategy and accounting treatment with William Hill and Mr Green aligning

to the 888 methodology. William Hill and Mr Green have therefore recognised a provision for probable legal claims and

a contingent liability for possible legal claims it expects to receive. As at 31 December 2022, the provision is estimated at

£67.0m and the contingent liability is estimated at £13.5m. The contingent liability for the 888 business is estimated at £5.2m.

888 Holdings PLC Annual Report & Accounts 2022194

FINANCIAL STATEMENTS

31 CONTINGENT LIABILITIES CONTINUED

Legal claims continued

The calculation of the customer claims liability includes provision for interest but is gross of gaming tax. Management have

assessed that it is probable as opposed to virtually certain that the tax will be reclaimed and therefore a contingent asset

has been disclosed for the tax reclaims. The contingent asset relating to the tax reclaim on the total liability (both provided

for and disclosed as a contingent liability) is a range in value of up to £24.5m.

Regulatory compliance

Given the nature of the legal and regulatory landscape of the industry, from time to time the Group has self-reported or

received notices, communications and legal actions from regulatory authorities and other parties in respect of its activities.

The Group is furthermore subject to regular compliance assessments of its licensed activities, from time to time. The Group’s

policy is to engage in dialogue with regulators and address any concerns raised in such assessments, to work cooperatively

with the regulator and to take action to address any concerns raised as part of the assessment as soon as possible. The

Group takes legal advice as to the manner in which it should respond and the likelihood of success of such actions. Based on

this advice and the nature of the actions, for the majority of these matters the Board is unable to quantify reliably the outflow

of funds that may result, if any.

For matters where an outflow of funds is probable and can be measured reliably, amounts have been recognised in the

financial statements within Provisions. Except for the regulatory matters described in note 22, these amounts are not material

at 31 December 2022.

32 EVENTS AFTER THE REPORTING DATE

In January 2023, an internal compliance team self-identified failures where the Group’s safer gambling policies were not being

effectively applied. Further investigations identified similar accounts which were later confirmed to be a broader issue within

a specific cohort of players, namely 888 VIPs in the Middle East. The Board, once fully briefed, took the prudent decision to

suspend all of these accounts while the compliance team investigated the situation further. The investigation has concluded

and the Group has remedied the failings and is confident that its policies and procedures are robust, and this failure was

isolated to a very specific cohort of players. It has successfully started reopening accounts and currently expects to recover

40-50% of this revenue.

888 Holdings PLC Annual Report & Accounts 2022 195

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

33 INVESTMENTS IN SIGNIFICANT SUBSIDIARIES

The consolidated financial statements include the following principal subsidiaries of 888 Holdings plc:

Name Country

Percentage

of equity

interest Nature of business

888 (Ireland) Limited Malta 100% Holds Irish online betting licence

888 Acquisitions Limited Gibraltar 100% Acquisition vehicle for the William Hill purchase

888 Acquisitions LLC Delaware 100% Dormant Company

888 Atlantic Limited Gibraltar 100% Holds New Jersey CSIE licence

888 Cayman Finance Limited Cayman Islands 100% Holding Company

888 CZ Limited Gibraltar 100% Dormant Company

888 Denmark Limited Malta 100% Holds Danish online gaming licence

888 France Limited Malta 100% Dormant Company

888 Germany Limited Malta 100% Holds German online gaming licences

888 Italia Ltd Malta 100% Holds Italian online gaming licence

888 Liberty Ltd Gibraltar 100% Holds Delaware CSIE licence

888 Netherlands Limited Malta 100% Holds Netherlands online gaming licence

888 Online Games España, S.A. Ceuta 100% Holds Spanish online gaming licence

888 Portugal Ltd Malta 100% Holds Portuguese online gaming licence

888 Romania Limited Malta 100% Holds Romanian online gaming licence

888 Sweden Limited Malta 100% Holds Swedish online gaming licence

888 UK Limited Gibraltar 100% Holds UK online gaming licence

888 US Holdings Inc. Delaware 100% Holding company

888 US Inc. Delaware 100% Holding company

888 US Ltd Gibraltar 100% Holds Nevada IGSP licence

888 US Services Inc. Delaware 100% Employs NJ-based personnel and hold servers/IT

equipment in the US.

888 VHL UK Holdings Limited United Kingdom 100% Holding Company

A.J.Schofield Limited (in liquidation) United Kingdom In liquidation

AAPN Holdings LLC Delaware 100% Holding company

AAPN New Jersey LLC New Jersey 100% Holds New Jersey CSIE licence

Ad-Gency Limited (in liquidation) Israel In liquidation

Admar Services (Gibraltar) Limited Gibraltar 100% Obtaining affiliate marketing payments

Admar Services (Malta) Limited Malta 100% Provides the provision of marketing services to other

companies within William Hill Group

Alfabet S.A.S Colombia 90% Columbian operations

Arena Racing Limited United Kingdom 100% Dormant Company

B.B.O'Connor (Lottery) Limited Jersey 100% Dormant Company

B.J.O'Connor Holdings Limited Jersey 100% Property investment and management

B.J.O'Connor Limited Jersey 100% The operation of Licensed Betting Offices (LBOs)

& is also licensed

Baseflame Limited (in liquidation) United Kingdom In liquidation

Bradlow Limited United Kingdom 100% Dormant Company

Brigend Limited Gibraltar 100% Bingo business operator pursuant to Gibraltar licence

Brooke Bookmakers Limited United Kingdom 100% Dormant Company

Camec (Scotland) Limited United Kingdom 100% Dormant Company

Camec (Southern) Limited

(in liquidation)

United Kingdom In liquidation

Camec Limited United Kingdom 100% Dormant Company

Cassava Enterprises (Gibraltar) Ltd Gibraltar 100% Dormant Company

Cassava Holdings Limited Antigua & Barbuda 100% Held lease of Antigua offices

Cellpoint Investments Limited Cyprus 100% Group service company

City Tote Limited (in liquidation) United Kingdom In liquidation

Concession Bookmakers Limited

(in liquidation)

United Kingdom In liquidation

Dansk Underholdning Limited Malta 100% Dormant Company

Deluxe Online Limited (in liquidation) United Kingdom In liquidation

Deviceguide Limited United Kingdom 100% Dormant Company

Dixie Operations Limited Antigua & Barbuda 100% Operated a call centre in Antigua

Entertainment Ventures Europe

2019 Limited

Malta 100% Maltese licence holder

Evenmedia Limited (In liquidation) United Kingdom In liquidation

888 Holdings PLC Annual Report & Accounts 2022196

FINANCIAL STATEMENTS

Name Country

Percentage

of equity

interest Nature of business

Evoke Gaming Ltd Malta 100% Operates a remote gaming licence- Licences: ROI,

Malta, Sweden & ROW Customers.

Fordart Limited Gibraltar 100% Enters into B2B contracts pursuant to Gibraltar

licence and general commercial business activities

Fred Parkinson Management Limited United Kingdom 100% Dormant Company

Gaming Ventures Europe 2019 Limited Malta 100% Maltese licence holder

Gisland Limited Gibraltar 100% Payment transmission services

Goodfigure Limited (in liquidation) United Kingdom In liquidation

Grand Parade Limited United Kingdom 100% Contract Software Development

Grand Parade Sp. z o.o. Poland 100% Software Writing and Maintenance +

Project Management

Green Gaming Group PLC Malta 100% Holding company for most legal entities located in Malta

GUS Carter (Cash) Limited United Kingdom 100% Dormant Company

GUS Carter Limited United Kingdom 100% Dormant Company

Ivy Lodge Limited Guernsey 100% Property Holding company

James Lane (Bookmaker) Limited United Kingdom 100% Dormant Company

James Lane (Turf Accountants)

Limited

United Kingdom 100% Dormant Company

James Lane Group Limited United Kingdom 100% Dormant Company

Laystall Limited United Kingdom 100% Dormant Company

Live 5 Holdings Limited United Kingdom 100% Holding company

Live 5 Limited United Kingdom 100% Games studio. Licensed and regulated entity by the

UK Gambling Commission.

Matsbest Limited United Kingdom 100% Dormant Company

Matsgood Limited United Kingdom 100% Dormant Company

Mr Green & CO AB Sweden 100% Dormant Company

Mr Green & Co Optionsbarare AB Sweden 100% Dormant Compan y

Mr Green Consultancy Services Ltd. United Kingdom 100% Dormant Company

Mr Green Consulting AB Sweden 100% Dormant Company

Mr Green Limited Malta 100% Operates a remote gaming licence & holds the MGA

licence for the Mr Green Brand

MRG IP Limited Malta 100% Holds intellectual property developed for the

Mr Green Brands.

MRG Spain PLC Malta 100% Holds a licence in Spain.

New Wave Virtual Ventures Gibraltar 100% Holds mobile gaming applications

Nimverge Tech India Private Limited India 100% Providing Tech Services to the group.

Online Entertainment Limited Gibraltar 100% Held domains, presently dormant

Phonethread Limited United Kingdom 100% Dormant Company

Random Logic Limited Israel 100% Research, development and marketing

service company

Random Logic Ventures Limited Israel 100% Holding company

Regency Bookmakers

(Midlands) Limited

United Kingdom 100% Dormant Company

Selwyn Demmy (Racing) Limited United Kingdom 100% Dormant Compan y

SIA Mr Green Latvia Latvia 100% Gaming entity regulated by the Latvian regulator

and servicing the Latvian (Mr Green) marke t

Sparkware Technologies SRL Romania 100% Software development

Spectate Limited Ireland 100% Research & development centre in Ireland

St James Place Limited Guernsey 100% Property Holding Company.

T H Jennings (Harlow Pools) Limited United Kingdom 100% Dormant Company

Trackcycle Limited United Kingdom 100% Dormant Company

VDSL (International) Limited Gibraltar 100% Operator of the gaming sites pursuant to Virtual

Global Digital Services Limited's Gibraltar licence for

Canadian customers

VHL America, LLC Delaware 95.01% Holding company for US B2C

VHL Colorado, LLC Colorado 100% Holds Colorado online gaming licence

VHL Financing (Malta) Limited Malta 100% Dormant compan y

33 INVESTMENTS IN SIGNIFICANT SUBSIDIARIES CONTINUED

888 Holdings PLC Annual Report & Accounts 2022 197

FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Name Country

Percentage

of equity

interest Nature of business

VHL Financing Limited Gibraltar 100% Holding company

VHL Indiana, LLC Indianapolis 100% Dormant Company

VHL Iowa, LLC Iowa 100% Dormant Company

VHL Louisiana, LLC Louisiana 100% Dormant Company

VHL Maryland, LLC Maryland 90.02% Dormant Company

VHL Massachusetts LLC Massachusetts 100% Dormant Company

VHL Michigan, LLC Michigan 100% Holds Michigan online gaming licence

VHL Missouri, LLC Missouri 100% Dormant Company

VHL New Jersey New Jersey 100% Dormant Company

VHL Ohio, LLC Ohio 100% Dormant Company

VHL Ontario Limited Gibraltar 100% Holds Ontario online gaming licence

VHL Virginia, LLC Virginia 90.02% Holds Virginia online gaming licence

Vickers Bookmakers Limited

(in liquidation)

United Kingdom In liquidation

Virtual Digital Services Limited Malta 100% Operator of the gaming sites pursuant to Malta

licence – certain European markets

Virtual Emerging Entertainment Limited Gibraltar 100% Licensing of brands for Asian market

Virtual Global Digital Services Limited Gibraltar 100% Operator of the gaming sites pursuant to Gibraltar

licence

Virtual Internet Services Latam S.L.U. Ceuta 100% Dormant Company

Virtual Internet Services Limited Gibraltar 100% Procurement of internet and bandwidth services for

the group, holds Gibraltar office lease and employs

Gibraltar personnel

Virtual IP Assets Limited Antigua & Barbuda 100% IP company

Virtual Marketing Services

(Gibraltar) Limited

Gibraltar 100% Group marketing acquisition company

Virtual Marketing Services

(Ireland) Limited

Ireland 100% Marketing and other services company

Virtual Marketing Services (UK) Limited England & Wales 100% Marketing and other services company

Virtual Share Services Limited Gibraltar 100% Holding of shares to satisfy vesting of equity awards

Vynplex Limited (In liquidation) United Kingdom In liquidation

WHG (International) Limited Gibraltar 100% Trading and licensed entity for all brands and

territories except Spain

WHG (Malta) Limited Malta 100% Dormant and Non trading company. Denmark

Licence applicant

WHG Customer Services

Philippines, INC

Philippines 100% Operating entity of Philippines shared service centre

WHG IP Licensing Limited Gibraltar 100% In partnership with WHG (International) Limited,

holds WH Online IP

WHG ITALIA SrL Italy 100% Payroll related expenses of employees in Italy.

Trading entity that receives income via

Intercompany recharge

WHG Online Marketing Spain S.A. Spain 100% Payroll related expenses of employees in Spain.

Trading entity and income is intercompany recharge

WHG Services (Bulgaria) Limited EOOD Bulgaria 100% The provision of consulting and technical support

WHG Services (Philippines) Limited Gibraltar 100% Holding company and invoicing conduit for WHG

Customer Services Philippines, Inc

WHG Services Limited United Kingdom 100% Providing services related mainly to the technical

development of William Hill Limited's online business.

WHG Spain PLC Malta 100% Operates a Spanish remote gaming license.

WHG Trading Limited Gibraltar 100% Dormant Compan y

Will Hill Limited United Kingdom 100% Holding Company

William Hill (Alba) Limited United Kingdom 100% Dormant Company

William Hill (Caledonian) Limited United Kingdom 100% Dormant Company

William Hill (Course) Limited

(in liquidation)

United Kingdom In liquidation

William Hill (Edgeware Road) Limited United Kingdom 100% Dormant Company

33 INVESTMENTS IN SIGNIFICANT SUBSIDIARIES CONTINUED

888 Holdings PLC Annual Report & Accounts 2022198

FINANCIAL STATEMENTS

Name Country

Percentage

of equity

interest Nature of business

William Hill (Effects) Limited United Kingdom 100% Dormant Company

William Hill (Essex) Limited United Kingdom 100% Dormant Company

William Hill (Football) Limited United Kingdom 100% Dormant Company

William Hill (Goods) Limited United Kingdom 100% Dormant Company

William Hill (IOM) No. 3 Limited Isle of Man 100% Dormant Company

William Hill (London) Limited United Kingdom 100% Dormant Company

William Hill (Malta) Limited Malta 100% Dormant Company

William Hill (Midlands) Limited United Kingdom 100% Dormant Company

William Hill (North Eastern) Limited United Kingdom 100% Dormant Company

William Hill (North Western) Limited United Kingdom 100% Dormant Company

William Hill (Northern) Limited

(in liquidation)

United Kingdom In liquidation

William Hill (Products) Limited

(in liquidation)

United Kingdom In liquidation

William Hill (Resources) Limited United Kingdom 100% Dormant Company

William Hill (Scotland) Limited United Kingdom 100% Dormant Company

William Hill (Southern) Limited United Kingdom 100% Dormant Company

William Hill (Strathclyde) Limited

(in liquidation)

United Kingdom In liquidation

William Hill (Supplies) Limited

(in liquidation)

United Kingdom In liquidation

William Hill (Wares) Limited United Kingdom 100% Dormant Company

William Hill (Western) Limited United Kingdom 100% Dormant Company

William Hill Bookmakers (Ireland)

Limited

Ireland 100% Dormant Company

William Hill Call Centre Limited Ireland 100% Dormant Company

William Hill Cayman Holdings Limited Cayman Islands 100% Holding Company

William Hill Credit Limited United Kingdom 100% Dormant Company

William Hill Employee Shares

Trustee Limited

United Kingdom 100% Dormant Company

William Hill Finance Limited United Kingdom 100% Holding Company

William Hill Gametek AB Sweden 100% Limited operations, provides technical and support

services in relation to the platforms/games

William Hill Global PLC Malta 100% Holds the MGA license for the WH Brand & is the

main operating company in Malta

William Hill Holdings Limited United Kingdom 100% Holding Company

William Hill Investments Limited United Kingdom 100% Holding Company

William Hill Latvia SIA Latvia 90% Main license holder in Latvia.

William Hill Limited United Kingdom 100% Previously listed WH Group operating company

William Hill Malta PLC Malta 100% Malta Gaming entity regulated by the MGA

William Hill Offshore Limited Ireland 100% Dormant Company

William Hill Organization Limited United Kingdom 100% Operation of Licensed Betting Offices (LBOs) and,

through its subsidiary companies, the provision

of online and telephone betting services in the

United Kingdom. UK operating entity

William Hill Steeplechase Limited Gibraltar 100% Special purpose vehicle for financing purposes

William Hill Trustee Limited United Kingdom 100% Acting as Trustee to the William Hill Pension Scheme

Willstan Properties Limited United Kingdom 100% Property Investment and Management in

Northern Ireland

Willstan Racing (Ireland) Limited Ireland 100% Dormant Company

Willstan Racing Holdings Limited United Kingdom 100% Dormant Company

Willstan Racing Limited United Kingdom 100% Dormant Company

Windsors (Sporting Investments) Limited United Kingdom 100% Dormant Company

Wise Entertainment DK ApS Denmark 100% Consulting assistance and entry into sales/

marketing agreements for content providers

Wizard's Hat Limited Malta 100% Dormant Company

33 INVESTMENTS IN SIGNIFICANT SUBSIDIARIES CONTINUED

888 Holdings PLC Annual Report & Accounts 2022 199

FINANCIAL STATEMENTS

COMPANY BALANCE SHEET

At 31 December 2022

Note

2022

£ million

2021

£ million

Assets

Non-current assets

Investments in subsidiaries 2 48.8 40.8

Loan to subsidiaries 163.9 —

Amounts due from related parties 112.9 —

Deferred tax assets 10 — —

325.6 40.8

Current assets

Trade and other receivables 3 18.0 78.7

Cash and cash equivalents — —

18.0 78.7

Total assets 343.6 119.5

Equity and liabilities

Equity

Share capital 4 2.2 1.9

Share premium 4 160.7 2.5

Treasury shares 4 (0.9) (0.9)

Retained earnings

90.6 85.3

Total equity 252.6 88.8

Liabilities

Current liabilities

Trade and other payables 5 2.3 5.0

Income tax payable 0.5 1.3

Amounts due to related parties 67.8 —

Loan payable to subsidiaries — 6.6

70.6 12.9

Non-current liabilities

Loan payable to subsidiaries 9 20.4 17.5

Deferred tax liabilities — 0.3

20.4 17.8

Total liabilities 91.0 30.7

Total equity and liabilities 343.6 119.5

1. Includes net profit of the Company for the year ended 31 December 2022 of £2.7m (31 December 2021: £49.1m).

The financial statements on pages 200 to 202 were approved and authorised for issue by the Board of Directors on

14April2023 and were signed on its behalf by:

Lord Mendelsohn Yariv Dafna

Executive Chair Chief Financial Officer

The notes on pages 203 and 204 form part of these financial statements.

888 Holdings PLC Annual Report & Accounts 2022200

FINANCIAL STATEMENTS

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022

capital

£ million

premium

£ million

Treasury

£ million

Retained

earnings

£ million

Total

£ million

Balance at 1 January 2021 1.9 2.5 (0.4) 76.9 80.9

Profit and total comprehensive income for the year — — — 47.4 47.4

Dividend paid (note 9) — — — (43.8) (43.8)

Acquisition of treasury shares — — (0.7) — (0.7)

Exercise of deferred share bonus plan — — 0.2 (0.2) —

Equity settled share benefit charges (note 8) — — — 5.1 5.1

Balance at 31 December 2021 1.9 2.5 (0.9) 85.4 88.9

Loss for the year — — — (0.9) (0.9)

Issue of shares 0.3 158.2 — — 158.5

Acquisition of treasury shares — — (0.7) — (0.7)

Exercise of deferred share bonus plan — — 0.7 (0.7) —

Equity settled share benefit charges (note 8) — — — 6.8 6.8

Balance at 31 December 2022 2.2 160.7 (0.9) 90.6 252.6

The following describes the nature and purpose of each reserve within equity.

Share capital – represents the nominal value of shares allotted, called-up and fully paid for.

Share premium – represents the amount subscribed for share capital in excess of nominal value.

Treasury shares – represent reacquired own equity instruments. Treasury shares are recognised at cost and deducted

from equity.

Retained earnings – represents the cumulative net gains and losses recognised in the parent company statement of

comprehensive income and other transactions with equity holders

The notes on pages 203 and 204 form part of these financial statements

888 Holdings PLC Annual Report & Accounts 2022 201

FINANCIAL STATEMENTS

COMPANY STATEMENT OF CASH FLOWS

For the year ended 31 December 2022

Note

2022

£ million

2021

£ million

Cash flows from operating activities:

(Loss)/profit before tax (2.0) 36.9

Adjustments for:

Interest on loans to subsidiaries (5.4) —

Share benefit charges 8 — 0.1

Dividend receivable — (37.8)

Income tax paid — (0.8)

Cash used in operating activities before working capital movement (7.4) (1.6)

Movements in working capital

(Increase)/decrease in amounts owed by subsidiaries (34.5) 17.0

Increase/(decrease) in amounts owed to subsidiaries 67.8 (9.9)

Increase in other receivables 3 (10.5) (6.6)

Decrease in trade and other payables 5 (2.7) (2.4)

Net cash generated from/(used in) operating activities 12.7 (3.5)

Cash flows from investing activities

Loan to subsidiaries (163.9) —

Dividends received 9 — 55.2

Net cash (used in)/generated from investing activities (163.9) 55.2

Cash flows from financing activities:

Issue of shares 4 158.5 —

Acquisition of treasury shares 4 (0.7) (0.8)

Repayment of loans payable to subsidiaries (6.6) (7.1)

Dividends paid 9 — (43 .8)

Net cash generated from/(used in) financing activities 151.2 (51.7)

Net increase/(decrease) in cash and cash equivalents — —

Cash and cash equivalents at the beginning of the year — —

Cash and cash equivalents at the end of the year — —

The notes on pages 203 and 204 form part of these financial statements.

888 Holdings PLC Annual Report & Accounts 2022202

FINANCIAL STATEMENTS

NOTES TO THE COMPANY FINANCIAL STATEMENTS

1 GENERAL INFORMATION AND ACCOUNTING POLICIES

A description of the Company, its activities and definitions are included in note 1 to the consolidated financial statements.

The Company’s financial statements have been prepared in accordance with UK adopted international accounting

standards in accordance with the requirements of the Gibraltar Companies Act 2014. The financial statements have been

prepared on a historical cost basis, except where certain assets or liabilities are held at amortised cost or at fair value as

described in the Company’s accounting policies.

All values are rounded to the closest hundred thousand, except when otherwise indicated.

The significant accounting policies applied in the financial statements in the prior year have been applied consistently in

these financial statements, except for the amendments to accounting standards effective for the annual periods beginning

on 1 January 2022 and representation of expenses analysis in the income statement. These are described in more detail in

note 1 to the consolidated financial statements.

As a company incorporated in Gibraltar, 888 Holdings plc is not required by UK law or regulation to prepare the Directors’

Remuneration or Strategic reports under regulation that applies to UK incorporated companies. However, by virtue of 888’s

Premium Listing on the London Stock Exchange and reflecting the Director’s approach to good governance and investor

expectation, we have prepared these reports in line with the requirements under the UK Companies act 2006.

Change in presentation currency of the Company

The Company has changed the currency in which it presents its financial results from US Dollar to Pound sterling (GBP)

with effect from 1 January 2022, in consideration of the William Hill acquisition and current business mix which now has

significantly higher GBP exposure.

Given the current composition of the Company’s activities, this change is expected to reduce the impact of currency

movements on reported results. Accordingly, to satisfy the requirements of IAS 21 ‘The Effects of Changes in Foreign

Exchange Rates’, the reported results for the year ended 31 December 2022 have been translated from US Dollar to GBP

using the following procedures:

• Assets and liabilities denominated in non-GBP currencies were translated into GBP at the relevant closing rates of exchange;

• Movements in other reserves were translated into GBP at the relevant average rates of exchange;

• Share capital, share premium, treasury shares/own shares and dividends were translated at the historic rates prevailing on

the date of each transaction; and

• The cumulative translation reserve was set to nil at 1 January 2004, being the earliest practicable date and the date of

transition to IFRS, and has been restated on the basis that the Group had reported in GBP since that date.

The opening balance sheet and all comparatives have been re-presented in GBP following the change in

presentation currency.

Investment in subsidiaries

The Company’s investments in subsidiaries are carried at cost less provisions resulting from impairment.

Share-based payments

The financial effect of awards by the Company of options over its equity shares to employees of subsidiary undertakings

is recognised by the Company in its individual financial statements as an adjustment to its investment in subsidiaries with

an opposite adjustment to equity. The subsidiary, in turn, will recognise the IFRS 2 adjustment in its income statement with

acredit (debit) to equity to reflect the deemed capital contribution from (dividend to) the Company.

Critical accounting estimates and judgements – impairment testing of investments in and amounts due

fromsubsidiaries

The Company’s investments in and amounts due from subsidiaries have been tested for impairment by comparison against

the underlying value of the subsidiaries’ assets.

2 INVESTMENTS IN SUBSIDIARIES

The Company’s principal subsidiaries are listed in note 33 to the consolidated financial statements. In the Company’s

financial statements, investments in subsidiaries are held at cost less provision for any impairment. The Group applies IFRS2

– Share-based Payment. Consequently, the Company recognises as a cost of investment the value of its own shares that it

makes available for the purpose of granting share options to employees or contractors of its subsidiaries. The net movement

in investment in subsidiaries during the year was £8.1m (2021: £5.6m) included within this were share-based payment charges

of £3.3m in 2021 (2021: £5.0m), which is net of £nil intragroup recharges related to share based payment schemes (2021: £6.8m).

The Company made no capital contributions during the year (2021: £7.3m ) in respect of incorporation of new subsidiaries.

888 Holdings PLC Annual Report & Accounts 2022 203

FINANCIAL STATEMENTS

3 TRADE AND OTHER RECEIVABLES

2022

£ million

2021

£ million

Other receivables and prepayments 1.9 1.1

Restricted short-term deposits 16.1 6.4

18.0 7.5

The carrying value of trade and other receivables approximates to their fair value. An expected credit loss assessment for

material balances had been performed. None of the balances included within trade and other receivables are past due and

no material expected credit loss provision is required. Amounts due from subsidiaries are payable on demand.

4 SHARE CAPITAL

The disclosures in note 27 to the consolidated financial statements are consistent with those for the Company, including

capital management in note 24 to the consolidated financial statements.

5 TRADE AND OTHER PAYABLES

2022

£ million

2021

£ million

Trade payables 0.1 0.1

Amounts due to subsidiaries — —

Other payables and accrued expenses 2.2 4.9

2.3 5.0

The carrying value of trade and other payables approximates to their fair value. All balances included within trade and other

payables are repayable on demand.

6 FINANCIAL RISK MANAGEMENT

To the extent relevant to Company’s financial assets and liabilities (see notes 3 and 5), the Company’s financial risk management

objectives and policies are consistent with those of the Group as disclosed in note 24 to the consolidated financial statements.

Interest-bearing loans and borrowings are disclosed in note 23 to the consolidated financial statements.

Loan payable to subsidiaries are made on terms equivalent to those that prevail in arm’s length transactions.

7 CONTINGENT LIABILITIES

The disclosures in note 31 to the consolidated financial statements are consistent with those for the Company.

8 SHARE BENEFIT CHARGES

The disclosures in note 28 to the consolidated financial statements are consistent with those for the Company except that

the charge for the year is partly taken to investment in subsidiaries, as set out in note 2.

9 RELATED PARTY TRANSACTIONS

The aggregate amounts payable to key management personnel, considered to be the Directors of the Company, as well as

their share benefit charges is detailed in note 23 to the consolidated financial statements.

During the year, the Company did not pay dividends to its shareholders (2021: £43.8m) (see note 11 to the consolidated

financial statements). During the year, the Company did not receive any dividends from its subsidiaries (2021: £37.8 million).

During the year, share benefit charges in respect of options and shares of the Company awarded to employees of subsidiaries

totalled £6.8m (2021: £5.1m). During the year, the Company did not charge its subsidiary for cost of awards (2021: £6.8m).

During the year, the Company repaid £6.2m to its subsidiaries (2021: £7.1m) and recorded £0.8m (2021: £1.0m) interest

expenses in respect of the loan which were recharged to other Group entities.

At 31 December 2022, the net amounts owed by subsidiaries to the Company were £276.8m (2021: £72.9m).

The Company has a loan receivable with a subsidiary, Gisland Limited. The balance of this loan at 31 December 2022 is £163.9m

(31 December 2021: £nil). This loan accrues interest at a rate of 4.4% for which the Company recognises as interest income. This

loan is not repayable on demand and has no fixed date of settlement, it is therefore classified as a non-current asset.

The Company has a loan payable to a subsidiary, Random Logic Limited. The balance of this loan at 31 December 2022 is £20.4m

(31 December 2021: £17.5m). This loan accrues interest at a rate of 4.4% for which the Company recognises as interest expense.

This loan is not repayable on demand and has no fixed date of settlement, it is therefore classified as a non-current liability.

10 DEFERRED TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for income tax purposes. Following a change in the company’s

tax residence to the United Kingdom, deferred tax is recognised at the UK tax rate. As at 31 December 2022, the Company has

a deferred tax liabilities of £nil (2021: £1.3 million) partially offset by deferred tax asset of £nil (2021: £1.0 million).

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED

888 Holdings PLC Annual Report & Accounts 2022204

FINANCIAL STATEMENTS

COMPANY INFORMATION

Registered office

888 Holdings Plc

Suite 601/701 Europort

Europort Road Gibraltar

Tel: +35020049800

888 Holdings Plc

1 Bedford Avenue

London

WC1B 3AU

Further information

Further information about the Group

can befound on our corporate website

corporate.888.com

To contact the Investor Relations team

email ir@888holdings.com

To contact the company

secretary email

corporate.secretary@888holdings.com

SHAREHOLDER INFORMATION

Shareholder services

All enquiries relating to Ordinary

Shares, Depository Interests, dividends

and changes of address should be

directed to the Group’s Transfer Agent:

Link Asset Services

The Registry

34 Beckenham Road

Beckenham

Kent

BR3 4TU

Tel: 0871 664 0300

www.signalshares.com

Principal bankers

Barclays Bank Plc

1 Churchill Place

London

E14 5HP

Legal advisers

Latham & Watkins

99 Bishopsgate

London

EC2M 3XF

Hassans

7/63 Line Wall Road

Gibraltar

Herzog Fox Neeman

Asia House

4 Weizman Street

Tel Aviv

Israel 64239

Company secretary

The company secretary

isElizabeth Bisby.

Email:

corporate.secretary@888holdings.com

Strait Secretaries Limited

57/63 Line Wall Road Gibraltar

External auditors

Ernst & Young LLP

1 More London Place

London

SE1 2AF

United Kingdom

EY Limited

PO Box 191 Regal House

Queensway

Gibraltar

Corporate brokers

Jefferies International Limited

J.P. Morgan

888 Holdings’ commitment to environmental issues is reflected in

thisAnnual Report, which has been printed on Magno Satin, an FSC

certified material.

This document was printed by Park Communications using its

environmental print technology, which minimises the impact of printing

on the environment, with 99% of dry waste diverted from landfill. Both

the printer and the paper mill are registered to ISO 14001.

888 Holdings PLC Annual Report & Accounts 2022

888 HOLDINGS PLC

Suite 601/701 Europort

Europort Road

Gibraltar

corporate.888.com