888 HOLDINGS PLC

Annual Report and Accounts

2021

MADE FOR THE FUTURE

888 Holdings plc // Annual Report and Accounts 2021

INTRODUCTION

OUR BUSINESS IS MADE

FOR THE FUTURE.

OUR PRODUCTS ARE

MADE TO PLAY.

Our vision is to become a global leader

in online betting and gaming.

Our mission is to lead the online

gambling world in creating the best

betting and gaming experiences. We

aim to create unrivalled moments of

excitement in people’s day-to-day

lives by developing state-of-the-art

technology and products that provide

fun, fair and safe online betting and

gaming entertainment to customers

around the world.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

INSIDE THIS REPORT

1. STRATEGIC REPORT

At a Glance 02

Chair’s Statement 04

CEO’s Strategic Report 06

Strategy Overview and

William Hill Acquisition 10

Our Business Model 12

Product Leadership 14

World Class Brands 18

Customer Excellence 20

Key Performance Indicators 22

Market Review 24

ESG & Sustainability 28

Made to Play Safely 30

Made Together 34

Made Greener 38

Financial Review 42

Stakeholder Engagement 48

Risk Management Strategy 50

Viability Statement 60

2. GOVERNANCE

Board of Directors 62

Corporate Governance Statement 64

Directors’ Report 72

Directors’ Remuneration Report 80

Audit Committee Report 104

3. FINANCIAL STATEMENTS

Independent Auditor’s Report 112

Consolidated Income Statement 122

Consolidated Statement

of Comprehensive Income 122

Consolidated Balance Sheet 123

Consolidated Statement

of Changes in Equity 124

Consolidated Statement

of Cash Flows 125

Notes to the Consolidated

Financial Statements 126

Company Balance Sheet 160

Company Statement

of Changes in Equity 161

Company Statement

of Cash Flows 162

Notes to the Company

Financial Statements 163

Shareholder Information 166

Company Information 167

Find out more about us on our website

corporate.888.com.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

888 HOLDINGS PLC

Annual Report and Accounts 2021

888 – A global leader

888 is one of the world’s leading

online betting and gaming

companies. Our mission is to

lead the gambling world in

creating the best betting and

gaming experiences. We aim

to create unrivalled moments

of excitement in people’s day-

to-day lives by developing

state-of-the-art technology

and products that provide fun,

fair and safe online betting

and gaming entertainment

to customers around the world.

888 has been at the forefront of

the online gaming industry since

its foundation in 1997, leveraging its

proprietary technology to provide

players and B2B partners an innovative

and world-class online gaming

experience.

The Group is structured into two lines

of business: B2C, under the 888 brands,

and B2B, primarily conducted through

Dragonfish, which provides partners

a leading platform through which to

establish an online gaming presence

and monetise their own brands in a

safe and responsible manner.

To read more about our brands, how

we generate revenue, and how we are

driving growth, see page 12.

AT A GLANCE

Our global footprint

We operate on a locally regulated basis

in 18 markets across Europe and the US.

• UK

• Gibraltar

• Ireland

• Germany

• Romania

• Spain

• Italy

• Denmark

• Malta

• Sweden

• Portugal

• US:

Nevada

Delaware

New Jersey

Colorado

Pennsylvania

Virginia

Michigan

Industry leading brands

888 is a globally recognised

brand built around our key values.

Read more on pages 30 to 33

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Our revenue split

Well diversified geographic

mix with a focus on

regulated markets.

REVENUE BY REGION

40% – UK

12% – Italy

34% – EMEA

13% – Americas

1% – RoW

REVENUE BY PRODUCT

Gaming – 83%

Betting – 13%

B2B – 4%

FY2021

Revenue

$980m

Percentage of revenue from online

100%

Employees

1,900+

Licences

% locally regulated or taxed revenue

74%

Languages offered

17+

Offices

Countries

100+

Currencies offered

18+

Total actives for the year

2.2m

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

CHAIR’S

STATEMENT

Acquisition of William Hill

In September 2021 888 announced the

proposed acquisition of the non-US

business and operations of William Hill

from Caesars Entertainment, Inc. at

an enterprise value of £2.2 billion (the

“Acquisition”). The proposed Acquisition

was made possible by the great progress

made over recent years across 888.

The Acquisition would create a leading

operator in the global online betting and

gaming industry by bringing together two

highly complementary businesses and

combining two of the industry’s leading

brands.

William Hill is a leading omni-channel

betting and gaming company, licensed

in 14 jurisdictions across Europe, and

operating approximately 1,400 retail

locations in the UK as well as serving over

three million customers online globally. It

is the number one betting brand in the UK

in terms of awareness and is a top-three

brand by revenue across both retail and

online sports betting in the UK.

The Acquisition represents a

transformational opportunity for 888 to

significantly increase its scale, further

diversify its product mix, and accelerate

the upward shift of its revenue growth

profile through increased revenue

diversification and enhanced positions

in locally regulated markets. In addition,

the enlarged Group will leverage the

complementary strengths of the two

businesses, including benefitting from

an expanded, world-class talent pool.

I am pleased to provide my first Chair’s

Statement on behalf of 888.

2021 was a significant year for the Group

which built on the very strong platform

for growth that has been established

over recent years. During the year 888

refined its long-term corporate strategy

and developed a more ambitious

ESG framework that together better

positions the business to drive continued

sustainable, long-term growth and value

for all stakeholders.

The Group’s notable strategic highlights

during the year included a long-term

partnership with ABG to launch the SI

Sportsbook brand in the US; continued

execution of our regulated markets growth

strategy including launching 888sport

with a local licence in Germany; further

delivery of our product and content

leadership plan including migrating the

significant majority of our sportsbook

volume to our in-house platform; and, the

pending transformational acquisition of

the international (non-US) business of

William Hill (“William Hill”, “WHI” or “William

Hill International”). It is a testament to the

quality and focus of our management

teams and dedication of our colleagues

that we are reporting another year of

record financial results alongside this

strong strategic progress.

“Our new ESG framework reflects the scale of

888’s ambitions to be one of the top performing

and most trusted operators in the global betting

and gaming industry.”

LORD MENDELSOHN

Non-Executive Chair

The combination of the two businesses is

expected to deliver significant operating

efficiencies, including substantial

estimated pre-tax cost synergies leading

to improved profit margins and stronger

cash generation. With its focus on

regulated markets, the Board believes

the enlarged group will be able to offer

customers world-class products that

are delivered across a unified, scalable

technology platform, in turn driving

sustained growth and shareholder value

creation over the medium and long term.

Environment, Social &

Governance (ESG)

At the beginning of 2022 we were pleased

to launch our first comprehensive ESG

framework, Made for the Future, to create

a clearer blueprint to support the Group’s

ambitions to be one of the top performing

and most trusted operators in the global

betting and gaming industry.

This framework builds on the Group’s

investments in recent years to improve

in safer gambling, increase employee

diversity, support local communities, and

reduce the Group’s environmental impact.

However, the Board recognises that there

is more that we can and must do to drive

further improvements in each of these key

areas over the coming years.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

On 1 March 2022, the Gambling

Commission of Great Britain (UKGC)

announced that 888 had been issued with

a penalty of £9.4 million, and a warning

about historic failings of certain of the

Group’s former safer gambling and anti-

money laundering policies, procedures

and controls.

The Board is disappointed we didn’t

meet the requirements of the UKGC. It is

committed to ensuring that there can be

no repeat of this situation.

The UKGC recognised that 888 took

corrective steps to address the identified

failings, and the Board will closely monitor

compliance with these steps. 888 will

undertake an independent audit of the

implementation of its updated policies,

procedures and controls within the next 12

months. Alongside promptly implementing

appropriate actions to ensure it is fully

compliant with its licensing obligations,

888 has in parallel implemented further

important safer gambling initiatives which

are set out in more detail in our ESG &

Sustainability Report.

The Board’s role throughout this process

has been to review the circumstances

leading to the failings, and to monitor

the implementation of the remediation

actions, taking a proactive role on behalf

of all stakeholders in ensuring 888 is

properly protecting its customers.

The Board is committed to ensuring that

issues such as safer gambling, the climate

change agenda, diversity and inclusion,

and community engagement are

consistently incorporated into the Group’s

strategy and decision making. To reflect

this, in April 2021 a new ESG Committee

of the Board was established, comprising

Senior Independent Director Anne de

Kerckhove, Non-Executive Director Mark

Summerfield, and myself. The Committee

is providing Board-level oversight of

888’s ESG strategy, targets and progress

against key performance indicators, and

has overseen the development of the

Group’s long-term priorities.

888’s new ESG framework reflects the

Board’s long-term approach to investment,

and provides the foundation for our future

plans. The framework is built around three

pillars, underpinned by a foundation of

robust, structured corporate governance:

• Pillar One: Made to play safely.

Compliance with regulations is a given

for our business, but 888 aims to go

beyond this, with a philosophy built

around normalising the use of safer

gambling tools by customers. 888 aims

to help players understand and manage

their gambling behaviour, enabling them

to see their play clearly, and use quick

and simple tools to limit their activity.

However, we recognise that supporting

players is not enough. We know

that some can experience harm

from gambling, and we will use our

technology, real-time data, and

growing understanding of the markers

of harm to identify potential harm

and stop it before it happens. We also

recognise that safer gambling is an

area for continuous improvement, and

we will continue to work closely and

collaboratively with industry stakeholders

to drive ongoing improvements in safer

gambling and customer protection.

• Pillar Two: Made together.

It is the talent, energy and skills of

888’s employees that drive the Group’s

success. Therefore 888 will continue to

invest heavily in recruiting, developing,

and motivating our people. Yet we

recognise that our obligation as a

responsible employer goes further

than this. Providing a great workplace

is a core social responsibility for 888,

including our programmes to promote

inclusivity, increase diversity, provide

opportunity and engage with our local

communities.

• Pillar Three: Made greener.

The urgency and importance of the

climate crisis requires everyone to

play their part. 888 is committed to

a future in which our customers can

enjoy our products without harming

the environment. Having calculated the

Group’s current emissions, 888 has set a

path to net zero direct carbon emissions

by 2030, as outlined in the Group’s 2021

Carbon Report.

Read more about our new Made for the

Future framework and associated targets

in our ESG Report on pages 28 to 41.

Board updates

I formally took over as Chair in March

2021 following a smooth transition from

Brian Mattingley. Brian was our longest

serving Director, having been on our

Board for more than 15 years. He served

as the Group’s CEO before becoming

Chair. The Board is indebted to Brian

for his substantial contributions to the

success of 888 during his tenure.

Anne de Kerckhove was formally

appointed as Senior Independent Director

in March 2021 as we looked to strengthen

our corporate governance. In addition,

at the Annual General Meeting in May

2021 Zvika Zivlin retired from the Board

and we thank Zvika for his invaluable

contributions.

Anticipating the future ambition of

the business, particularly in light of the

proposed Acquisition, the Board is in the

process of creating a programme that will

further strengthen the Group’s corporate

governance through the appointments of

additional Non-Executive Directors with

relevant expertise. Any announcements

regarding this process will be made at the

relevant time.

Outlook

The Board is very encouraged by the

Group’s performance in 2021, which

has successfully built on the excellent

strategic progress delivered during

recent years. The business has excellent

momentum underpinned by its world-

class technology, the global 888 brand,

a fantastic team, and market-leading

products. The combination with William

Hill International would create a global

industry leader, with outstanding

technology, talent and brands as well

as more diversified revenue streams, a

stronger position in key regulated markets,

and a step-change in scale.

I am very excited about the Group’s

prospects and your Board and executive

leadership team will continue to ensure

that 888 remains resolutely focused on

enhancing long-term value creation for

all stakeholders.

LORD MENDELSOHN

Non-Executive Chair

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

CEO’S

STRATEGIC REPORT

Introduction

2021 was a very successful year for 888,

during which we delivered outstanding

progress against our key strategic

objectives and continued to position

the Group to become a global leader

in online betting and gaming. Strategic

progress for the year included further

expansion across regulated markets,

the continued delivery of our product

leadership plan, a step-change in our US

growth strategy, and the announcement

of our proposed landmark acquisition of

William Hill.

Underpinning this progress are the

Group’s key strengths, namely our world-

class technology that supports our

product leadership plan, our global 888

brand and data-driven marketing, and

our customer focus. All of this is enabled

by our fantastic team of talented and

committed professionals across the

world. These strong foundations provide

the basis for us to reshape the business

for a bigger and better future, enlarged

through the combination with William Hill,

with a refined focus on our core growth

drivers with the sale of our bingo business,

and supporting rapid expansion in the

US through our strategic partnership with

Sports Illustrated. The core competitive

advantages of 888, that have been

developed over nearly 25 years, combined

with our strategic expansion in the most

attractive markets, further bolsters our

excitement for the future.

Our new strategy is built around three

areas, focusing on key markets, investing

in our pillars of sustainable competitive

advantage, and engaging in value-

enhancing mergers and acquisitions

(M&A).

1) Market focus. 888’s sophisticated

market framework is based on a

combination of market sizing, regulation,

marketing, PEST analysis (Political,

Economic, Social, and Technological),

and other factors to create a clear

understanding of the addressable market

opportunities. This framework guides

the Company’s focus on clear market

archetypes:

a. Core markets. Our core markets of

the UK, Italy and Spain are large,

well-regulated markets where 888 has

strong market positions. In 2021, these

markets generated 59% of revenue.

We aim to further grow market share

in these markets, becoming the casino

brand of choice.

b. Growth markets. Our growth markets

represent a small cohort of high-growth

markets that made up 21% of revenue

in 2021. These are typically regulating

or newly-regulated markets that have

attractive long-term growth potential,

where we are investing heavily to build

888 into a top tier brand.

“888 has a clear framework to deliver long-term,

sustainable growth, and over the course of 2021,

we further refined and clarified our strategy that

will enable us to achieve our potential across a

diverse range of geographic markets.”

ITAI PAZNER

Chief Executive Officer

A record year of financial results

2021 was another record year for 888, as

we delivered mid-teens revenue growth

and continued to execute against our

core growth strategy. We delivered

record revenues of US$980 million, with

74% derived from locally regulated and

taxed markets as we continued to see

market share gains in our key markets.

Adjusted EBITDA was US$165 million, at a

margin of 16.8%, with growth in adjusted

EBITDA despite a significant increase

in investment in the US through our SI

Sportsbook business.

Read more about our financial results

on pages 42 to 47.

A clear framework to deliver

shareholder value creation

888’s mission is to lead the online

gambling world in creating the best

betting and gaming experiences. We

aim to create unrivalled moments of

excitement in people’s day-to-day

lives by developing state-of-the-art

technology and products that provide

fun, fair and safe online betting and

gaming entertainment to customers

around the world.

888 has a clear framework to deliver

long-term, sustainable growth, and over

the course of 2021, we further refined and

clarified our strategy that will enable us

to achieve our potential across a diverse

range of geographic markets.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

c. The US. The nascent US online

betting and gaming market presents

a significant long-term strategic

opportunity for 888, leveraging our

leading technology and operating

capabilities in partnership with the

iconic American Sports Illustrated

brand through SI Sportsbook.

d. Long-term investment markets. There

are many markets with significant

long-term growth potential, where 888

will selectively invest to build leading

market positions, through either M&A or

partnerships and collaborations.

e. Optimisation markets. Outside of these

markets, 888’s global capabilities and

multi-jurisdictional licences enable it

to service customers from over 100

additional countries, in a low-risk and

compliant way. This global framework

generates strong incremental returns

on our asset base, leveraging the global

scalability of the 888 platform.

2) Sustainable competitive advantages.

888’s long-term success is built around

its core capabilities, developed and

refined over nearly 25 years of operations,

that have created strong sources of

sustainable competitive advantage:

a. Product and content leadership.

Creating the best possible online

gambling products benefits the Group

by differentiating 888 from competitors

in the eyes of consumers, helping

to improve cost per new customer

acquisition, and improving player

retention by offering customers the

best possible entertainment and

content, above all in a safe and secure

environment.

b. World class brands. The 888 brand is

one of the global industry leaders, and

amongst the top-three recognised

gaming brands in our core markets. This

strong brand awareness is built around

our key values, which are continually

reinforced throughout our activities,

promotions and advertising campaigns.

We supplement our brand investment

with data-driven online marketing that

harnesses 888’s proprietary technology,

access to real-time data, and AI

capabilities to drive the most efficient

investment decisions across marketing

and product, enhancing the return on

investment.

c. Customer excellence. Delivering a

quality customer experience in a safe

and affordable manner increases

the proportion of those who become

long-term customers, and improves

the reputation of our brands, leading

to enhanced return on investment. This

includes the use of customer insights

to drive decision making, and all takes

place while ensuring a steadfast focus

on safer gambling.

3) Value enhancing M&A. 888 has a

structured and systematic approach

to M&A activity, focusing its efforts to

delivering long-term value creation in the

most attractive end markets. We continue

to assess a range of potential expansion

opportunities as we look to build leading

positions in the most attractive end

markets.

A clear strategy to drive long-term value:

These clear priorities guide our plans for

the business and are driving increased

focus as we prioritise resources to invest

where there are the strongest long-term

opportunities, and where our assets and

brands give us sources of sustainable

competitive advantage.

A year of outstanding

strategic progress

We were delighted to make strong

progress across each of the key elements

of this strategic framework during 2021,

as outlined below:

Market focus: Our focus on growth in

regulated markets continued, with locally

regulated or taxed revenues reaching 74%

of our total (up from 73%). As additional

countries regulate online gambling such

as Netherlands, Germany and Canada,

we believe that the mix of revenue from

regulated markets will continue to increase

in the coming years.

Our core markets (UK; Italy; and Spain) saw

revenues grow by 18% in the year despite

the very strong comparative period, and

we believe that we continue to hold or take

market share. Our goals for 2022 are to

solidify our position in these markets by

focusing on product, brand, and customer

excellence. This is more important than

ever in Italy and Spain, where marketing

restrictions mean we must compete on

product and leverage our established

brand presence. As the UK Gambling Act

also considers marketing restrictions we

must continue to focus on establishing

our brand, and ensuring we continue to

offer best in class products and customer

experiences.

Our growth markets saw revenue increase

by 26% in the year, despite the temporary

withdrawal from the Netherlands in Q4

and regulatory change in Germany. This

excellent result reflects our efforts to

become a leading brand in these markets,

and we believe we made significant market

share gains across several key territories

including Romania and Ireland during the

year. In Germany we received our local

sports betting licence and went live with

the new 888sport.de in August. We continue

to invest in this market to grow the 888

brand, including signing a sponsorship deal

with Bundesliga football team, RB Leipzig.

We have applied for a gaming licence

in Germany and are hopeful this will be

issued in the near term, with appropriate

enforcement action ramped up against

non-compliant operators. This should see

our German business return to growth for

2022. We are also excited for the launch of

the regulated online betting and gaming

market in Ontario, Canada, scheduled for

Q2 2022, where 888 has a strong brand

presence.

In the US, our revenue was up 6%, with the

more muted growth rate reflecting our

reduced investment in the 888 brand ahead

of the launch of SI Sportsbook in Q3, and

the significant investment in promotional

generosity to support this. SI Sportsbook

went live in Colorado in September, and

we have seen positive initial customer

trends. We continue to test and learn with

our product and promotions ahead of

future state launches set for 2022. We were

pleased to receive a temporary sports

betting licence in Virginia in the year and

continue to work on additional market

access and licensing agreements, with a

clear roadmap of state prioritisation.

Across our optimisation markets revenue

was flat, in line with our expectations

as we reduced marketing investment in

certain markets such as the Nordics, where

we were seeing lower levels of returns.

888’s highly scalable global platform

enables it to generate high incremental

return on investment from this large and

diverse group of markets, powered by the

internationally-recognised 888 brand.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

Sustainable competitive

advantages:

Product and content leadership:

During the year we launched several

notable new products, including the

successful roll out of our in-house

developed sports betting product to our

largest market (the UK), and concluded

the seamless migration of over 70% of

the sport business to the new platform.

We were delighted to have our sportsbook

development and innovations recognised

at the prestigious 2021 EGR Operator

Awards, winning the In-House Product of

the Year category.

The Group continues to invest in its

flagship 888casino product. We launched

over 870 new casino games during

the Period, and customers are now

also enjoying more than 160 exclusive

games developed by Section8, 888’s

in-house games studio that produces

high-quality games which consistently

rank among some of the most popular

with our customers. Over the next few

years we plan to double our investment

in Section8 to support our content

leadership focus. We continue to improve

the personalisation of our product, driven

by AI algorithms that ensure players are

offered the content most relevant to them.

We were also delighted that our world-

class online casino product was again

recognised at the 2021 EGR Operator

Awards, as we were named winner in the

Casino Operator of the Year category for

the third time.

The Group continued to benefit from

the launch of its latest poker platform,

internally called Poker8, at the end of

the prior year. We also launched in

Pennsylvania in the US during the year

as part of our long term partnership with

the World Series of Poker. This represents

the debut of the new Poker8 platform in

the US and we are excited to roll this out

to further states subject to regulation.

We continue to launch new features

with a focus on social engagement,

including Broadcasting, allowing ‘cards

up’ streaming on social media, and the

Show/muck card, giving the ability to

reveal just a single card at the end of the

hand thereby enhancing the gameplay to

mirror real life experience.

World class brands: During the year,

we developed and defined clear brand

values for 888, designed to support our

long-term strategic goals, increase

advocacy, and ultimately contribute

to lower customer acquisition costs.

During 2022, we will relaunch the 888

brand under a master brand strategy

called Made to Play, built on the solid

foundations of our award winning poker

campaign by the same name. Our brand

values truly represent who we are as 888

and I am excited to see this brought to life

throughout 2022 and beyond.

Alongside our investment in brand, one

of 888’s key competitive advantages is

in data-driven performance marketing,

utilising sophisticated data capabilities

and AI to optimise marketing spend

in real time across a broad range of

marketing channels to drive superior

returns on new customer acquisition. Our

investments in efficient and responsible

marketing are critical to the development

of our brands, and marketing investment

increased by 29% in the period, helping

to deliver an increase of 4% in average

monthly actives.

Customer excellence: During the year we

expanded our customer insight team,

as we seek to better understand what

good looks like, and build our product,

marketing and offers to create the best

experiences possible.

Building our products and brands around

solving customer needs is only the first

part of the customer excellence pillar;

we also need to provide excellent

customer service if we want to retain

customers and build loyalty. 888 had

over 3 million customer interactions in

2021, through multiple channels including

email, live chat, telephone calls and social

channels. For many, these interactions are

the only point of direct contact with 888,

and our customer service team members

are the faces and voices of our brand

and Company.

During the year, we continued to invest

in the team, our systems and policies

to help us deliver our brand values to

our millions of customers, in 17 different

languages. I am pleased to report a

12% improvement in customer

satisfaction, reflecting improvements

to our response rates.

Our progress here is not slowing, and

in the coming years our continued

investments in training, automation,

chatbots and technology will continue

to deliver ongoing improvements in our

service levels, ensuring that 888 becomes

the brand of choice for online gambling.

Rapidly evolving technology and

consumer habits mean that continuous

progress to make gambling safer is

essential. As a result, we leverage the

same unique technology, analytical

capabilities, and product development

expertise that underpins the success of

our gaming brands to make gambling

safer. An example of this is our in-house

developed player behaviour monitoring

technology called the Observer, which

uses sophisticated algorithms to flag

unusual or potentially concerning

customer activity to our highly trained

safer gambling team. During the year

we continued to optimise and develop

the Observer including lowering certain

thresholds for intervention, and there were

almost 1.3 million customer interactions as

a result of Observer flagged activity.

One of our most significant technology

investments during the year was the

continued roll-out of the Control Centre,

our customer-focused interface that

provides a “one stop shop” for safer

gambling support. The product is

designed to enable customers to monitor

their gambling activity through intuitively

presented data, providing greater levels

of transparency in real-time. In addition

to providing easy-to-access information,

the Control Centre offers a suite of tools to

help customers control their activity.

CEO’S STRATEGIC REPORT cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Value enhancing M&A: During the

year, we announced the proposed

transformational acquisition of the non-

US assets of William Hill, which we expect

to complete in Q2 2022. The deal would

deliver significant scale benefits, as well

as building leading positions in some of

our highest priority markets, underpinned

by a powerful portfolio of brands with the

introduction of William Hill and Mr Green.

Read more about the strategic rationale

for the William Hill deal on page 04.

In addition to this, we announced the

sale of our bingo business for up to

US$50 million to a division of Broadway

Gaming, in order to increase focus on

our core growth strategy including US

expansion. The bingo business has been

an important part of 888’s history, and

over many years we have developed an

advanced B2B offering alongside a suite

of popular consumer-facing brands. I wish

the team well for the future and thank

them for all their hard work over the years.

As we entered 2022 we continued to

develop our plans to capitalise on the

significant long-term potential of several

emerging markets, and we have a healthy

pipeline of opportunities for M&A or local

partnerships.

Preparing for integration

We took bold strategic M&A decisions

in 2021, with the announcement of our

proposed plans to divest bingo and

significantly expand and diversify our

business through the potential acquisition

of William Hill. During the second half

of the year, we invested significant time

preparing for the integration of William

Hill, including implementing management

and operational changes that will enable

us to support our business momentum,

while laying the groundwork for our future

as an enlarged business.

As we continued to face a challenging

backdrop considering the COVID-19

pandemic, we developed clear plans

to ensure that our core strengths are

reinforced. This includes continued

investments in product and content,

increased focus on our core and growth

markets, and empowering our teams to

deliver at pace.

We have made strong progress in our

plans to integrate William Hill and, as we

move into 2022, we are excited about the

opportunities ahead of us, particularly as

we significantly expand the management

capabilities of the enlarged group.

We have significant confidence in our

integration plans and the delivery of

substantial synergies, creating a powerful,

scalable global business.

We are excited about the growth

potential of the enlarged business, which

would benefit from a global, scalable

technology stack, that delivers world-class

betting and gaming products into high

structural growth markets across a range

of iconic and market-leading brands.

Culture and team

Our historical success and future growth

plans are only made possible due to

the quality of our global talent and our

strong, dynamic culture. Our unique

culture places significant emphasis on

empowering employees, together with

an overarching focus on wellbeing. This

creates an authentic, caring, yet exciting

environment that enables innovation and

motivates and drives our employees to

deliver against our objectives.

Our people strategy is aimed at

increasing employee engagement

through talent development and creating

an inclusive working environment with

personalised support that promotes

growth for our people and the business.

During the year, as part of our focus

on diversity and talent development

we launched our inaugural SheLeads

development programme for women

at 888, with overwhelmingly positive

feedback from the initial participants.

This programme will support our goal

to increase the proportion of women in

leadership roles across our business, and

particularly within technology. We also

continued our PRO internal development

programme, which is designed to

promote professional growth and career

development for some of our key talent,

with a new cohort of future leaders taking

part in 2021.

We have also had to continue to adapt

our working practices in light of the

challenges presented by the ongoing

pandemic. I have been incredibly proud

of the resilience, creativity, and can-do

attitude of our teams throughout this

time. Their skill and dedication have

been critical to our record performance,

and I would like to thank everyone in the

business for their hard work.

As we look ahead, we are incredibly

excited at the prospect of welcoming our

new colleagues from William Hill. One of

the major attractions of combining these

two fantastic businesses is the amazing

team we will create, with world-class

expertise across safer gambling, sports

betting, online gaming, digital marketing,

and retail. We are looking forward to

learning from each other and bringing

together the best of both businesses in

the years to come.

ITAI PAZNER

Chief Executive Officer

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

STRATEGY OVERVIEW AND WILLIAM HILL ACQUISITION

Our strategy

A clear strategy to drive long-term value:

These clear priorities guide our plans for the

business, and are driving increased focus as

we prioritise resources to invest where there

are the strongest long-term opportunities, and

where our assets and brands give us sources of

sustainable competitive advantage.

Our new strategy is built around three parts;

focus on key markets, invest in our pillars of

sustainable competitive advantage, and

engage in value-enhancing M&A.

WIlliam Hill Acquisition

In September 2021 888 announced that it agreed

to acquire the non-US business of William Hill from

Caesars Entertainment, Inc at an enterprise value of

£2.2 billion. Read more about the William Hill transaction

on page 04.

MARKET FOCUS

a. Core markets

b. Growth markets

c. USA

d. Long-term investment markets

e. Optimisation markets

Clear understanding of the addressable

market opportunities to guide focus on clear

market archetypes and generate sustainable

growth.

SUSTAINABLE COMPETITIVE

ADVANTAGES

a. Product and content leadership

b. World class brands

c. Customer excellence

888’s long-term success is built around

its core capabilities, that have created

strong sources of sustainable competitive

advantage.

VALUE ENHANCING M&A

888 has a structured and systematic

approach to M&A activity, focusing its

efforts to deliver long-term value creation

in the most attractive end markets.

The combination of 888 and William

Hill will create a powerful enlarged

business, that will be strongly growth-

oriented, benefiting from a clear

scale advantage and strong product

and geographic diversification.

With a focus on attractive high-

growth regulated markets, it will be

able to offer customers world-class

products, supported by leading

betting and gaming brands, driving

sustainable growth and shareholder

value creation over the medium and

long term.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

MARKET FOCUS

• Positions the business as a leader in our core and

growth markets. Top-3 positions in the UK and Spain,

and top-5 positions across a wide range of markets

• Creates a platform for strong growth in the most

attractive regulated or regulating markets

• Increases regulated and taxed revenue mix

(pro forma FY20: 86%), improving sustainability

SUSTAINABLE COMPETITIVE ADVANTAGES

• Enhanced exposure to sports betting, through iconic

world-class William Hill brand

• Leveraging combined skills of employees and best of both

sharing across proprietary technology, product, brand,

and marketing

• Omni-channel opportunity to leverage UK retail footprint

to improve experience and drive new customers

Accelerating progress

Pro forma FY20 revenue

of enlarged group

$2.5bn

Pro forma FY20 Adjusted EBITDA

of enlarged group

$464m

BECOMING A

GLOBAL ONLINE

BETTING AND

GAMING LEADER

The Acquisition will create a global online betting

and gaming leader by bringing together two highly

complementary businesses and combining two of the

industry’s leading brands, and significantly accelerates

progress against 888’s strategy.

Combined employees

>12,000

Combined annual active customers

>5m

VALUE ENHANCING M&A

• Financially attractive with substantial synergies

expected, along with potential revenue upside

• Step change in scale positions the Enlarged Group

to take advantage of growth opportunities, whilst

simultaneously driving operating leverage

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

HOW WE GENERATE REVENUE

Games of chance involving customers playing

against ‘the house’ across online versions of

casino table games and slots.

In these games, the house has a statistical

advantage or ‘edge’, so we generate a margin,

with casino revenue representing the difference

between the amounts of bets placed by

customers less amounts won.

In poker, players play against each other and

we charge a commission from each hand or

entry fees for tournaments.

Customers place bets on a variety of events

against ‘the house’, at different odds which are

determined by 888sport.

The Group attempts to set odds such that

there is built-in theoretical margin in each

set of odds and each market, which over

the long term delivers a fairly stable betting

win margin, but given the variance and

unpredictability in sporting results, this

can be volatile in the short term.

Gaming Betting

Gross gaming revenue

Less: free bets and promotions

Revenue

Less: cost of sales

Gross profit

Less: marketing costs

Contribution

Less: other operating costs

EBITDA

OUR BUSINESS MODEL

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

HOW WE ENABLE GROWTH

Reinforcing our sustainable competitive advantages is

a core pillar of our strategy. These three key competitive

advantages act as the enablers for our plans and drive

market share gains. All of this is made possible and

underpinned by our talented people.

We are well positioned in our markets to deliver an

outstanding experience to our customers.

Read about our market potential on pages 24 to 27.

Product and content

leadership

Pages 14 to 17

People and team

Pages 34 to 37

Customer excellence

Pages 20 and 21

World-class brands

Pages 18 and 19

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

Our mission is to lead the online gambling

world in creating the best betting and gaming

experiences, and the development of best-in-

class products.

1. Safety – All of 888’s

products must, above

all else, keep gambling

safe and fun.

Product

Focus

888 continues to focus

all product development

using the following six key

product principles:

2. Usability – One of

the most important

principles we apply to

all product development

is that the products

must be quick, simple,

and intuitive to use.

3. Content-rich – Our

products must also be

content-rich, thereby

enabling customers to

access the different

types of games and

entertainment they

want.

Casino

888casino offers a vast array of content to suit all

tastes, with AI driven personalisation to present

customers with the content that is most relevant

to them.

The cutting-edge platform now hosts almost 3,000 games

including more than 160 from Section8, our in-house games

development studio.

New features in 2021:

• Improved cashier experience within the app to improve

user experience around the core activity of depositing and

withdrawing.

• Embedded live casino, which enables players to watch a video

stream of certain casino games whilst navigating through the

homepage, without having to enter the game first.

• Live casino daily jackpots, improving engagement, and more

personalised home pages ensuring customers can get straight

into the entertaining games they love.

Technology businesses, from media and entertainment

to travel and banking, are consistently innovating and

raising the standards expected by consumers of what

good products and technology look like. 888 benchmarks

itself against both its direct industry competitors as well

as the broader digital entertainment landscape, to ensure

a consistently outstanding quality of product.

888’s fully owned proprietary technology across all verticals

enables full flexibility over player personalisation and user

experience. Creating the best possible online gambling

products benefits the Group by differentiating 888 from

competitors in the eyes of consumers, helping to improve

cost per new customer acquisition, and improving player

retention and increasing lifetime value by offering customers

the best possible entertainment and content, above all in

a safe and secure environment.

PRODUCT

LEADERSHIP

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

4. Entertainment – The

range of content and

events we offer our

customers is just half

the story. We must

utilise our analytics

capabilities and AI to

ensure that we serve

and make accessible

the most relevant

gaming content

to each customer.

5. Innovation – Product

developments should be

driven by incremental

improvements, as well

as creative new ideas

and products.

6. Scalability – New

products must be

built once and able to

be deployed across

our brands and

multiple countries and

languages, all in line

with local regulations.

This provides 888 with

economies of scale and

thereby drives superior

return on investment.

Find out how we stay on

top in a Q&A with our

Head of Section8 games

studio on the next page.

Sport

Early in the year we successfully migrated the

majority of our sports betting volumes to our new

in-house developed platform.

The new platform marks a step-change in the development

of 888sport. It provides customers with a quicker and simpler

user experience with greater levels of personalisation. The

cutting-edge sportsbook platform offers customers a wide

variety of betting markets and unique products such as

BetFinder, BetFeed and BetBuilder, as well as personalised

recommendations. Our in-house platform and data capabilities

enable us to offer truly differentiated products, such as BetFeed,

which uses real-time data to present the most popular bets

to customers in a live stream, allowing customers to feel part

of the action and drive a sense of community.

New features in 2021:

• Favourite sports, allowing players to customise the display

ordering around their favourite sports.

• SI Sportsbook’s launch coupled with significant global

improvements to our in-play markets around US focused sports.

• Localised 888sport.de product for regulated launch in Germany.

• Search function enabling quick and simple searching of all

markets to find the bet you want faster.

Poker

888poker on the new Poker8 platform provides a

mobile-first, portrait poker experience, with a focus

on sociable features at the poker table, and quick

and intuitive access to games.

We continue to launch new features to enhance the gameplay

and mirror the real-life poker experience with a focus on social

engagement.

New features in 2021:

• Broadcasting, allowing ‘cards up’ streaming on social media.

• Show/muck card, giving the ability to reveal just a single card

at the end of the hand.

• Launching the Omaha variant of poker on mobile.

• Launching our popular fast-format Blast games directly within

the 888sport app, meaning players can play a quick game of

poker without leaving the sport app.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

PRODUCT LEADERSHIP cont.

Q&A with Ofir

Gal-Mor, Head of

Section8

section8

studio

by 888

Q CAN YOU TELL US ABOUT THE

SECTION8 IN-HOUSE STUDIO? HOW

LONG HAS IT EXISTED, HOW MANY

STAFF WORK THERE AND WHAT

ROLES DO THEY COVER?

A 888 has been making its own games

almost since inception in 1997. Once

divided into disparate teams, four

years ago all game makers were

consolidated into one unit and

branded “Section8 Studio”.

The studio is constantly growing,

with more than 30 team members

currently spanning all traditional

game making skills; including

developers, testers, project managers,

product managers, game designers,

mathematicians, visual artists, and

sound specialists. Beyond these we

leverage a range of resources from

marketing to compliance across the

wider 888 ecosystem.

This allows us to own the entire

“game life cycle”, from the initial

design phase through to production,

certification, release, and ongoing

maintenance.

Q HOW MANY GAMES DO YOU

PRODUCE A YEAR?

A We focus on high production quality

games, rather than quantity, with

somewhere between five and ten

of the top 20 slots in each market

usually being produced by Section8.

Over the years Section8 has

produced roughly 150 different

games. In a typical year we produce

approximately 15 new games, of

which 10-12 will be video slots and the

rest will be non-slot content such as

roulette games, scratch cards, video

poker formats, and blackjack games.

Founded

2018

Team members

30+

Number of games produced

c.150

New games released each year

c.15

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

“We focus on the

production of high

quality games, rather

than quantity, with

somewhere between

five and ten of the top

20 slots in each market

usually being produced

by Section8.”

OFIR GAL-MOR

Head of Section8

Q WHAT’S THE DEVELOPMENT PROCESS

WITH A NEW GAME, AND HOW LONG

ON AVERAGE DOES IT TAKE TO

CREATE A GAME FROM START TO

FINISH?

A There is no straightforward answer

as games differ greatly from one

another according to many factors,

such as the category, for example

whether it’s a video slot or Blackjack

table game,and production value,

which dictates the design and

resource investment that goes into

any given game.

We typically focus on high production

value video slots that integrate

intricate game design, progressive

jackpots, stunning visuals and, from

time to time, big brands, such as in

the case of the hugely successful

Mad Max Fury Road. We constantly

challenge ourselves to achieve more

and differentiate our offering from

competitors.

The end-to-end process of such a

game can span nearly one year, from

concept to production deployment

across all regulated markets where

888casino is available.

On the other hand, a revamp of a

legacy game can be fully deployed

in half the time and our product

roadmap each year includes a

balance of both types of game

development.

Q WHAT ARE THE MAIN ADVANTAGES

TO 888 HAVING AN IN-HOUSE STUDIO

AND HOW DOES IT HELP 888CASINO

FROM A COMPETITIVE PERSPECTIVE?

WHAT ROLE DO THIRD-PARTY GAMES

PLAY?

A Having an in-house studio allows us to

produce unique games that can only

be played by 888 players, including

branded games such as Mad Max,

and smash hit games such as Safari

Riches.

Third party games are also really

important to our content strategy.

There are some really strong games

produced by third-parties that

customers love, and we want to be

able to offer these to 888’s players.

We see it as being a bit like a high-

end food retailer who wants to offer

customers the big brands that their

customers know, but they also want to

offer their own label items, which are

unique and can be tailored more for

the customer base.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

One of 888’s key competitive

advantages is our approach

to data-driven performance

marketing. Our approach

utilises sophisticated data

capabilities and AI to optimise

marketing spend in real time

across a broad range of

marketing channels, thereby

driving superior returns on new

customer acquisition.

Alongside our investment in new

customer acquisition, we continue

to develop and grow the globally

renowned 888 brand. As the competitive

environment, particularly in our core

markets, continues to evolve, the role

of brand is becoming increasingly

important, and our approach to

marketing continues to adapt to

reflect this.

During the year, the Group developed

and defined clear brand values for

888, designed to support our long-term

strategic goals, increase advocacy, and,

ultimately, contribute to lower customer

acquisition costs. During 2022, we will

relaunch the 888 brand under a new

master brand strategy, called Made to

Play. This new brand language reflects

what 888 stands for, and is built around

our four brand beliefs:

1. Gambling is OK

We believe that gambling is OK, but is not

for everyone. At 888, we love gambling.

For so many, it represents a brilliant

hobby and past time, providing great

enjoyment. We think there is nothing else

in the world of entertainment like placing

a bet, and we aren’t embarrassed to say

it too. As long as it is done with utmost

authenticity and integrity it should

always be seen as OK. However, we know

gambling is not OK for everyone. We

acknowledge the risks that can result

from our products. We are committed

to acting with care, identifying and

preventing people from playing whether

they are underage, vulnerable or cannot

afford to play without causing harm.

2. Innovation is a philosophy

We believe that innovation is a philosophy,

not a department. It is easy to get caught

up in the idea that innovation is the sole

reserve of the research and development

department. Especially in a company

originally seen as a tech start-up. But

we don’t buy that. We see innovation

as a philosophy that runs through the

whole business. An ambition to push for

great new ideas can come from anyone

in the Company. This isn’t always about

complicated, clever inventions but more

often about thinking laterally to create

better customer experiences. Sometimes

that will be clever, cutting-edge

technology but more often than not it will

be a brilliantly effortless simplification of

our offering. Both are valuable innovations

and both are welcome at 888.

WORLD CLASS

BRANDS

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

3. Human centricity

We believe that human centricity beats

customer centricity. When you see people

as customers and customers as numbers

on a profit and loss account, you stop

seeing them as a person. And they are

not just any person either, but someone

who has chosen to come and spend

their hard-earned money with us. So we

invest in them. Give them a personalised

experience. Make them feel valued and

wanted and take the time to think about

what they want and don’t want from us

as a brand. People (both internally and

externally) are our best assets at 888

and that’s why we treat them how they

deserve to be treated.

4. Experienced in fun

We believe that old isn’t boring, it is

‘experienced in fun’. Our heritage is one

of our core selling points at 888 – but it

is easy to talk about it the wrong way.

Established for us doesn’t mean old

fashioned. It doesn’t mean unexciting,

or over the hill. It means that we are

more experienced than anyone else

in providing unrivalled moments of

excitement. In fact, our experience is

something that helps us deliver the best

gambling-based entertainment.

“During 2022, we will

relaunch the 888 brand

under a new master

brand strategy, called

Made to Play.”

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

Developing a clear understanding

of our customers, and the drivers

of consideration and loyalty, is

central to 888’s approach to

business. We seek to understand

as fully as possible what good

looks like, and provide products,

marketing and customer

promotions that deliver on our

mission to create the best online

betting and gaming experience.

Building our products and brands around

solving customer needs is only the first

part of the customer excellence pillar; we

also need to provide excellent customer

service if we want to retain customers

and build loyalty. We offer support in 10

different languages, deal with over 40

different payment methods, and handle

millions of customer interactions each

year across email, live chat, telephone

calls and social channels. For many,

these interactions are the only point of

direct contact with 888, and our customer

service teams are the faces and voices of

our brand and company.

We continue to invest in training,

automation, chatbots, and technology

to deliver ongoing improvements in our

customer service levels, ensuring that 888

becomes the brand of choice for online

gambling.

CUSTOMER

EXCELLENCE

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Central to our efforts to deliver the best

customer experience is creating the

safest possible gambling experience. We

want our customers to enjoy their time

with 888, to play within their means, to be

treated fairly, and to return to us time and

again. We also want them to recommend

888 to their friends and family. Ensuring

our products are safe and fair is a critical

part of this mission. 888 firmly believes

that providing a safe environment for

customers is not only the right thing to

do but also puts the Group in a stronger

position to continue to generate long-

term value for all stakeholders. We

acknowledge the potential risks that

gambling can present, and we are

committed to ongoing improvements to

make gambling safer.

Rapidly evolving technology and

consumer habits mean that continuous

progress to make gambling safer is

essential. As a result, 888 leverages the

same unique technology, analytical

capabilities, and product development

expertise that underpin the success of

its gaming brands to make gambling

safer. An example of this is our in-house

developed player behaviour monitoring

technology called the Observer. We

continually optimise and develop

the Observer by using sophisticated

algorithms to flag unusual or potentially

concerning customer activity to our highly

trained safer gambling team.

One of our most significant technology

investments during the year was the

continued roll-out of the Control Centre,

our customer-focused interface that

provides a “one stop shop” for safer

gambling support, which is now available

to around 40% of our global customer

base, including all of our UK customers.

The product is designed to enable

customers to monitor their gambling

activity through intuitively presented data,

providing greater levels of transparency

in real-time. In addition to providing easy-

to-access information, the Control Centre

offers a suite of tools to help customers

control their activity. This reflects 888’s

ambition to go beyond what is merely

required by regulation when it comes to

safer gambling and to invest further in

user-friendly safer gambling tools.

Read more about the Group’s safer

gambling progress and future priorities

on pages 30 to 33.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

KEY PERFORMANCE INDICATORS

Revenue

US$ million

+15%

2021 980.1

2020 849.7

Definition:

B2C revenue represents the total amount staked or wagered

by customers, less amounts paid out to customers, free bets

and promotional credits, and VAT. It also includes any fees or

charges applied to customer accounts (e.g. foreign exchange

commission). 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:

Revenue increased by 15% in 2021, driven by the continued

success of the Group’s product-leadership focus and continued

expansion across its core and growth markets.

Adjusted EBITDA

US$ million

+6%

2021 165.0

2020 155.6

Definition:

Adjusted EBITDA represents total earnings before interest, tax,

depreciation, and amortisation generated from our operations,

and excluding 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:

Adjusted EBITDA increased by 6% in 2021, with improved

profitability in some of our core markets helping to fund

strategic investment in the US and certain other growth market

opportunities.

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.

For more information on our financial

performance, see pages 42 to 47.

As part of our new ‘Made for the future’

ESG framework the Board is also developing

additional ESG targets that it proposes to

disclose during the current financial year and

report on annually thereafter to ensure we are

delivering effective and positive outcomes for

our players, our people, and the planet. For

additional details about our ESG framework,

see pages 28 to 41.

Financial KPIs

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Adjusted basic earnings per share (EPS)

+0%

2021 27.3

2020 27.3

Definition:

Adjusted basic EPS represents earnings excluding exceptional

items, share benefit charges and share of post-tax loss of equity

accounted associate, divided by the weighted average number

of shares.

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:

Adjusted EPS of 27.3¢ was flat year over year, with the increase in

Adjusted EBITDA offset at a net profit level by additional interest

charges and non-cash currency exchange differences.

Average monthly players

No. thousands

+4%

2021 540

2020 518

Definition:

Average monthly players (AMPs) represent players who wagered

real money during a month and have deposited real money on

at least one occasion. The figure reflects the average of the

monthly figures for the relevant reporting period.

Why we measure it:

This measures changes in the size of the customer base, which

is a key driver of long-term growth, and is useful in assessing

performance against strategic objectives such as growing

market share across key markets and providing excellent

customer experiences.

Performance:

AMPs increased by 4% in 2021 to 540k, driven by our focus on

product leadership, marketing and customer excellence. This

reflects a great result given the very strong comparative period

together with the temporary withdrawal from the Netherlands.

Cash and short-term deposits

US$ million

+18%

2021 174.5

2020 148.2

Definition:

Cash and short team deposits represent cash and cash

equivalents excluding customer funds.

Why we measure it:

This measures the ability of the Group to convert its Adjusted

EBITDA into cash flow, and aids decision making in terms of

appropriate deployment of capital resources across investing in

growth and returns to shareholders via dividends.

Performance:

Cash and short term deposits at 31 December 2021 was

US$174.5 million, with the 18% increase over 31 December 2020

reflecting the strong cash generation from operating activities,

partially offset by higher levels of dividend payments in the year.

Technology availability

Percentage

99.84%

2021 99.84

2020 99.60

Definition:

Technology availability is the proportion of time during the year

when our technology platform and products were fully available

to our customers.

Why we measure it:

This measures the reliability, scalability and flexibility of our

proprietary technology platform, which is a key driver of our

ability to continuously innovate and provide best-in-class

products to our customers.

Performance:

Technology availability continued to be high with our platform

providing a secure and stable service to our customers across

all products for 99.84% of 2021.

Non-financial KPIs

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

A global growth

opporutunity

888 operates in the global online

betting and gaming industry, a

large and growing market, where

888 has been at the forefront of

the industry since 1997, having

been one of the first online

betting and gaming operators.

H2 Gambling Capital estimates that

the total addressable market for online

betting and gaming was US$100

billion in gross gaming revenue in 2021,

having grown at a CAGR of 17% from

2016-2021. 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 11% from 2021-2026.

In 2021 H2 estimates that circa 25% 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.

Lockdowns led to a step-change in the

size of the online betting and gaming

industry globally for three main reasons:

1) The need to transact digitally for

the first time, for example to order

groceries or speak to loved ones over

video conference;

2) An expansion of digital entertainment,

with more time and disposable income

available to spend on digital activities,

expanding the addressable audience;

and

3) An increase in activity from existing

online betting and gaming players,

particularly when land based gambling

was closed or heavily restricted.

Despite the acceleration in digital

adoption, there remains a long runway

of growth ahead, with each percentage

point of offline to online migration

contributing circa US$3 billion to online

growth.

888 is well positioned within the most

attractive end markets and has a clear

strategy to increase market share across

our focus markets.

8bn

10bn

14bn

17bn

18bn

20bn

22bn

25bn

27bn

30bn

33bn

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

2021 industry highlights

Online market size

$100bn

2016-2021 online total CAGR

17%

2021-2026 online forecast total CAGR

11%

MARKET REVIEW

Key

Total interactive gambling

As % of total global market

5% 5% 5%

7% 7% 7%

8% 8%

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Structural growth

drivers

- Internet and mobile internet

infrastructure – The roll-out

and increased penetration

of high-speed internet and

network infrastructure, together

with the proliferation of smart

phones and mobile internet

have significantly increased the

potential audience size.

- Growth in e-commerce –

Increasing confidence with

e-payments and transacting

digitally have continually

increased the addressable

audience.

- Growth in mobile technology

– The strong growth in

penetration of increasingly

sophisticated mobile devices

with increased capacity

to process data and ever-

improving screen quality

has had a significant impact

on the volume of mobile

commerce generally.

- Product development –

Operators have invested in

product development in order

to offer consumers a more

varied and superior betting and

gaming experience. Improved

product offerings, specifically

through smartphones, has

been a key growth driver in

the market.

- Social trends – Gaming and

betting have become culturally

more acceptable leisure

activities as a result of the

expansion into mobile betting

and gaming. There is also a

broader acceptance of digital

channels as a safe and secure

means to consume gaming

services.

- Government adoption of

regulation – In response

to the growth in the global

online gaming market, several

governments have over recent

years adopted online gaming

regulatory frameworks with the

aim of protecting customers,

promoting choice and raising

taxes. Such changes provide

incumbent operators with

access to customers and

opportunities for expansion.

37bn

41bn

46bn

52bn

59bn

66bn

82bn

100bn

2014 2015 2016 2017 2018 2019 2020 2021e

Online gambling as a % of total gambling

25%

1ppt of offline to online migration worth

$3bn

10%

11%

12%

13%

14%

22%

25%

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

MARKET REVIEW cont.

Growth markets

888’s growth markets represent

a small cohort of high-growth

markets that made up 21%

of revenue in 2021. These are

typically regulating or newly-

regulated markets that have

attractive long-term growth

potential, where we are investing

heavily to build 888 into a top

tier brand.

There are five markets where the Group

is currently investing for growth or

expects to start investing for growth

following launching on a locally regulated

basis, and these represent a combined

total addressable market (TAM) of

approximately US$9 billion in 2021, having

grown at a CAGR of 15% between 2016-

2021 and expected to grow at a CAGR of

14% between 2021-2026.

The US

The ongoing regulation of online

sports betting and gaming in the US

represents a significant long-term

strategic opportunity for 888. Since the

repeal of the PASPA in May 2018, the

market has grown rapidly and is forecast

to be worth US$15 billion in 2022, which

would make it the largest regulated online

market in the world on a gross gaming

revenue basis, albeit somewhat inflated

by a significant level of promotional

generosity in the market given the

nascent nature.

In June 2021 the Group announced a

long-term strategic brand partnership

with Authentic Brands Group (“ABG”) to

leverage the Sports Illustrated brand and

launch SI Sportsbook, in order to benefit

from significant brand awareness and

reduce the cost of customer acquisition

and upfront brand investment required to

build market share.

Core markets

888’s three core markets represented 59% of its 2021 revenue,

made up of the UK (40%), Italy (12%) and Spain (7%).

These three fully regulated markets represent a combined total addressable market

(TAM) of approximately US$18 billion in 2021, having grown at an estimated CAGR of

13% between 2016-2021 and expected to grow at an estimated CAGR of 7% between

2021-2026.

These markets share certain characteristics, such as comprehensive regulation, large

established land-based gambling markets, and competitive intensity, but each is driven

by differing local player preferences. Despite the markets being highly competitive, there

are rising barriers to entry given the significant and complex regulatory and compliance

requirements and well-established brands.

Total online market size for 2016

US$ million

Total online market size for 2021e

US$ million

Total online market size for 2026e

US$ million

Total UK: 12,333

–– Betting: 3,597

–– Gaming: 6,031

Total Italy: 4,459

–– Betting: 1,758

–– Gaming: 2,509

Total Spain: 1,584

–– Betting: 577

–– Gaming: 677

Total UK: 16,170

–– Betting: 4,337

–– Gaming: 7,794

Total Italy: 6,934

–– Betting: 2,705

–– Gaming: 3,314

Total Spain: 2,219

–– Betting: 788

–– Gaming: 724

Total UK: 7,689

–– Betting: 2,675

–– Gaming: 3,820

Total Italy: 1,604

–– Betting: 493

–– Gaming: 1,074

Total Spain: 895

–– Betting: 443

–– Gaming: 373

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

The first state to launch under the new

brand was Colorado in September 2021.

The Group plans to launch in three to four

new states per annum over the next two to

three years. The Group has market access

and or licences for B2C operations in

five states (Colorado, Indiana, Iowa, New

Jersey, and Virginia), with further market

access deals in advanced discussions.

The Group also operates on a B2B basis

in the US through its partnership with

Caesars to operate the World Series of

Poker brand, where it is live in four states

(Delaware, New Jersey, Nevada, and

Pennsylvania) and is ready to launch

in Michigan during 2022 subject to

regulatory approval.

US market value for 2022

$$15bn

Optimisation markets

888’s highly scalable global platform

and globally recognised brand enables

it to generate high incremental return

on investment from a large and diverse

group of over 100 other markets, where

there are no local licensing regimes in

place, and the Group operates through

its multi-jurisdictional licences from Malta

and Gibraltar.

Regulatory update

888’s strategic focus is on

regulated markets, as these

represent the best opportunity

for sustainable growth. 888

supports the development of

local regulatory regimes across

its markets, as regulation drives

better outcomes for customers,

for the business, and for wider

stakeholders.

Locally regulated or taxed markets

represented 74% of revenue in 2021, up

from 73% in 2020. Looking forward a few

years, with the strategic focus on core

and growth markets, all of which are

regulated or in the process of regulating,

this percentage should increase

significantly. The potential William Hill

transaction would further accelerate this

trend towards locally regulated revenues.

There were several notable developments

affecting key markets of the Group

during 2021, with multiple markets either

launching under new local regulatory

regimes, or making positive moves

towards regulation. Some key changes

during the year included:

UK: The Group awaits 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.

The Group has taken several steps

during 2021 to increase the level of safer

gambling interventions, including lowering

thresholds for intervention and stepping

up affordability checks. The Group also

introduced new game design features

across its full range of slots content in

line with a new industry code of conduct

aimed at reducing the risks associated

with gambling.

Spain: Substantial restrictions on

marketing came into force in July 2021.

Canada: The province of Ontario further

developed its regulatory framework and

is set to launch its regulated market

during Q2 2022. The Group has received

a licence here ahead of the launch and

looks forward to working with the regulator

to ensure we can offer and market our

products under a local licence soon.

Germany: The German market underwent

significant transformation during 2020

and 2021 as the new interstate treaty

on gambling came into force, requiring

operators to adjust their operations to

adhere to the new framework prior to it

being fully launched in July 2021. During

2021 the Group went live under its newly

issued local sports betting licence, and

has applied for a gaming (slots + poker)

licence, albeit the Group understands no

gaming licences have yet been issued to

any operator. The significant restrictions

on the gaming operations have led to a

significant shift in market dynamics, with

many international operators pulling out

of the market. The Group sees exciting

growth potential in the newly regulated

German market and continues to invest

behind the new 888sport.de brand,

including recently signing a brand

partnership with the Bundesliga football

club RB Leipzig.

Netherlands: The Group had been

operating in the Netherlands in

compliance with the Netherlands Gaming

Authority (KSA) ‘cooling off’ criteria.

However, following policy changes

published by the KSA, 888 ceased

provision of services in the country from

October as the newly regulated market

went live. Despite the unexpected change

in the KSA position, the Netherlands still

represents an attractive medium-term

opportunity for the Group, and it intends

to apply for a local licence and hopes to

be operational again in the country in the

second half of 2022.

Regulated revenue mix

Percentage

2021 69%

2021* 74%

2020 67%

2019 64%

2018 58%

2017 59%

* Regulated and taxed.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

888 is focused on creating value for and

addressing the concerns and aspirations of a

range of stakeholders including its customers,

employees, shareholders, regulators, and the

local communities in which we operate, as well as

supporting a greener planet. 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.

ESG framework – Made for the Future

Recent Annual Reports have outlined the progress 888 has made

to support safer gambling, increase employee diversity, invest

in communities, and reduce the Group’s environmental impact.

However, there is more to be done across all these areas to

better manage the Group’s governance and its impact on the

environment and society (generally referred to as ESG) in order to

support the Group’s long-term, sustainable growth plans.

Therefore, the Group has developed a new ESG framework,

Made for the Future. This will help to provide a clear blueprint of

commitments against which stakeholders can assess the Group’s

progress in meeting their expectations.

To support the delivery and continuous development of Made

for the Future, the Group has strengthened its governance

arrangements by establishing an ESG Committee. The Committee

has overall responsibility for developing 888’s ongoing ESG

commitments and targets, as well as ensuring that these remain

relevant and effective. As a sign of the Group’s commitment, this

Committee is led by the Chair of the Board, Lord Mendelsohn.

Made for the Future is built around three key pillars: Made to Play

Safely (focused on safer gambling), Made Together (focused

on 888’s people and communities), and Made Greener (focused

on managing 888’s impact on the environment), all of which are

underpinned by a robust Governance structure. These pillars

were determined though a careful consideration of the legal

and stakeholder expectations of 888, the risks and opportunities

facing the company, the materiality of key issues, and the Group’s

position compared to peers.

Going forward, the Group will continue to develop this framework,

following global best practices, and disclose yearly and multi-year

targets and objectives. These will allow stakeholders to measure

and assess our progress. The Group is currently going through

an extensive consultation process and will develop and disclose

additional ESG targets during the current financial year, reporting

annually against these commitments and goals thereafter.

ESG & SUSTAINABILITY

Made to play safely

Preventing harm through

safer gambling

A world where player tools and restrictions for

gambling are a normal part of play

Initial measurement 1:

Observer interactions

1.3m1.3m

Customer interactions prompted by our Observer player

tracking software over the course of 2021, a 77% increase

compared to 2020 (0.7m), reflecting our more proactive

policies to identify potential harm and intervene as early as

possible.

Initial measurement 2:

Access to Control Centre

39%39%

The percentage of active customers with access to Control

Centre in Q4 2021 (2020: N/A).

Initial measurement 3:

Active customers with deposit limits

41%41%

The percentage of active customers with deposit limits in place

in Q4 2021, up from 31% in Q4 2020.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Made together

An inclusive workplace where people

can grow and develop

Made greener

Protecting our environment, including

Net zero carbon emmissions

An authentic, diverse and interpersonal

workplace culture, that offers great development

opportunities

Initial measurement 1:

Female promotions target

50%50%

Female promotions as a percentage of total annual promotions,

with a target of 50% compared to the 2021 baseline of 39%.

Initial measurement 2:

Learning and development participation target

10ppts10ppts

Proportion of all colleagues who have participated in a

voluntary learning and development programme, with a target

to increase by at least 10ppts from the 2021 baseline of 50%.

Initial measurement 3:

Volunteering programme participation target

50%50%

Proportion of all colleagues who have participated in

volunteering programmes, with a target to increase to

at least 50% from the 2021 baseline of 14%.

Net zero carbon emissions for our own operations

by 2030 and our entire value chain by 2035

Initial measurement 1:

Net zero carbon emmissions target

20302030

Reducing direct emissions from 3,089 tonnes in 2021

Initial measurement 2:

2021 Indirect carbon emissions

26,000 tonnes26,000 tonnes

Reducing indirect carbon emissions from 26,000 tonnes

in 2021, achieving net zero by 2035.

Initial measurement 3:

Accreditation of targets by the independent Science Based

Target Initiative.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

While enjoyable for many people, 888

acknowledges the social risks that

gambling presents and is committed to

ongoing improvement in making gambling

safer. The Made to Play Safely pillar of

the Group’s ESG Framework is focused on

ensuring 888’s customers are empowered

to make safe and responsible decisions

about their betting and gaming, while

supporting any customers who may be

in danger of harm. Our philosophy is

built around normalising the use of safer

gambling tools by customers as part of

their gambling experience.

MADE TO

PLAY

SAFELY

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

As outlined in the Chair’s Statement of this

Annual Report, in March 2022 (post the

year-end), 888 received a sanction from

the GB regulator (UKGC), reflecting historic

failings of former safer gambling and anti-

money laundering policies, procedures

and controls in the UK. The Group promptly

took appropriate action to address the

failings and is continually looking at ways

to improve in this critical area.

The Group knows that its work in this area

must be ongoing and remains committed

to continue developing a safer gambling

environment, and investing in meeting

its safer gambling objectives, which are

focused on the following four areas:

1. Safer by design.

We recognise that 888 must use

technology as a force for good, giving

customers transparency about their

gambling activity, using artificial

intelligence (AI) to detect and block

harmful play, and ensuring safer

gambling remains a core component

of all product design.

888 has developed two critical

technologies that are central to its

approach to safer gambling:

• Observer is 888’s player monitoring

system that uses sophisticated

algorithms to flag unusual or potentially

concerning customer activity. This

enables our highly trained safer

gambling team to make the most

appropriate interactions with customers

to help them make informed decisions

about their gambling.

• The Control Centre is a customer-

focused interface designed to enable

customers to monitor their own

gambling activity through intuitively

presented, real-time data.

Further information on both of these

technologies is available on 888’s

corporate website.

Key progress in 2021:

888 continually refines the Observer,

and during 2021 introduced several

new algorithms to better identify

behaviours that signal potential risks,

as well as lowering certain thresholds

for triggering alerts.

In addition, the Control Centre was

rolled out across additional products

and markets during 2021, and by Q4

2021 was available to 39% of the

Group’s global customers.

2. Safer by choice.

We know that we must continue to

empower customers to make safe

and responsible decisions about their

gambling. We have learned that engaging

customers directly on their playing

patterns is a very powerful way to support,

inform and encourage the use of safer

gambling tools.

888 provides all customers with a range

of Safer Gambling Tools which include:

deposit limits; “take-a-break” restrictions;

self-exclusion limits; game time reminders;

and automatic stops on maximum

losses. In addition, throughout their

gaming, customers receive personalised

interactions and messages checking in

with them on their play. We might, for

example, ask a snap “How do you feel

about your gambling right now?” question,

or provide visuals of current status for

example, showing them any increasing

trend in deposits.

Key progress in 2021:

During 2021 888 saw a 23% increase in

customers’ use of safer gambling tools,

largely reflecting the success and positive

customer reaction to the Control Centre.

In addition, we saw that those customers

who use the Control Centre were 20%

more likely to amend their Personal

Deposit Limit; 102% more likely to use

the “take-a-break” tool; and 17% more

likely to set a self-exclusion limit. These

are all statistically significant increases

compared to a control group and

illustrate why we are so determined to

extend the use of this powerful technology

over the coming years.

The impact of controls

Increase in use of safer gambling tools

+23%+23%

Likelihood to amend Personal Deposit

Limits

+20%+20%

Likelihood of utilising “Take a Break”

+102%+102%

Likelihood of using self-exclusion

+17%+17%

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

3. Safer through controls.

We recognise the power of using data to

provide oversight and support for those

struggling to stay in control of their play,

including limiting players’ activity or

stopping them playing.

Know Your Customer (KYC) is a process

to understand and verify a player’s

identity when they first register with 888.

At registration, 888 collects personal

identification data on customers

(this data is also used in Anti Money

Laundering (AML) controls). This data

includes age, occupation, address, and

screening against certain sanctions lists’

data. KYC helps 888 to achieve its goals of

precenting underage gambling as well as

protecting customers by identifying those

potentially risk of harm and interacting

with them at the earliest point.

AML is enforced through a combination

of robust operational procedures, ongoing

employee assessment and training,

development in proprietary technology,

and partnerships with leading third-

party providers.

Observer plays an important role in

understanding our customers and,

where necessary, where 888 must

impose controls, limits and blocks their

activity. Observer measures changes in

individual customers’ gaming behaviour,

such as unexpected increases in time

or money spent on the site. If Observer

indicates any cause for concern, 888’s

highly trained teams manually review

the patterns of play and discuss with

the player where appropriate. Through

an extended process of research and

interaction, 888 can apply an escalating

series of controls to that player’s account,

ranging from restricting the number of

promotional messages they see, through

to enhanced affordability checks and

restricting their stakes to a ‘hard stop’

indicating no further play with 888.

MADE TO PLAY SAFELY cont.

888 has made particular efforts targeted

at 18-24 year old customers with extra

protections embedded. Observer is

configured to be more sensitive for this

population, ensuring closer monitoring

and increased number of interactions by

the safer gambling team. The Customer

Safety and Due Diligence department

are trained to consider a customer’s age

across all of its customer risk profiling,

ensuring enhanced protection and care

for younger customers.

Underage activity on 888’s sites and

apps is strictly prohibited and 888 takes

the matter of underage gaming extremely

seriously. 888’s offering is not designed

to attract minors, and we take seriously

the risk that gambling advertising might

appeal to minors. 888 makes every

effort to prevent minors from accessing

its products and uses sophisticated

verification systems as well as a third-

party verification supplier to identify

and track minors if they log into the

Group’s software. We train our team to

be highly sensitive to the possibility of

underage activity and make sure we

suspend any account suspected to

be an underage account.

Key highlights in 2021:

During 2021 the Group gradually

increased controls for all players on

888’s platforms, for example by steadily

reducing the maximum stakes for slots

across different categories of players.

In addition, and partly reflecting the

more stringent thresholds introduced

to Observer as described above, 888

delivered a 77% increase in the number

of customer interventions prompted

by Observer during 2021, to 1.3 million

customer interactions (2020: 0.7 million).

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

888 continued to work with the Betting

and Gaming Council (BGC), looking at

the issue of affordability and helping to

find a workable regulatory response. In

addition, 888 formed part of the BGC’s

Safer Gambling Committee, Ethical

Game Design working group, Advertising

and Marketing Committee and Single

Customer View working group. We also

participated in BGC’s Safer Gambling

Week, and took part in workshops on

affordability and collaborative research

on patterns of play. 888 is represented on

the BGC’s AdTech forum, which includes

a particular focus on protecting younger

gamblers through responsible and

controlled advertising and promotion, and

is committed to the BGC Industry Code

for Socially Responsible Advertising.

4. Safer together.

We recognise 888’s responsibility to play

an active role in driving the broader

gambling industry towards safer play. 888

continues to recognise the importance of

working closely and collaboratively with

industry stakeholders including regulators,

local advisors and trade associations

to drive ongoing improvements in safer

gambling and customer protection.

One very important aspect of regulation

for 888 is to ensure we are fully compliant

with AML regulations in all our markets.

We have a full AML governance model,

including a Money Laundering Reporting

Officer (MLRO), checks as part of our KYC

approach, policies and staff training.

Key highlights in 2021:

During 2021 we continued to work closely

with several charities and organisations

aimed at protecting customers and

supporting safer gambling, including:

• GamCare, the leading independent

charity supporting people affected

by problem gambling. Through our

relationship with GamCare, 888

delivered powerful effective Problem

Gambler Awareness training to our

employees to help them understand the

signs and impact of problem gambling.

888 is committed to working towards

achieving GamCare’s Certificate of

Excellence in 2022.

• Leon House Health and Wellbeing,

a residential rehab clinic treating a

wide range of psychological disorders

and addictions. The organisation

delivers support online using their

AnonyMind platform, which 888

supports via donations.

• The Young Gamers and Gamblers

Education Trust (YGAM), an award-

winning charity with a social purpose

to inform, educate and safeguard

young people from gaming and

gambling related harms, which

888 supports via donations.

“We have a particular

focus on protecting

younger gamblers,

embedded in our

enhanced controls for

this group, but also in

our active relationship

with charity YGAM, a

charity dedicated

to educating and

safeguarding young

people against gaming

and gambling harms.”

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

The Group knows that the talent,

commitment, and skill of its global

teams make its business what it is.

The Made Together pillar of the Group’s

ESG framework is focused on nurturing

an inclusive workplace that offers great

opportunities for people to grow and

develop. This pillar also incorporates the

Group’s programmes to enhance diversity,

provide opportunity, and invest in our

communities.

MADE

TOGETHER

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

To underpin 888’s continuous development

in creating the best possible workplace

culture, the Group has initially identified

the following focus areas:

1. Promoting a fair, supportive,

and positive working environment

that enables 888’s people – and

its business – to flourish.

888 has a strong and distinctive

employment culture, driven by the core

principles of caring, respect, commitment

and working together. The Group’s global

workplaces tend to be informal, open,

and collaborative, underpinned by high

professional standards.

As a global business, it is important for

all 888’s people to be aligned with the

Group’s shared goals. 888 aims to share

consistent internal messaging across

all its office locations and provides

regular updates and communications to

employees. The Group undertakes regular

roundtable events, employee forums and

staff surveys for senior management

to engage and receive feedback from

employees.

888 sets clear standards of behaviour

for its personnel and is guided by the

United Nations Global Compact’s

principles on human rights and labour

standards, as well as the International

Labour Organisation’s core conventions

and UNICEF’s Children’s Rights and

Business Principles. 888 has adopted

an Anti-Modern Slavery Policy, in the

context of which the Group monitors its

operations and supply chain with a view

to preventing modern slavery practices.

The Group’s Anti-Modern Slavery and

Human Trafficking Statement can be

found in full on 888’s corporate website

along with a Human Rights & Labour

Standards Statement. During 2021, no red

flag events were reported under the Anti-

Modern Slavery Policy. In addition, in 2021

there were no material labour disputes,

litigation, or health and safety related

fines or sanctions imposed on 888.

Discrimination, bullying or harassment of

any kind are not tolerated in any aspect

of the business, including in recruitment,

pay, promotions, training and dismissals.

To enforce these rules, 888 clearly

communicates a confidential grievance

procedure and whistleblowing policy to

all employees, guaranteeing that the

complainant will not face recrimination

and committing to thoroughly investigate

any concerns.

Less than 1% of the Group’s global

workforce are in temporary positions,

and 3.5% are hired through outsourcing,

meaning most of our personnel

are permanent employees with full

employment benefits. For temporary

and outsourced staff, we remain

fully committed to the principles of

welfare, employment rights and non-

discrimination. Temporary employees

receive most of the benefits and

protections offered to permanent

employees, and we assist all good

performers in finding other positions

within the Company before the end

of their employment term.

Key progress in 2021:

Over 5% of the Group’s employees were

promoted or made an internal transfer

to a different role during 2021. A key tool

for supporting employee performance

and development is our approach

to remuneration and recognition. We

undertake regular benchmarking across

the business to ensure we are both

fair and competitive. There are annual

performance evaluations to ensure

employee development is aligned

with business goals and we empower

managers to recognise individual

successes throughout the year.

Commentary:

In 2021, employee turnover increased to

37% (2020: 18%). This reflects changes

in the broader employment market, in

light of the global ‘Great Resignation’

trend – a global response to the COVID-19

pandemic, which saw employees across

the world re-evaluate their priorities.

There were several elements that

impacted the turnover trend:

1. Workforce management strategy –

In May 2021, 888 closed its Antigua

office, establishing its customer

relations operations in Ceuta and

Romania (including expansion of the

Safer Gambling team), supported by

extensive hiring, training and knowledge

buildup efforts.

2. Global ‘war for talent’ – There is a

worldwide talent shortage across most

domains and regions, with accelerated

competition over talent and aggressive

attraction and retention plans.

3. Accelerated growth plans – To support

the establishment of customer relations

operations and reflecting the increased

investment in the US, 2021 saw a record

729 new hires (2020: 576), with an

average of 75 days’ time-to-hire. This

was stable compared to 2020.

The Board recognises that a low voluntary

staff turnover (attrition rate) provides

considerable value by keeping expertise

within the business and maximising the

returns on our investment in training and

nurturing talent. Historically, our attrition

rate has been comparable to wider

industry levels at all sites.

888 takes a local approach to driving

talent acquisition, and during 2021

we invested significantly in ensuring

local leadership teams in our offices

had the tools they needed to attract

skilled employees in areas vital for

business value.

Relevant key employee indicators:

Indicator Metric Unit

Data

2020

Data

2021

Training & Development

inputs

Amount spent per FTE on

training and development

USD 650 574

Employee Turnover Rate Total employee turnover

rate

% 18 37

Voluntary employee turnover

rate

% 12 23

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

MADE TOGETHER cont.

2. Developing an inclusive culture

rooted in respect, care and

commitment as well as seeking

diversity, supporting social

mobility, and welcoming and

developing talent wherever

we find it.

888 employs around 1,900 colleagues.

The Group’s Human Resources dashboard

allows 888 to closely monitor employee

data at all locations, including key metrics

such as employee age, gender, ethnicity,

and length of service. Our people are

38% female and 62% male, with wide age

diversity and an average age of 35. As

would be expected from an international

business, ethnic diversity varies between

the Group’s office locations.

As an international business we know

that diversity of background, experience

and perspective is an integral part of

what makes our business successful

and allows us to serve 888’s customers

around the world. In line with the Group’s

Equal Opportunity & Diversity Statement,

which can be found on the 888 corporate

website, 888 is committed to providing an

accessible and inclusive environment for

individuals across its workforce. 888 does

not tolerate discrimination, harassment

or victimisation of any kind. As an

equal opportunity employer, we base all

decisions about employment, training,

and promotion on individual merit and

operational needs.

The current distribution of female

employees across functions and

the percentage of women in Group

management positions drives our

current gender pay gap, which we are

considering and looking to address going

forward. Along with consistent monitoring

of these asymmetries within the

business, we are proactively addressing

this situation through our recruitment

processes and support for diverse talent

within the business. We are confident

that all male and female colleagues

are paid equally for comparable roles,

and that all our colleagues have the

same opportunities for progression and

development.

Key highlights in 2021:

During 2021 888 launched the Group’s

inaugural She Leads programme,

encouraging 888’s women to influence,

inspire and lead. The programme

involves 31 women across 888’s locations

around the world, offering a network,

coaching, training and workshops in

storytelling, personal presence and

effective communication to other female

colleagues. The programme is aimed

at creating a powerful community of

female ambassadors across the business,

enabling individuals not only to progress

themselves, but also to inspire other

women to the same.

Through programmes such as SheLeads,

888 is aiming strengthen its position

as a company that empowers female

leadership. The Group’s primary targets

are to increase the number of women

in senior management roles (female

representation is at 38% overall but falls

to 25% at Vice President and 19% at

Director levels), and in the research and

development (R&D) teams.

Commentary:

During 2021 there was a slight decline

in the proportion of female employees

across our business, from 40% to 38%,

reflecting changes in our location

strategy (the closure of Antigua that

historically had a high number of female

representatives); the expansion of core

functions that are typically more male

dominated (e.g. product and technology);

and the disruption from COVID-19. These

factors also explain the slight decrease

in the share of women in management

positions. Our Made Together pillar is

designed to address these declines,

with a strong focus on developing

female talent.

Relevant key employee indicators:

Indicator Metric Unit

Data

2020

Data

2021

Workforce Breakdown:

Gender

Share of women in total

workforce

% 40 38

Share of women in the Board

of Directors

% 12.5 33

Share of women in

management positions

% 34 32

Share of women in junior

management positions (i.e.

first level of management)

% 40 35

Share of women in top

management positions (i.e.

maximum 2 levels from CEO)

% 29 25

Share of women in

management positions

in revenue-generating

functions (e.g. sales) as % of

all such managers

% 35 30

Share of women in

management positions in

STEM-related positions (as

% of total STEM positions)

% 21 21

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

3. Engaging and supporting our

local communities.

888 embraces its responsibility to its

communities and local environments

through proactive engagement with the

issues that matter most to our business

and the people around us. Engagement

with its communities is an important part

of 888’s culture and for its employees to

be able to engage in rich community life

both in and out of work is an important

factor of their wellbeing.

888 recognises that as a global employer

with eight offices, its local communities

can be its greatest advocates, particularly

when it comes to recruiting the best talent

available. As such, 888 aims to maintain

a positive relationship with its local

communities across the world and have a

positive impact wherever it operates.

Across its global offices, 888’s teams

support several charitable causes and

organisations that matter to them and

their communities, with a particularly

well-established community involvement

programme around its office in Herzliya,

Israel. Employees volunteer with

community groups and 888 offers support

via direct donations too. Work is underway

to extend and develop more formalised

programmes like this to 888’s other

global locations, beginning with Romania.

888’s focus for the upcoming year will be

organisations supporting elderly people,

women, environmental matters and the

LGBT community.

Commentary:

During 2021 volunteering hours were

curtailed by further COVID related

disruption, which also drove the decline

compared to 2020. The Group is focused

on reinvigorating its local community

involvement throughout 2022 as and when

the local COVID related policies allow.

Relevant key employee indicators:

Indicator Metric Unit

Data

2020

Data

2021

Philanthropic

Contributions

Cash contributions USD 586,000 618,000

Time: employee volunteering

during paid working hours

USD 72,900 51,700

In-kind giving: product or

services donations, projects/

partnerships or similar

USD 22,600 25,000

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

888 acknowledges that the urgency

and importance of the climate crisis

requires everyone to play their part.

The Group is committed to a future

in which its customers can enjoy

888’s products without harming the

environment. The Made Greener pillar

of the Group’s ESG framework is

focused on 888’s role in protecting the

environment, including achieving net

zero direct carbon emissions by 2030.

MADE

GREENER

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

As part of this pillar, the Group is

prioritising the following key initial

focus areas:

1. Measuring and reducing the

Group’s direct environmental

impact, targeting carbon

emissions in particular.

At the end of 2021, the Group published

its Zero Carbon Report, which included

calculations of 888’s direct and indirect

carbon emissions as well as setting a

path to net zero carbon emissions. The

full report is available on the Group’s

corporate website.

In 2021, the Group estimates that 888’s

activities generated approximately

29,000 tonnes of direct and indirect

greenhouse gas emissions. Of this, 888

was directly responsible for 3,089 tonnes.

To tackle direct emissions 888 intends

to switch to renewable energy in all its

premises, either by requesting this from a

commercial provider or by partnerships to

install new renewable capacity.

2. Working with the Group’s

largest suppliers and partners to

encourage them to reduce their

own carbon emissions.

Of the Group’s total carbon emissions

in 2021, 26,000 tonnes were emitted

by others on 888’s behalf (for example,

by those who supply the Group with the

goods and services we need to run the

company, manage data centres where

our games are hosted, or transport 888’s

people when they travel on business).

The largest contributions arise from our

suppliers (estimated at 21,000 tonnes),

and within this total the most significant

categories are 888’s marketing partners

(both online and offline). Other smaller

identifiable elements are web hosting

partners and data centres.

In the Net Zero Carbon report, the Group

outlines its commitment to work with

suppliers on carbon reduction plans that

target 80% emissions reductions in the

period to 2030. The Group’s intention is

to have carbon reduction plans in place

for suppliers that represent 60% of its

external third party spend by 2025. Using

this targeted approach, 888 intends to

reduce emissions from its supply chain to

zero by 2035.

3. Supporting employees to travel

in low-carbon ways.

Employees travelling between home and

work locations are responsible for around

190 tonnes of carbon emissions each

year. How employees choose to travel to

work is a matter for them, but 888 can

play its part as a partner and influencer

in their decisions. To reduce this figure to

zero by 2030 888 will provide support to

encourage employees to switch to electric

vehicles; provide facilities at the Group’s

premises for low-carbon travel such as

bicycles, showers and electric vehicle

charging points; encourage the use of car

sharing and public transport; and think

about carbon when siting all new facilities,

favouring city centre sites with good

public transport links.

4. Investing in high quality carbon

removal offset for any emissions

that cannot be reduced in other

ways.

The Group acknowledges that in order to

reduce its emissions to zero by 2035, it

will need to invest in high quality carbon

removal offsets as the technologies and

alternatives do not yet exist for each

economic activity – for example zero

carbon aeroplanes are still a way off.

Therefore, to reach net zero, the Group

intends to purchase high quality carbon

offsets that actively remove carbon from

the atmosphere. The Group will develop

a formal approach to offsetting by 2023,

with further details included in the 2021

Zero Carbon Report.

Highlights

Net zero target across our supply chain

20352035

Scope 1 and 2 emissions (tonnes)

3,0893,089

Scope 3 emissions (tonnes)

26,00026,000

“We have this year set

ambitious targets to

reduce our carbon

emissions as far as

possible.”

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

MADE GREENER cont.

Additional disclosures on Climate

Change

In line with the Task Force for Climate-

related Financial Disclosures, this section

presents supplementary information

specifically relating to our approach to

climate-related risks and opportunities.

Carbon and climate governance

The Group’s approach to climate change

and the resulting impacts form an

integrated part of the company’s ESG

and Sustainability Agenda. They are

managed therefore as part of the ESG

Governance process with oversight is via

the ESG Committee of the Board, and

executive responsibility via the Group’s

ESG Forum. The connections between ESG

and Risk governance are managed:

• By having the chair of the Audit and

Risk Committee as a member of the

ESG Committee

• By the executive leadership of the COO,

a direct report to the CEO

The principal governance mechanisms

this year have been the development

of 888’s Zero Carbon Report, itself one

aspect of the Made for the Future ESG

framework. Both of these instruments have

been prepared under direct Board and

Executive oversight.

Risk management

Climate-related risks are typically lower

in the short-term, so are not explicitly

assessed as part of the company risk

management strategy. However, we

recognise that climate-related risks have

the potential to amplify reputational risks

and business disruption risks, and over the

coming year will be subject to additional

analysis and investigation on that basis.

888 has retained professional advisers to

support in understanding and responding

to climate-related risks. These advisors

work alongside the ESG Committee to

provide expertise, challenge and analysis.

The company has identified potential

risks as outlined on pages 50 to 59 but

there is more to do to understand and

quantity these. At this stage, 888 has

not yet completed a formal scenario

analysis to explore resilience against

different climate scenarios. This exercise

will be completed in the year ahead and

the results will feed into 888’s formal risk

assessment processes.

Table A – Group GHG emissions

Scope Emission subcategory

GHG emissions

(metric ton CO

eq)

Contribution to scope

(%)

1 Direct GHG emissions 1 –

2 Indirect GHG emissions

associated with energy

3,088 10.6

3 Other indirect GHG

emissions

26,000 89.4

Total 29,089

Corporate metric

Ratio performance indicators

(per Scope 1 and Scope 2)

Emissions per headcount 1.60 tCO

e/employee

Emission per square metres

area of offices

0.15 tCO

e/m

office area

Emissions per turnover 3.09 tCO

e/US$m

Table B – Ratio performance indicators (per Scope 1 and Scope 2)

Corporate metric/year

2021 2020

Ratio

Parameter

amount Ratio

Parameter

amount

Emissions per headcount

tCO

e/employee

1.60 1,900 emp 2.00 1,673 emp

Emission per square metres

area of offices

tCO

e/m

office area

0.15 21,150 sqm 0.17 20,160 sqm

Emission per turnover

tCO

e/m US$m

3.09 $1,000m 3.94 $850m

Table C – UK office energy and GHG emissions (Scope 1 and Scope 2)

Scope 1 and 2 2021

Energy Consumption (kWh) 66,540

GHG emissions (tC0

e) 14

Emissions per square metres area of offices tCO

e/m

office area 0.09

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Risks and strategy

Climate change presents two types

of risks to 888’s strategy and financial

planning:

• transition risks, emerging from national

and global policy responses to the

climate crisis (such as regulatory

changes, taxes and levies, etc) and

the transition to a sustainable climate

model (such as changes in energy

availability and mix, disruptions to the

company’s own or partner business

models, and reduced availability

of unsustainable components or

materials).

• adaptation risks, emerging from the

changes already underway in the

climate and those which are likely to

come, such as extreme weather events,

changing water supplies, changing

availability of crops, impacts on

biodiversity, impacts on customers etc.

The Company has not at this stage

identified any material opportunities

resulting from climate transition or

adaptation.

Metrics and targets

888’s commitments on climate change

are set out fully in the Zero Carbon

Report corporate.888.com/wp-content/

uploads/2021/12/888-carbon-report-2021.

pdf. The report quantifies 888’s carbon

footprint under Scopes 1, 2 and 3 of the

Greenhouse Gas protocol, including

comprehensive data from the value

chain. It also sets out the Group’s largest

contributions to climate change and the

mitigation strategy for the period to 2035.

These targets have been approved by the

Board and accountability for delivery has

been defined.

TCFD compliance

The following table presents the assessment of the Group’s compliance with the TCFD

disclosure requirements

TCFD element TCFD disclosure Reference

Governance a. Describe the Board’s oversight

of climate-related risks and

opportunities.

Roles of the ESG and Audit

and Risk Committees are

described above and on

pages 28 to 41.

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.

In process

b. Describe the impact of climate-

related risks and opportunities

on the organisation’s businesses,

strategy, and financial planning.

Not yet completed; will be

undertaken next year

c. Describe the resilience of the

organisation’s strategy, taking into

consideration different climate-

related scenarios, including a 2°C

or lower scenario.

Not yet completed; will be

undertaken next year

Risk

Management

a. Describe the organisation’s

processes for identifying and

assessing climate-related risks.

Described above and on

pages pages 50 to 59.

b. Describe the organisation’s

processes for managing climate-

related risks.

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.

Described in full on the

Zero Carbon Report and

summarised on pages 38

to 41.

b. Disclose Scope 1, Scope 2, and, if

appropriate, Scope 3 greenhouse

gas (GHG) emissions, and the

related risks.

c. Describe the targets used by the

organisation to manage climate-

related risks and opportunities

and performance against targets.

The Board is confident that 888’s new Made for the Future ESG framework provides

an important foundation and direction for progress over the coming years, including

the ongoing development of new targets, objectives and focus areas as we evolve.

The Board looks forward to providing regular updates to its stakeholders on the

Group’s ESG performance.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

FINANCIAL

REVIEW

Reconciliation of operating profit to Adjusted EBIT,

Adjusted profit before tax and Adjusted net profit

2021

US$ million

2020

US$ million Change

Operating profit 87.0 32.8 165.1%

Foreign exchange losses 9.3 –

Exceptional items

24.0 78.2

Share benefit charges 8.4 11.0

Adjusted EBIT

128.7 122.0 5.5%

Finance income and expenses (15.0) (6.0)

Adjusted profit before tax 113.7 116.0 (2.0%)

Income tax (12.4) (15.4)

Adjusted net profit 101.3 100.6 0.7%

Financial summary

2021

US$ million

2020

US$ million Change

Revenue B2C:

Gaming 814.5 692.2 17.7%

Betting 127.4 122.1 4,3%

Total B2C 941.9 814.3 15.7%

B2B 38.2 35.4 7.7%

Revenue 980.1 849.7 15.4%

Gaming taxes and duties (184.0) (151.8)

Other costs of sales

(149.1) (135.1)

Gross profit

647.0 562.8 15.0%

Marketing expenses (306.5) (237.1)

Operating expenses

(175.5) (170.1)

Adjusted EBITDA

165.0 155.6 6.0%

Share based benefit charges (8.4) (11.0)

Foreign exchange losses (9.3) –

Exceptional items

(24.0) (78.2)

Depreciation and amortisation (36.3) (33.6)

Operating profit 87.0 32.8 165.1%

Finance income and expenses (5.7) (6.0)

Share of equity accounted associates loss – (0.1)

Profit before tax 81.3 26.7 204.9%

Adjusted profit before tax 113.7 116.0 (2.0%)

Taxation (12.4) (15.4)

Profit before tax 68.9 11.3 510.5%

Adjusted basic earnings per share 27.3¢ 27.3¢ 0%

Basic earnings per share 18.6¢ 3.1¢ 500.0%

Alternative Performance Measures (“APMs”) used in this Business & Financial Review do not have standardised

meanings and therefore may not be comparable to similar measures presented by other companies.

1 The foreign exchange losses of US$9.3 million (2020:

nil) were excluded from Other cost of sales to allow

for further understanding of the underlying financial

performance of the Group and aid comparability

with the prior period.

2 Excluding depreciation and amortisation of US$36.3

million (2020: US$33.6 million) and share benefit

charges of US$8.4 million (2020: US$11.0 million).

3 Exceptional charges of US$24.0 million (2020:

exceptional charges of US$78.2 million), as detailed

in the Results overview below.

4 Adjusted EBITDA and Adjusted EBIT are the main

measures the analyst community uses to evaluate

the Company and compare it to its peers. The

Group presents adjusted measures (including

Adjusted profit before tax) which differ from statutory

measures due to the exclusion of exceptional

items and the application of adjustments. It does

so because the Group considers that it allows for

further understanding of the underlying financial

performance of the Group.

“2021 was another record-

breaking year for 888, with

Revenue of US$980 million

and Adjusted EBITDA of

US$165 million reflecting a

strong year of operational

and financial performance

to complement the

significant strategic

progress we made during

the year.”

YARIV DAFNA

Chief Financial Officer

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

As the year progressed the comparative

periods got stronger and stronger,

resulting in overall year-over-year growth

for H1 of 41%, but a decline of 4% in H2.

Q4 2021 in particular suffered from the

exit from the Netherlands and weaker

than expected sports margins, resulting

in an overall decline in B2C revenue for

Q4 of 14% against a very strong

comparative period.

The strong performance of record revenue

in 2021 and double-digit growth was

also in spite of the US$70-100 million

regulatory related revenue headwinds

that we outlined in the prior year. These

headwinds related not only to German

regulatory changes, but principally to

safer gambling measures we have taken,

particularly in the UK, to reduce the

potential for customers to experience

harm. The full impact of these items was

weighted more towards H2, resulting in H2

revenue being sequentially 17% lower than

H1, but in line with our expectations. These

measures position the business well for

any potential changes that may come as

a result of the impending UK government

review of gambling legislation, and you

can read more about all the work we are

doing to make 888 a safe place to play

here on pages 30 to 33.

Gaming revenue increased by 17.7% over

the prior year, driven by our globally

renowned casino product, which

generated 90% of our gaming revenue.

During the year we launched over 870

new games, bringing our current content

library to over almost 3,000 games,

including launching over 200 new live

casino tables, such that we now believe

we have one of the largest live casino

offerings globally, with more than 400

tables delivered by four different providers.

Our in-house content studio Section8

delivered 17 new games during the year,

including some smash hit titles like Mad

Max Fury Road and Millionaire Genie

Megaways. Typically, five or six of the

top 20 performing slots at any given

time are produced by Section8, and

this differentiation is driving improved

customer loyalty, with exclusive games

they can only find at 888. We have

exciting plans for our Section8 studio and

over the next few years plan to double

our investment in it to deliver even more

exciting new exclusive content.

Alongside industry-leading content, we

continue to focus on product leadership

and improving the customer experience,

including continued investment in AI-

driven personalisation and launching

several new product features. Read more

about our some of our new products here

on pages 14 to 17.

Poker delivered a solid performance,

and we continue to invest in our latest

poker platform, with a focus on mobile-

first development and a recreational

customer experience. Poker continues

to be an important customer acquisition

channel, and while poker product

revenues normalised in 2021, following

an exceptional boost across the poker

industry in 2020, revenues were in line

with management expectations. The

increased focus on customer experience,

mobile products, and easier cross-sell

journeys to casino and sport meant that

overall revenues from the 888poker brand

significantly outperformed poker product

revenues.

During the year we announced the

potential sale of our Bingo business

for up to US$50 million to a division of

Broadway Gaming, in order to increase

focus on our core growth strategy

including US expansion. The Board

considered that the Bingo business did

not meet the criteria to be classified

as held for sale at 31 December 2021

because the business was not available

for immediate sale, as described in further

detail in note 11. For 2022 and until the

sale completes we will continue to include

bingo revenues within our Gaming revenue

number. Bingo revenue declined by 7%

year-over-year, principally reflecting a

strong comparative period with bingo

benefitting in the prior year from retail

venue closures, particularly within the UK.

2021 was another record-breaking

year for 888, with Revenue of US$980

million and Adjusted EBITDA of US$165

million reflecting a strong year of

operational and financial performance

to complement the significant strategic

progress we made during the year.

At the time of our interim results we made

a change to how we report our product

splits within B2C to better reflect how

the business is managed and in line with

how peer companies present results. B2C

revenues had historically been split out

into the component products of Casino,

Poker, Sport and Bingo. The Group now

combines Casino, Poker and Bingo

revenues under one heading of Gaming,

with no change to Sport, which is now

referred to as Betting.

B2C Review

B2C continues to reflect the vast majority

of the business, at over 96% of revenue.

B2C revenue grew by 15.7% in 2021,

reflecting a strong performance across

our core markets, and rapid expansion in

some of our growth markets.

The growth was driven by our focus on

our areas of competitive advantage,

product, brand, and customer excellence,

that helped deliver a 4% increase in

average monthly players despite the prior

year seeing a significant spike in activity

linked to the initial stages of the shift

from retail to online during the COVID-19

pandemic, particularly within poker, and

our temporary exit from the Netherlands

in Q4 2021. Our improved product and

AI-driven personalisation is delivering

increased share of wallet among our

players, helping to drive market share

gains across key markets.

2021 was another year where quarterly

trends were heavily impacted by

the world pandemic and associated

government responses across our global

markets throughout the year. In Q1 2021,

we recorded our highest ever quarterly

revenue, with exceptionally strong growth

of 67% year-over-year reflecting the

impact of leisure restrictions across

several of our key markets, with customers

seeking alternative digital entertainment.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

FINANCIAL REVIEW cont.

Betting revenue increased by 4%

during the year, and we completed the

successful migration of over 70% of our

betting volume to our in-house sportsbook

during the year. Across the year as a

whole win margins were flat, but the

impact of sporting results on year-over-

year growth trends varied significantly

by quarter. H1 betting revenue growth of

82% was primarily driven by the sports

cancellations in the prior year, but was

also helped by operator favourable results

contributing to a 1.3 percentage point

increase in win margin year-over-year.

Conversely the H2 betting revenue decline

of 40% year-over-year was driven by

stronger comparatives as sporting

calendars were condensed into Q3 2020

to catch up, together with more customer

friendly results. Q4 in particular was a

period for the customers, with win margin

of 4.9% being approximately 2 percentage

points lower than expected, and 3.2

percentage points lower than the prior

year, contributing to the Q4 betting revenue

decline of 56%. Q4 was also negatively

impacted by the exit from the Netherlands,

which had been a strong performing sports

betting market for the Group.

B2B review

B2B revenues increased by 8% year-over-

year, with growth in both our bingo B2B

business and our US B2B business.

Our B2B bingo business was included in the

potential sale of the bingo division noted

above, and similarly to B2C, until the sale

the B2B bingo revenue will be included in

our reported financials.

We continue to power the only shared

liquidity poker network in the US in

partnership with Caesars under the

World Series of Poker (WSOP) brand. During

the year WSOP launched in Pennsylvania

and we expect to launch in Michigan

in 2022 subject to regulatory approval.

Pennsylvania represented the first state in

the US to receive our latest Poker8 platform,

and are hopeful that we can expand the

shared liquidity network to these additional

states in the coming years.

Regulated markets

Revenue from regulated markets

continued to represent the majority of

Group revenue in 2021, with revenue from

regulated and taxed markets

increasing

by 17% and accounting for 74% of

revenue (2020: 73%). 888’s strategic

focus remains on achieving growth in its

regulated core and growth markets where

the Group can leverage its sustainable

competitive advantages to drive long-

term sustainable growth.

The above table shows the Group’s

revenue by geographical market

The Group delivered revenue growth in

the UK of 17% to US$388.9 million (2020:

US$333.5 million), despite lapping a

strong comparative following the 63%

growth reported in the prior year. The

growth during 2021 reflected continued

solid market share progress in this highly

competitive market. This continues to

be driven by investing in our areas of

competitive advantage, namely product

and content quality, brand and marketing,

and customer excellence.

During the year the Group continued to

focus on safer gambling, with a range

of additional measures implemented in

order to reduce the risk of potential harm.

These measures, which were largely rolled

out from Q2 onwards, included increased

affordability checking, particularly among

customers aged 18-25, lowering certain

product stake limits, and enhancing the

Observer AI system with lower thresholds

for intervention. The combination of

these measures, together with the lifting

of leisure restrictions from May onwards

meant that UK revenues in H2 2021 were

lower than in H1 2021, as expected, and in

line with the wider industry trend.

Italy

Italy delivered continued strong revenue

growth of 37% to US$118.3 million (2020:

US$86.5 million), and now comprises over

12% of the Group’s total revenue. This

strong performance was seen across both

betting and gaming, and is driven by

the strength of 888’s established brands

in the Italian market, which continue to

benefit from structural tailwinds of digital

migration from land-based gambling

despite the advertising ban.

888 held its market share broadly stable

overall for the year, which is an excellent

result given the online-only nature of our

offering, versus the leading competitors

who all have a land-based presence that

provided an omni-channel tailwind in 2021

as retail was reopened during the year.

EMEA (excluding the UK and Italy)

Revenue from EMEA excluding the UK and

Italy increased by 4% to US$333.5 million

(2020: US$320.9 million). Regulated

markets such as Romania, Ireland and

Portugal saw particularly strong growth

trends, partially offset by the exit from

the Netherlands from October, and a

decrease in revenue from Germany which

was impacted by the transition to the new

regulatory regime. The Group believes

Germany represents an attractive growth

opportunity going forward under the new

regulatory regime and continues to invest

to grow its brand presence there. We plan

to apply for a licence in the Netherlands

and are hopeful we can relaunch there on

a regulated basis during H2 2022.

Revenue by geographic market

2021

US$ million

2020

US$ million

Change from

previous year

% of reported

Revenue

(2021)

UK 388.9 333.5 17% 40%

Italy 118.3 86.5 37% 12%

EMEA (excluding

the UK and Italy) 333.5 320.9 4% 34%

Americas 125.6 93.7 34% 13%

Rest of the World 13.8 15.1 (9%) 1%

Total Revenue 980.1 849.7 15% 100%

5 Regulated and taxed markets refer to jurisdictions

where the Group operates under a local licence or

where the Group is liable for gaming duties, GST or

similar taxes.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

In Spain, revenue was flat at US$67.5

million (2020: US$67.5 million), reflecting

both the strong comparative period with

strong growth in 2020 aided by COVID-19

related restrictions, together with a

challenging competitive environment

following the implementation of significant

marketing restrictions from July. In the

first 9 months of the year, the overall

Spanish market size increased by 3%,

and management estimates that its

market share was broadly stable in the

year overall.

Americas

Revenue from Americas increased by

34% to US$125.6 million (2020: US$93.7

million), primarily driven by strong growth

in Canada, where the Group has received

for a local licence in Ontario, with the

regulated market set to launch in Q2

2022. We believe the Canada market

represents an attractive long-term growth

opportunity for the Group, where 888

has an established brand presence and

can exploit its sources of competitive

advantage.

US revenue increased by 6% to US$22.0

million (2020: US$20.8 million), reflecting

a good performance for the 888casino

brand in New Jersey, offset by investment

in promotions to drive customer activity

associated with the launch of SI

Sportsbook in Colorado in September,

and increased investment in the fourth

quarter. We have a clear roadmap of

state prioritisation and were pleased to be

awarded a licence in Virginia during the

year, with plans to launch there in 2022.

The Group currently expected to launch

in 3-4 additional states during 2022, with

an increased investment in the US B2C

business to take advantage of the long-

term strategic growth opportunity.

During the year the Group launched in

Pennsylvania on a B2B basis with our

partner the World Series of Poker and we

are ready to launch WSOP in Michigan

during 2022 subject to regulatory

approval.

Results overview

Gaming taxes and duties

Gaming duties levied in regulated and

taxed markets increased by 21.2%

to US$184.0 million (2020: US$151.8

million) and the proportion of Gaming

taxes and duties to revenue increased

to 18.8% (2020: 17.9%). This is a result

of the Group’s strong revenue growth in

regulated and taxed markets and the

implementation of a new tax regime in

Germany commencing July 2021.

Other cost of sales

, which mainly

comprise 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,

increased by 10.3% to US$149.1 million

(2020: US$135.1 million). The proportion

of cost of sales to revenue decreased to

15.2% (2020: 15.9%). This is primarily due

to the successful migration of over 70% of

our sportsbook business to our in-house

platform, with associated third-party

royalty savings, together with additional

scale benefits. Other cost of sales

increased by 17.3% to US$158.4 million

(2020: US$135.1 million).

Gross profit

Gross profit increased by 15.0% to

US$647.0 million (2020: US$562.8

million), broadly in line with the increase

in revenue, with a slight decrease in

the gross margin from 66.2% to 66.0%.

The scale benefits and optimisation of

third-party costs (including the use of our

in-house sportsbook) were offset by the

increase in gaming duties and taxes.

Marketing expenses

One of the key drivers of 888’s business is

effective and data-driven marketing spend.

Overall marketing expenses increased by

29.3% to US$306.5 million (2020: US$237.1

million) as we invested to drive growth

across our key markets. The marketing ratio

increased to 31.3% (2020: 27.9%) largely

reflecting upfront investment in nascent

markets, such as our US B2C business under

the SI Sportsbook brand, and our regulated

German sports betting offering.

Increased marketing investment in new

or regulating markets is in line with the

Group’s strategy to build world-class

brands and use its data-driven marketing

expertise to drive increased customer

activity and deliver market share gains

in key markets.

The Group’s focus on product and content

leadership, world-class brands, and

customer excellence should enable it to

reduce the marketing ratio over time,

both through reduced costs of acquiring

customers, and increased customer

loyalty driving greater share of wallet.

Contribution

Contribution, which represents Gross

profit less Marketing expenses, increased

by 4.6% to US$340.5 million (2020:

US$325.7 million), while Contribution

margin decreased to 34.7% (2020:

38.3%), due to the increased marketing

investment during the year to support

future growth plans.

Operating expenses

(which mainly

comprise employment costs, legal and

professional fees, development costs, IT

services and infrastructure maintenance)

slightly increased to US$175.5 million

(2020: US$170.1 million). The increase

during the year primarily reflects the

increased professional services linked to

the growing complexity of the Group’s

regulatory footprint and additional

investment in safer gambling and

customer protection technology.

Adjusted EBITDA

Adjusted EBITDA increased 6.0% to

US$165.0 million (2020: US$155.6 million),

representing an Adjusted EBITDA margin

of 16.8% (2020: 18.3%). The absolute

increase in Adjusted EBITDA was driven

by the increase in contribution as

explained above, with the reduction

in margin principally reflecting the

increased investment in the US B2C

business and the associated launch

of the SI Sportsbook brand. Excluding the

US business in both years, the Adjusted

EBITDA margin was flat year-over-year.

6 Excluding foreign exchange differences of US$9.3

million.

7 Excluding depreciation and amortisation of US$36.3

million (2020: US$33.6 million) and share benefit

charges of US$8.4 million (2020: US$11.0 million).

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

FINANCIAL REVIEW cont.

Finance income and expenses

Finance expenses of US$15.1 million

(2020: US$6.1 million) less finance income

of US$0.1 million (2020: US$0.1 million)

resulted in a net expense of US$15.0

million (2020: US$6.0 million). Finance

expense mainly comprised US$9.3 million

non-cash currency exchange differences

which are presented in the consolidated

income statement as part of the other

cost of sales, US$1.3 million non-cash

interest expenses resulting from operating

leases, and US$4.4 million interest charge

related mainly to the settlement with the

Israeli tax authorities.

888 continually monitors foreign currency

risk and takes steps, where practical, to

ensure that net exposure is kept to an

acceptable level.

Profit before tax

Profit before tax increased to US$81.3

million (2020: US$26.7 million) mainly as

a result of lower exceptional expenses

in 2021. Adjusted profit before tax was

US$113.7 million (2020: US$116.0 million),

impacted by non-cash currency exchange

differences and interest charges.

Taxation

Taxation for the period was US$12.4

million (2020: US$15.4 million), mainly

as a result of lower taxable profits and

the settlement signed with the Israeli

tax authorities which was concluded in

December 2021, as described in further

detail in note 8.

Net Profit and adjusted net profit

Net profit was US$68.9 million (2020:

US$11.3 million). Adjusted net profit

increased slightly to US$101.3 million

(2020: US$100.6 million).

Earnings per share

Basic earnings per share increased

to 18.6¢ (2020: 3.1¢) a result of higher

Net profit in 2021 compared to the

previous year, as outlined above.

Adjusted basic earnings per share

was 27.3¢ (2020: 27.3¢).

Further information on the reconciliation of

Adjusted basic earnings per share is given

in note 9 to 2021 financial statements.

Dividend

The Board of Directors is not

recommending a final dividend to be

paid in respect of the year ended 31

December 2021, in light of the potential

capital requirements expected as part of

the pending William Hill transaction. 888’s

dividend policy remains unchanged and

dividends are kept under review by the

Board to ensure an appropriate allocation

of capital to create value for shareholders.

As a result, the total dividend for the year

is 4.5¢ per share (2020: 18.0¢ per share).

Balance sheet

Total assets as at 31 December 2021

amounted to US$540.0 million (2020:

US$486.7 million).

Current assets as at 31 December 2021

amounted to US$324.1 million (2020:

US$274.6 million) and current liabilities

were US$340.0 million (2020: US$298.9

million).

888’s Cash and cash equivalents as at

31 December 2021 amounted to US$255.6

million (2020: US$222.2

million), an

increase of US$33.4 million. The balance

of cash owed to customers as at 31

December 2021 was US$81.1 million

(2020: US$74.0 million), leaving an

adjusted net cash position of US$174.5

million (2020: US$148.2 million).

Cash flow

Net cash generated from operating

activities was US$133.2 million (2020:

US$205.0

million). Net cash generated

from operating activities before working

capital movement was US$138.5 million

(2020: US$145.7 million). The change in

working capital was mainly attributed to

a US$16.0 million increase in prepayments

and guarantees made during 2021, while

in the previous year working capital was

affected by an increase in trade and

other payables, related to the sharp

increase in trading activity during Q4

2020.

Net cash used in investing activities was

US$30.5 million (2020: US$30.9 million),

mainly comprising acquisition of property,

plant and equipment of US$5.6 million

(2020: US$10.6 million) and internally

generated intangible assets of US$22.6

million (2020: US$17.9 million).

Net cash used in financing activities was

US$70.3 million (2020: US$58.9 million),

related mainly to a dividend payment of

US$61.3 million (2020: US$33.2 million)

and payment of lease liabilities of US$7.2

million (2020:US$6.4 million). During

2020, the Group repaid US$18 million that

was outstanding under the RCF in full and

during the year the Group cancelled the

RCF facility.

Exceptional items

2021

US$ million

2020

US$ million

Restructuring costs

3.1 –

Exceptional legal and professional costs

15.1 –

Retroactive duties and associated charges

5.9 –

Impairment charges

– 79.9

Other provisions

(0.1) (0.1)

Gain from the sale of equity accounted associate

– (1.6)

Total exceptional items 24.0 78.2

8 Restructuring costs, related to employees redundancies costs and disposal of property, plant and equipment as

part of the Group’s decision to close its Antigua office.

9 Exceptional legal and professional costs associated with the proposed acquisition of the international (non-US)

business of William Hill.

10 Retroactive charge associated with reassessment of potential gaming duties relating to activity in prior years.

11 During 2020, the Group carried out an impairment test for the Goodwill and intangible assets of the Bingo

business which resulted in impairment charges.

12 While assessing the provision in respect of exceptional matters, management concluded that it could be

adjusted. The net decrease in this provision was accounted for as exceptional income, in line with the treatment

when the provision was created.

13 Capital gain related to the sale of investment in Come2Play Limited.

14 As defined in note 9 of the financial statements.

15 Including US$32.2 million on-demand deposits

previously presented as trade receivables and has

been reclassified to cash and cash equivalents.

16 Net cash generated from operating activities in 2020

previously presented as US$179.2 million was restated

to reflect the reclassification of on-demand deposits

from trade receivables to cash and cash equivalents.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Going concern

The Group closely monitors and carefully

manages its liquidity risk. In its going

concern assessment, the Directors have

considered two cases. The first assumes

the Group on a standalone basis as the

William Hill International transaction

is yet to be completed and pending

shareholders’ approval (the “standalone”

case) and a second in which the WHI

acquisition completes in Q2 2022 (the

“acquisition” case), as described in further

detail in note 2.

Following consideration of the standalone

and acquisition cases and the respective

sensitivity analysis the Directors have

a reasonable expectation that the

Company has adequate resources to

continue in operational existence for the

next 21 months, until 31 December 2023.

Therefore, the Directors continue to adopt

the going concern basis of accounting

in preparing the consolidated financial

statements.

YARIV DAFNA

Chief Financial Officer

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

STAKEHOLDER ENGAGEMENT

WHY WE ENGAGE KEY AREAS OF INTEREST HOW WE ENGAGE

CUSTOMERS

888’s business would cease to exist without customers

who trust us to deliver a safe, enjoyable and fair gaming

environment.

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

gaming experience. This means playing great

products, enjoying quality customer service

and having confidence that they are playing in

a safe and secure environment.

Our customer services teams 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 conduct market research to learn how our brand is perceived. 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 ESG Report on

pages 28 to 41.

EMPLOYEES

The talent, commitment and skill of our employees around the

world underpins 888’s ability to deliver its strategic imperatives.

We are proud of our employees and want to provide them with

a workplace where they can flourish.

Proving a great workplace is a core social responsibility for

us, including our programmes to increase diversity, provide

opportunity and invest in our communities.

Our employees want to know they are part of a

business that cares about their wellbeing and

supports their professional development.

We have an inclusive informal culture, rooted in

respect, care and commitment.

Our workplaces are informal, open and collaborative underpinned by high

professional standards.

We have multiple routes for generating feedback from our employees

including effective line-management structures, surveys and open employee

forums. We are committed to proactive, timely and transparent internal

communications with our team on an ongoing basis.

We have set up programmes through the year to encourage personal

development and wellbeing including our SheLeads programme (more

information can be found in ESG Report on pages 28 to 41.

REGULATORS

Regulators across various territories give 888 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.

We engage in regular and transparent dialogue with regulators across our

global markets.

We participate in industry events and forums to better understand the

requirements of the regulators wherever we operate.

SHAREHOLDERS

As the owners of the business we want to ensure we understand

the views of our shareholders.

The relationship between the Board and its shareholders is

based on trust, transparency and the timely disclosure of

information.

The Board of 888 recognises the importance of demonstrating

a high level of openness and engagement with our shareholders

to maintain confidence in 888’s ability to create value.

Shareholders 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 have an open dialogue and regularly meet with our major shareholders to

get their views and feedback.

We have expanded our Investor Relations team to engage with institutional

investors.

Market views and shareholder analysis is included as a standing Board item.

We ensure an ongoing conversation with shareholders through our financial

reporting as well as events such as our Annual General Meeting and Capital

Markets Events.

COMMUNITIES

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 888’s global offices

look for the Company to demonstrate its

commitment to the local area by being a

responsible corporate citizen.

We have a well-established community involvement programme. We

encourage employees to be involved in community events and participate in

local charities. 888’s employees dedicate time sponsored by the company to

these causes.

Our Made for the Future framework is expected to put an increased focus on

measuring colleagues’ involvement in volunteering programmes and actively

supporting this on pages 28 to 41.

PARTNERS

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.

We pride ourselves on being a partner of choice. Relevant team members

within 888 have regular dialogue with our partners to ensure that our visions

and, most importantly, values are aligned.

The Company views stakeholder

engagement as an important

part of its ongoing governance

arrangements. Whilst as a

Gibraltar company the UK

Companies Act 2006 does not

apply, however we continue

to comply with Section 172.

In accordance with the UK

Corporate Governance Code

2018, the Company’s key

stakeholders are considered

in Board discussions and

decision-making.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

WHY WE ENGAGE KEY AREAS OF INTEREST HOW WE ENGAGE

CUSTOMERS

888’s business would cease to exist without customers

who trust us to deliver a safe, enjoyable and fair gaming

environment.

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

gaming experience. This means playing great

products, enjoying quality customer service

and having confidence that they are playing in

a safe and secure environment.

Our customer services teams 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 conduct market research to learn how our brand is perceived. 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 ESG Report on

pages 28 to 41.

EMPLOYEES

The talent, commitment and skill of our employees around the

world underpins 888’s ability to deliver its strategic imperatives.

We are proud of our employees and want to provide them with

a workplace where they can flourish.

Proving a great workplace is a core social responsibility for

us, including our programmes to increase diversity, provide

opportunity and invest in our communities.

Our employees want to know they are part of a

business that cares about their wellbeing and

supports their professional development.

We have an inclusive informal culture, rooted in

respect, care and commitment.

Our workplaces are informal, open and collaborative underpinned by high

professional standards.

We have multiple routes for generating feedback from our employees

including effective line-management structures, surveys and open employee

forums. We are committed to proactive, timely and transparent internal

communications with our team on an ongoing basis.

We have set up programmes through the year to encourage personal

development and wellbeing including our SheLeads programme (more

information can be found in ESG Report on pages 28 to 41.

REGULATORS

Regulators across various territories give 888 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.

We engage in regular and transparent dialogue with regulators across our

global markets.

We participate in industry events and forums to better understand the

requirements of the regulators wherever we operate.

SHAREHOLDERS

As the owners of the business we want to ensure we understand

the views of our shareholders.

The relationship between the Board and its shareholders is

based on trust, transparency and the timely disclosure of

information.

The Board of 888 recognises the importance of demonstrating

a high level of openness and engagement with our shareholders

to maintain confidence in 888’s ability to create value.

Shareholders 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 have an open dialogue and regularly meet with our major shareholders to

get their views and feedback.

We have expanded our Investor Relations team to engage with institutional

investors.

Market views and shareholder analysis is included as a standing Board item.

We ensure an ongoing conversation with shareholders through our financial

reporting as well as events such as our Annual General Meeting and Capital

Markets Events.

COMMUNITIES

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 888’s global offices

look for the Company to demonstrate its

commitment to the local area by being a

responsible corporate citizen.

We have a well-established community involvement programme. We

encourage employees to be involved in community events and participate in

local charities. 888’s employees dedicate time sponsored by the company to

these causes.

Our Made for the Future framework is expected to put an increased focus on

measuring colleagues’ involvement in volunteering programmes and actively

supporting this on pages 28 to 41.

PARTNERS

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.

We pride ourselves on being a partner of choice. Relevant team members

within 888 have regular dialogue with our partners to ensure that our visions

and, most importantly, values are aligned.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

RISK MANAGEMENT STRATEGY

The Board acknowledges that there is no return

without risk. However, key risks must be identified,

evaluated and where possible quantified in order

for the Board to rationally determine how to

manage risk to generate optimal return.

The Board acts in accordance with a Risk Management

Policy, which aims to explicitly identify and evaluate key risks

underlying the Group’s core business strategy and standardise

the approach to risk prioritisation and management across 888’s

operations. This in turn means that effective controls can be put

in place to ensure 888 is able to manage its operations effectively

now and into the future. 888’s risk register is updated periodically

and regular discussions are held at Board and management level

of the role of risk in 888’s business.

888’s culture emphasises the need for employees to take

responsibility for managing the risks in their own areas and to

transparently and timely report “bad news” and “near miss”

incidents, with a willingness to constantly learn and improve.

Where failures are identified, 888’s management is committed

to appropriately investigating what happened and why, in order

to learn from mistakes. The Board has also adopted a Reporting

and Escalation Procedure to ensure timely reporting of internal

reportable events including bugs, technical failures, information

security malfunctions and marketing and other operational

incidents which may affect customers.

The Board considers that 888 complies with the requirements of

the Financial Reporting Council’s Guidance on Risk Management,

Internal Control and Related Financial and Business Reporting

dated September 2014, and specifically confirms that:

• it is responsible for 888’s risk management systems and for

reviewing their effectiveness;

• there is an on-going process for identifying, evaluating and

managing the principal risks faced by 888;

• the systems have been in place during 2021 and up to the

date of approval of the Annual Report and accounts; and

• they are regularly reviewed by the Board (please see

page 70 for further details of the review conducted in 2021).

As part of its regular risk assessment procedures, the Board

takes account of the significance of environmental, social

and governance matters to the business of the Company,

and has identified and assessed the significant risks of that

nature to the Company’s short and long-term value, as well

as the opportunities to enhance value that may arise from

an appropriate response. The Board confirms it has received

adequate information to make this assessment and that these

matters are considered in the training of Directors. The Board

has specifically verified environmental, social and governance

disclosures – part of which, where mentioned herein, are verified

by external advisory firms and internal audits – with Group senior

management in order to ensure their accuracy.

Risk appetite

Addressing risk is a high priority for the Board and effective

risk management is an integral part of the way we conduct

our business on a daily basis. The Board factors into the risk

assessment impact, likelihood and appetite considerations.

Risk is managed across the Group in the context of overall risk

appetite and during 2021 the Board considered risk appetite

to ensure adequate resources are allocated to identified risks.

The Board reviewed and approved the following risk appetite

statement:

Category Tolerance Parameters

Strategic Medium During development and

implementation of new

propositions and assessing new

opportunities including potential

transactions, we are prepared to

accept medium risks that support

our pursuit of growth.

Operational Low to

medium

We will take a cautious approach

to risk within our operations, but

consider that certain risks will

be taken in order to achieve our

strategic objectives and maintain

our competitive position.

Finance Low We consider that robust financial

controls are necessary to

manage our business effectively.

All of our operating processes

are based around policies and

procedures that minimise the risk

of a loss of financial control.

Compliance Extremely

low to zero

We have an extremely low to

zero tolerance when complying

with laws and regulations that

relate to bribery, corruption

and anti-money laundering.

We have controls in place

that are designed to mitigate

these risks, and detailed and

tested procedures in place

for dealing with these types

of scenarios when they arise.

We are particularly sensitive

to compliance risks in our key

regulated markets including

the UK.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

REGULATORY RISK

The risk

The regulatory framework of online gaming is dynamic

and complex. Change in the regulatory regime in a

specific jurisdiction can, depending on the nature of the

change and its impact on the Group’s offering, have a

material adverse effect on business volume and financial

performance in that jurisdiction. Over time the number

of jurisdictions that have regulated online gaming has

increased, and is expected to increase further. 888

places focus on growing in regulated markets, and

in 2021 69% of its revenue was derived from locally

regulated markets. The Group seeks to obtain licences in

all markets the Group identifies as sufficiently attractive

from a strategic perspective. However, in some cases,

lack of clarity in the regulations, or conflicting legislative

and regulatory developments, mean that 888 may risk

failing to obtain an appropriate licence, having existing

licences adversely affected, or being subject to other

regulatory sanctions, including internet service provider

blocking, payments blocking, blacklisting and fines.

Furthermore, legal and other action may be taken by

incumbent gaming providers in jurisdictions which are

seeking to regulate online gaming, in an attempt to

frustrate the grant of online gaming licences. Newly

enacted or modified licensing regimes may impose

operational conditions on the Group that are onerous

or commercially unviable. Finally, changes to either the

regulatory framework or enforcement policy relating to

online gaming in certain markets may effectively force

the Group out of certain markets where it currently

operates or compel it to change its business practices or

technology in a way that would materially impact results.

Relevance to strategy

Compliance with regulatory requirements and the

maintenance of regulatory relationships in multiple

jurisdictions is key to maintaining 888’s online gaming

licences which are critical to the operation and growth

of its online gaming business. With the majority of

revenue generated from jurisdictions where the Group

is locally licensed, the importance of such licenses and

their centrality to the business constantly increase. A

growing number of jurisdictions worldwide now either

locally licence or otherwise regulate online gambling,

and therefore 888 may be exposed to an increasing

number and stringency of licensing requirements or

conversely to attempts to block access to 888’s offering

to players in certain jurisdictions or to penalise 888 for

its offering. A robust understanding of the legal and

regulatory position in key locations worldwide is crucial

to mitigating this risk.

How the risk is managed

888 manages its regulatory risk by routinely consulting

with legal advisers in various jurisdictions where its

services are marketed or which generate significant

revenue for the Group. Furthermore, 888 obtains frequent

and routine updates regarding changes in the law in

jurisdictions of interest that may be applicable to its

operations, working with local counsel to assess the

impact of any changes on its operations. 888 constantly

adapts and moderates its services to comply with

legal and regulatory requirements. 888 is in contact

with regulators, either directly, or through local counsel,

ensuring that we are continuously kept up to date with

regulatory updates, expectations, and changes to

technical standards and other applicable regulations.

888 has continued to review possible organizational

changes in order to strengthen regulatory compliance

oversight, as well as to improve co-operation between

the different departments and streamline processes

of settling any conflicts between them, ensuring that

888’s regulatory requirements and duty to uphold the

licensing objectives always take priority over commercial

interests. Finally, 888 blocks players from certain “blocked

jurisdictions” using multiple technological methods

as appropriate, and in addition is able to moderate

budgeted spend and focus in markets where uncertainty

is high, along with adjusting its marketing strategy to

online channels thus allowing faster cost adjustment

when needed. 888 also believes its investment in product

developments, such as better communication tools,

improved player experience and games adjustments,

serves to mitigate this risk.

What happened in 2021

In part as a response to the ongoing COVID-19

pandemic, various jurisdictions adopted a more

stringent approach to player protection, primarily

to avoid emergence of problem gambling patterns

amongst those sheltering at home, and to curtail

excessive spending on gambling during a period of

economic downturn. In various jurisdictions, this took

the form of advertising restrictions, or the imposition

of stricter player protection and responsible gambling

measures, either temporarily or on a permanent basis.

The Gambling Commission of Great Britain (“UKGC”)

continued to take a robust approach towards

compliance, adopting further guidance and regulations,

increasing the level of oversight over licensees and

escalating enforcement work to take strong action

against operators for failing to meet regulatory

requirements and standards. The primary areas of focus

for the UKGC were responsible gambling and prevention

of underage gambling, consumer protection, and

anti-money laundering. The UKGC adopted additional

requirements, e.g. the implementation in October 2021 of

a range of game design changes such as minimum spin

speeds, removal of auto play, and the need to clearly

display session length, wins and losses.

Increase

Decrease

Stable

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

RISK MANAGEMENT STRATEGY cont.

REGULATORY RISK

What happened in 2021 (continued)

In December 2020, the UK Government launched a

review of the Gambling Act 2005, with the aim to ensure

it is “fit for the digital age”. The review is still pending and

will cover the regulator’s powers as well as regulation of

marketing and restrictions to online offerings. A white

paper covering the Act’s review is expected in 2022,

which should set out the areas of focus for potential

changes. The areas that have received significant

media coverage typically centre around marketing

and sponsorship restrictions, mandatory affordability

thresholds, and stakes limits for online slots. While the

Group has assessed the likely impact from a range

of potential scenarios it is still unclear what measures

will be included in the review. In November 2021, the

UKGC opened a consultation on changes and updates

to its Licensing, Compliance and Enforcement Policy,

aimed at bringing certain gambling products which

the UKGC consider to contain financial elements under

the regulation of the Financial Conduct Authority. The

Group continued to work closely with the UKGC on

compliance matters, and also to update its policies

and procedures and to strengthen internal reporting

lines to ensure compliance within the business, investing

significant resources in regulatory compliance measures.

On 1 March 2022, the UKGC published a statement on

its website related to its investigation following its 2020

compliance assessment of the Group, which outlined

certain shortcomings in respect of former safer gambling

and anti-money laundering policies, procedures and

controls of the Group and pursuant to which 888 was

fined £9.4m. 888 took immediate and appropriate

actions to improve the relevant internal policies,

procedures and controls to ensure it is fully compliant

with its licensing obligations, and the UKGC has

recognised that 888 took corrective steps to address

the identified failings. 888 continues to test and monitor

how we conduct our business and ensure we remain

aligned to the expectations of our stakeholders,

including our regulators.

In Germany, the regulatory landscape is undergoing the

most drastic change in a decade with the introduction

of federal sports betting licences (which 888 was

awarded in June 2021), as well as online casino licenses

(covering poker and slots) which 888 has applied for.

Until such time as the online casino licences would be

awarded, a temporary toleration regime was adopted

for online casino gambling, with which 888 is compliant.

Compliance with the conditions of the new licensing

and toleration regimes required various modifications

and alignments of the Group’s German offering, which

has impacted the profitability of its operations in that

jurisdiction. 888 has been successful in having certain

prohibition orders previously issued against it withdrawn,

and having certain others suspended, as it continues to

litigate against outstanding prohibition orders in various

German states. The emergence of a licensing regime for

sports betting and online casino may, in the foreseeable

future, render these prohibition orders obsolete.

In the Netherlands, the online gambling market was

launched on a locally regulated basis in October 2021,

and the Group temporarily exited the market from this

date. Prior to this, the Group had been operating in

compliance with a set of “prioritisation criteria” that were

set out by the regulator and continually amended from

2019-2021. However, the latest update to the criteria

that was announced in September 2021, in what was

perceived as a surprise move, effectively removed the

option of operating in compliance with the criteria,

and instead required operators to be fully licensed. The

Netherlands still represents an attractive medium term

opportunity for the Group and it intends to re-enter

the market once it files for and obtains a local licence,

currently expected in the second half of 2022.

In Sweden, the Group has been operating under a local

licence since 2019. The Swedish regulator initially showed

itself to be strict and proactive in enforcing regulatory

standards, and on occasion informed the industry of

its position on compliance by penalising operators it

perceived as non-compliant. 888 continues to take

measures to ensure that its operations are in line with

local requirements.

2021 also saw a continued growing trend of civil litigation

claims which started in Austria in 2020 against foreign-

licensed operators, claiming refunds due to lack of local

licensing. This trend is backed by case law amongst

the higher Austrian courts. In addition, claim-financing

bodies started gathering claims against operators. The

Group is dealing with these civil claims with help from its

local advisors, and has taken proactive steps to mitigate

its risk from these claims. Whilst it continues to pursue

various legal avenues, the Group is keeping an eye on

the risk of operating in this market. A similar uptick in

civil claims also recently started in Germany, but to a

lesser extent.

In January 2021, the federal Court of Appeals for the

First Circuit denied an appeal by the US Department of

Justice seeking to uphold a 2019 memo on the scope

of the federal Wire Act. By denying the appeal, the

Court confirmed the previous opinion from 2011, which

concluded that the Act applies only to sports betting.

As the decision by the Court was left unchallenged by

the US Department of Justice, this ruling helps serve

888 and the online industry in providing a more legally

sound basis for internet gaming activity in the US. More

generally, the US continued to move towards increased

regulation of various forms of online gambling. The Group

was licensed in Colorado in December 2020 and in both

Michigan and Virginia in November 2021. The Group

continues to seek licensure in other US jurisdictions.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

INFORMATION TECHNOLOGY AND CYBER RISKS

The risk

IT systems may be impacted by unauthorised access,

cyber-attacks, DDoS (Distributed Denial of Service)

attacks, theft or misuse of data by internal or external

parties, or disrupted by increases in usage, human error,

natural hazards or disasters or other events. Cyber-

attack and data theft incidents may expose 888 to

“ransom” demands and costs of repairing physical and

reputational damage. Failure of IT systems, infrastructure

or telecommunications/third party infrastructure may

cause significant cost and disruption to the business and

harm revenues. Lengthy down-time of the site (including

in transitioning to activated disaster recovery servers)

could also cause 888 to breach regulatory obligations.

Relevance to strategy

As an online B2C and B2B business, the integrity of 888’s

IT infrastructure is crucial to the supply of its offerings

and compliance with its regulatory obligations and to

the maintenance of customer loyalty.

How the risk is managed

Cutting-edge technologies and procedures are

implemented throughout 888’s technology operations

and designed to protect its networks from malicious

attacks and other such risks. These measures include

traffic filtering, anti-DDoS devices and obtaining anti-

virus protection from leading vendors. Physical and

logical network segmentation is also used to isolate

and protect 888’s networks and restrict malicious

activities. The IT environment is audited by independent

auditors, such as the PCI DSS security audit. These

audits form part of 888’s approach to ensuring proper

IT procedures and a high level of security. In order to

ensure systems are protected properly and effectively,

external security scans and assessments are carried

out on a regular basis. 888 has a disaster recovery site

to ensure full recovery in the event of disaster. All critical

data is replicated to the disaster recovery site and

stored on a Glacier AWS service. 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. In order to minimise dependence

on telecommunication service providers, 888 invests

in network infrastructure redundancies whilst regularly

reviewing its service providers. As a part of its monitoring

system, 888 deploys set user experience tests which

measure performance from different locations around

the world. Network-related performance issues are

addressed by rerouting traffic using different routes

or providers. 888 operates a 24/7 Network Operations

Centre (“NOC”). The NOC’s role is to conduct real time

monitoring of production activities using state-of-the-

art systems. These systems are designed to identify

and provide alerts regarding problems related to

systems, key business indicators and issues surrounding

customer usability experience. The IT environment tracks

changes, incidents and service level agreement key

performance indicators in order to ensure that client

experience is consistent and well managed. As part

of these procedures, capacity planning takes place

and infrastructure is built accordingly. System-wide

availability and business-level availability is measured

and logged in the IT information systems.

What happened in 2021

COVID-19 was a catalyst for upgrading the Group’s work

from home capabilities across all sites, with security

and audit measures adjusted accordingly. The Group

migrated its front tier websites to a cloud based solution

and implemented leading cloud protection and audit

tools in 2021. The Group further improved its DDoS

architecture, including mitigation of device upgrades

and moved to an always-on architecture. Automation

of security processes has also been further progressed,

together with implementation of Advanced Persistent

Threat (APT) protections, and additional “write once

read many” (WORM) backup of the Group’s data centre

to mitigate ransomware risk.

Increase

Decrease

Stable

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DATA PROTECTION RISK

The risk

888 processes a large quantity of personal customer

data, including sensitive data such as name, address,

age, bank details and gaming/betting history. Such data

could be wrongfully accessed or used by employees,

customers, suppliers or third parties, or lost, disclosed

or improperly processed in breach of data protection

regulations. In particular, the European General Data

Protection Regulation (“GDPR”) entered into force in

May 2018, its equivalent in the UK (“UK GDPR”) and the

laws of the US states in which 888 operates, having a

significant effect on the Company’s privacy and data

protection practices, as it introduced various changes

to how personal information should be collected,

maintained, processed and secured. Non-compliance

with the GDPR or UK GDPR may result in fines of the

higher of €20 million or 4% of the Company’s annual

global turnover, and the Company will be particularly

exposed to enforcement action in light of the amount

of customer data it holds and processes. In addition,

various countries in the EU have introduced domestic

data protection laws incorporating the GDPR

requirements. Moreover, 888 makes use of various

tracking technologies (such as cookies, SDKs, JavaScript

and other forms of local storage), which are subject

to stricter standards of consent and transparency,

both under the GDPR and the e-Privacy Directive. The

Company could also be subject to private litigation and

loss of customer goodwill and confidence.

Relevance to strategy

The holding and processing of personal and sensitive

data in a lawful and robust manner is central to

888’s analytics-based business strategy. As an online

B2C and B2B business, the integrity of 888’s data

protection framework is crucial to the supply of its

offerings, compliance with its regulatory obligations and

maintenance of the impressive customer loyalty with

which 888 is entrusted. Data protection requirements

may also affect 888’s ability to expand its business to

new and emerging markets.

How the risk is managed

888 continuously maps the personal data life-cycle

within the organisation, including how personal data

of its customers and employees is collected, stored,

secured and shared with third parties. 888 has a

designated internal Data Protection Officer (“DPO”) and

it continuously revamps its policies and procedures on

relevant matters including exercising user rights and

data retention, data sharing with third parties, security

policies, as well as reviewing necessary product and

IT implementation. Such policies and procedures are

reviewed and updated on an ongoing basis to align

with the most up to date regulatory guidelines. 888 has

further put in place adequate contractual measures

with respect to sharing and transferring data with third

parties, reviewing its privacy notices and other customer

notifications and reviewing the current data security

framework on an ongoing basis.

What happened in 2021

888 reviewed and updated its internal data protection

policies and procedures, as well as notices provided

to the users (such as privacy notices, cookie notices

and consent forms), so as to ensure alignment with

regulatory developments and guidelines in existing

and new markets; reviewed a dedicated notice and

choice mechanism (to be implemented on 888’s online

properties) so as to meet the regulatory requirements

relating to the use of tracking technologies; amended its

data sharing agreements in accordance with regulatory

requirements; conducted Data Protection Impact

Assessments and Legitimate Interest Assessments

for new processing activities; ensured that data

subjects requests to exercise rights are handled in an

appropriate manner, in accordance with the internal

procedures and within the regulatory timeframe; the

DPO of 888 acted to ensure a privacy-aware culture

within 888 by way of conducting training and privacy

awareness exercises to relevant employees, departments

(e.g. customer support and marketing teams) and senior

management; the DPO of 888 produced an annual

report with the objectives of providing an overview of

the key events, regulatory investigations and inquiries,

and data subjects’ complaints since the GDPR entered

into force, enabling 888’s senior management to

ascertain the data protection risks and challenges in the

environment in which the Company operates and the

regulatory exposure, support 888’s senior management

with the effort to take appropriate risk mitigation steps

and allocate appropriate resources for handling data

protection issues, and increase the awareness to data

protection obligations and the 888’s responsibilities;

reviewed and responded to data subjects’ complaints

and regulatory inquiries relating to compliance

with applicable data protection requirements; and

monitored for and investigated data breach attempts/

incidents and took the appropriate steps to enhance its

cybersecurity posture and mitigate the residual risks.

RISK MANAGEMENT STRATEGY cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Increase

Decrease

Stable

TAXATION RISK

The risk

Heightened attention continues to be given to matters

of cross-border taxation in line with the G20/OECD Base

Erosion and Profit Shifting recommendations. Important

international tax rules of relevance to the Company

include:

• Pillar Two: In December 2021, the OECD published the

Pillar Two model rules for domestic implementation

of 15% global minimum tax, and the EU followed suit

shortly thereafter. In early 2022, the OECD will release

the commentary relating to the model rules and

address co-existence with the US Global Intangible

Low-Taxed Income (GILTI) rules. This will be followed

by the development of an implementation framework

focused on administrative, compliance and co-

ordination issues relating to Pillar Two. It is expected

that the global minimum tax will be implemented

at national level by 2023. The Pillar Two rules, once

implemented, are expected to apply to 888, along

with detailed transfer pricing reporting and exchange

of tax information rules known as “Country by Country

Reporting”, insofar as 888’s annual revenues exceed

€750 million. In the context of implementation of

Pillar Two, it is generally expected that national-

level digital service taxes will be revoked. In August

2021, in anticipation of the introduction of Pillar Two

rules internationally, Gibraltar increased its headline

corporate tax rate from 10% to 12.5%.

• UK – DPT and ORIP: Other important international

tax rules include the UK’s Diverted Profits Tax (DPT),

pursuant to which in circumstances where profits are

deemed “diverted” from the UK under the terms of

such legislation, tax at a rate of 25% (increasing to

31% from 1 April 2023) is imposed on profits which

would be attributable to a permanent establishment

(PE) in the UK were an “avoided PE” to exist for the

purposes of the legislation, or on profits diverted from

the UK by way of intra-group transactions having

inadequate economic substance; and Offshore

Receipts in respect of Intangible Property rules (ORIP),

imposing UK tax on the receipt of royalties by offshore

companies deriving from business activity in the UK.

• EU – ATAD: At EU level, the Anti Tax Avoidance

Directive has been implemented in Gibraltar and

Malta, including exit tax, General Anti-Abuse Rules and

Controlled Foreign Corporation rules.

The likelihood of scrutiny of tax practices by

tax authorities in relevant jurisdictions and the

aggressiveness of tax authorities generally remains

high. A finding of taxable presence of the Group in one

or more jurisdictions, a transfer pricing adjustment with

respect to attribution of profit to such jurisdiction(s), or

imposition of another form of tax as mentioned above,

may have a substantial impact on the amount of tax

and VAT paid by 888.

888’s effective tax burden also increases due to the

imposition or increase of gaming duty in markets in

which the Group has customers.

Relevance to strategy

In addition to the financial consequences of a challenge

to 888’s tax structure, tax compliance – and being seen

to be paying the “right amount” of tax – has become a

serious reputational issue as well as being a regulatory

compliance issue. As such, it is crucial that 888 has

a solid basis for its tax positions taken in relevant

jurisdictions.

How the risk is managed

888 aims to ensure that each legal entity within its

Group is a tax resident of the jurisdiction in which it is

incorporated and has no taxable presence in any other

jurisdiction. In addition, 888 consults with tax advisers

not only in jurisdictions in which its Group companies

are incorporated and in which it has personnel, but

also in major markets in which it has customers, in

order to comply with its legal obligations whilst taking

such action as is necessary to prevent the improper

imposition of unlawful or double taxation.

What happened in 2021

888 continues to engage with tax authorities and obtain

legal advice in order to mitigate exposures.

The Group’s Israel subsidiary finalised an Assessment

Agreement with the Israeli Tax Authority which applies to

tax years 2016-2020.

In January 2022, following approval by the Company’s

shareholders at its Extraordinary General Meeting, the

tax residence of 888 Holdings plc was transferred to

the UK by virtue of management and control. Whilst the

Company expects that this should have no material

adverse impact on the Group’s effective tax rate or tax

cash outflow for the foreseeable future, the Company

will from such date be subject to tax and reporting

obligations applicable to a UK resident company.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

RETENTION OF KEY PERSONNEL AND SUCCESSION RISK

The risk

The success of the Company is in part dependent on its

ability to retain its key personnel, including at Board and

senior management level and throughout the business,

and to successfully manage succession planning in the

case of key personnel leaving the Company.

Relevance to strategy

Human capital is important to online gaming businesses,

and online businesses generally, and competition for

highly-qualified personnel is intense in locations in which

the Group is based. Ensuring orderly succession planning

is important to delivering on the Company’s strategy and

avoiding undue disruption to the business.

How the risk is managed

Executive Directors and senior management are

compensated competitively, including an equity

component and bonus partially deferred into shares.

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.

What happened in 2021

On 31 March 2021 Lord Mendelsohn took over from Brian

Mattingley as Chair of the Board. Anne de Kerckhove

was appointed as the Senior Independent Director and

Zvika Zivlin stepped down as Non-Executive Director

in May 2021. Anne de Kerckhove was appointed as

the Senior Independent Director and Chair of the

Remuneration Committee. Limor Ganot was appointed

to the Audit and Remuneration Committees.

BUSINESS DISRUPTION DUE TO PANDEMICS SUCH AS COVID-19

The risk

As a multinational company based in a number of

locations worldwide, the Company is dependent on the

ability of its personnel to maintain their physical health

and wellbeing, successfully carry out their roles from

the Group’s offices or remote locations, and at times

to travel between sites. Business disruptions may occur

when personnel are unable to work or communicate

with one another, including due to pandemics such as

COVID-19. Such outbreaks and the response thereto also

affect the global economy, which can impact consumer

confidence and spending more generally. There is

currently evidence of an increase in customer activity in

the Group’s products, reflecting a general move in the

broader economy from retail to online services. However,

in the event of a prolonged global macro-economic

downturn, consumer spending across the Group’s online

gaming product verticals may also become impacted.

Relevance to strategy

Online gaming businesses are dependent on their

highly qualified personnel in order to operate effectively.

Ensuring that personnel can work and communicate

is key to delivering on the Company’s strategy and

avoiding undue disruption to the business. Our Sport

business is also dependent on sporting events continuing

to be held on which customers are interested in betting.

How the risk is managed

The Company monitors developments which may

affect its sites and customers, and where necessary

and practicable takes steps to mitigate disruption

to the business.

What happened in 2021

In light of the ongoing COVID-19 pandemic and

limitations imposed in various Group locations, including

with respect to self-isolation as well as restrictions on

travel and conferences, the Company has taken a

number of mitigation steps including enabling remote

working and rebalancing of responsibilities between

sites. These actions enabled the Group to deliver its

product development plan and to launch new products

despite the restrictions.

RISK MANAGEMENT STRATEGY cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Increase

Decrease

Stable

REPUTATIONAL RISK

The risk

The reputation of 888 is affected by the profile of both

other online gaming and betting operators, as well as

the gaming and betting industry as a whole. Various

regulators, most notably the UKGC and the Swedish

regulator, have adopted stricter compliance and

enforcement policies, conducting more in-depth reviews

of operational practices and sanctioning operators

found to be non-compliant. There appears to be growing

sentiment in various jurisdictions that existing regulations

do not sufficiently protect minors and vulnerable players

or do enough to prevent the use of illicitly obtained

funds for gambling purposes. More specifically – due to

the COVID-19 pandemic, which resulted in a growth in

gambling spending and a potential increase in problem

gambling prevalence, the industry as a whole has

been the subject of increased criticism and the calls

for stricter regulation, specifically around responsible

gambling and advertising, have intensified. This could

result in reputational damage to the Group, as well as

in the adoption of stricter regulations and enhanced

enforcement measures.

Relevance to strategy

Underage and gambling-related harm, as well as the

use of illicit funds for gambling, are risks associated

with any gaming business, and ensuring compliance

with regulatory requirements for the protection of

vulnerable people and the prevention of money

laundering is critical to maintaining 888’s online

gaming licences. 888 also recognises that, in light

of the COVID-19 outbreak, people are spending more

time at home with potentially increased stress from

economic uncertainty, meaning that 888’s vigilance

on safe gambling and preventing gambling-related

harm is even more important than ever.

How the risk is managed

Staff are trained to provide a safer gaming experience

to customers and to recognise and take appropriate

actions if they identify compulsive or underage activity.

888 also complies with eCOGRA guidelines to protect

customers. Web links to professional help agencies are

provided on 888’s real money gaming sites, and 888

has a dedicated website which provides information

regarding responsible gaming. Players can also limit

their play pattern or request to be self-excluded. 888

furthermore – directly or via industry bodies – seeks

to ensure that legislators and regulators are provided

with accurate and useful information regarding

protections against problem and underage gaming.

Special customer protections were added during the

COVID-19 pandemic, in order to mitigate the increased

risks arising from customers remaining at home for

long periods under conditions of stress. These included

compliance with regulations and guidance issued by

various regulators, including the UKGC as well as the

Spanish and Swedish regulators, as well as adopting

social responsibility guidelines and increasing proactive

responsible gaming communications and measures for

our customers.

What happened in 2021

There have been growing calls for the adoption of

stricter responsible gambling and player protection

measures, as well as stricter advertising restrictions, in

response to the COVID-19 pandemic. There has also

been some public and press criticism against the

industry due to some operators perceived to be taking

advantage of the pandemic to drive business. 888

continued to devote significant resources to putting in

place prevention measures coupled with strict internal

procedures to protect customers, and monitor and

update procedures to ensure that minors are unable

to access their gaming sites. 888 continues to improve

on efforts to detect and prevent instances of problem

gambling, and continues to review and update its

anti-money laundering and safer gambling policies to

better detect players suspected of using illicit funds

for gambling, and to better identify players showing

indicators of harm or patterns of problem gambling.

888 has continued its review of all its websites and

those of its B2B partners with a view to ensuring that

content is responsible and compliant with the applicable

advertising standards. 888 has also continued enhancing

its integration with the National Online Self-Exclusion

Scheme (also known as “GAMSTOP”) to enable its

customers to self-exclude on national level from all UK

online gambling operators.

More information on our Made to Play Safely strategy

can be found at pages 30 to 33.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

PARTNERSHIP RISK

The risk

B2B partnerships expose 888 to business risks as well

as compliance and reputational risks, with increased

pressure on 888 as the licence holder, particularly from

the UKGC, to monitor activities of its B2B partners. 888

furthermore uses services provided by third parties,

including in its Sport vertical during the transition to

888’s new proprietary platform, game providers including

live casino, payment service providers, KYC and age

verification providers, which if disrupted due to general

economic conditions or otherwise, may impact 888’s

operations.

Relevance to strategy

B2B constitutes a material part of 888’s business,

particularly for Bingo in the UK; in addition, its US B2B

contracts have strategic importance for the longer

term. Third party providers are an important part of

maintaining 888’s attractive product offering.

How the risk is managed

888 acted to reduce its dependency on B2B

relationships, by entering into a sales agreement for

the Group’s entire B2C and B2B bingo businesses to

Saphalata Holdings Ltd., a member of the Broadway

Gaming group in December 2021. The transaction is

still pensing obtaining the required regulatory consents

and approvals. Remaining B2B contracts will be

maintained commercially in terms of the functionality

and technology of the B2B platform offered, competitive

pricing, maintaining an ongoing relationship with

B2B partners, and ensuring that 888 has a good

understanding of the needs of its B2B partners

and their owners.

What happened in 2021

In December 2021, 888 entered into an agreement to sell

off the Group’s entire B2C and B2B bingo businesses to

Saphalata Holdings Ltd. 888’s US B2B partner Caesars

acquired William Hill plc in April 2021, a move that could

impact on the relationship with 888. The agreement with

Caesars has been extended until 2026, removing the risk

for the short and mid-term. In June 2021, 888 struck an

exclusive partnership with the Authentic Brands Group,

owner of the Sports Illustrated brand, to develop Sports

Illustrated online sports betting and iGaming products in

the United States. In September 2021, 888 entered into

a transformational acquisition agreement with Caesars

Entertainment, Inc. to acquire the international (non-US)

business of William Hill. Certain of 888’s service providers

have been impacted by the COVID-19 outbreak and its

economic consequences, and 888 is in the process of

identifying these risks and mitigating where possible.

RISK MANAGEMENT STRATEGY cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

Increase

Decrease

Stable

ACQUISITION RISKS

The risk

888 has made several acquisitions in the online gaming

and betting space in previous years, and intends to

continue being active in this area, with value enhancing

M&A being a key pillar of its growth strategy. Acquisitions

of gaming companies carry business risks, such as

potentially overpaying for what are mainly intangible

assets, as well as legal and regulatory risks, including

the receipt of necessary regulatory approvals to the

transaction and exposure to legacy non-compliance of

the seller. Furthermore, integration of acquired entities

gives rise to additional risks, including but not limited to,

potential increased staff turnover, technological failures

in respect of technology migration, increased financial

burdens, and the requirement of management attention

and operational resources.

Relevance to strategy

The online betting and gaming market has undergone

significant consolidation in recent years, with the trend

set to continue, driven by the benefits of scale when

operating across multiple highly regulated jurisdictions.

Value enhancing M&A is a key pillar of 888’s strategic

framework as it looks to build leading positions in the

most attractive end markets.

How the risk is managed

888’s legal, financial and tax advisers ensure that a

comprehensive due diligence is carried out on potential

acquisition targets. Where possible 888 may look to

acquire assets rather than shares of companies, in

order to mitigate exposure to any past non-compliance

issues on the part of the seller. 888 considers the

resources required to integrate acquired entities as

part of its overall evaluation of potential acquisitions,

and thereafter in its annual budgeting and planning.

888 plans extensively for the operational and technical

requirements related to any integration.

What happened in 2021

In September 2021, 888 announced the proposed

acquisition of William Hill International, which would

significantly transform the scale of the business.

The proposed Acquisition would create a global

online betting and gaming leader by bringing together

two highly complementary businesses and combining

two of the industry’s leading brands, and significantly

accelerates progress against 888’s strategy. The

acquisition is currently expected to complete in

H1 of 2022.

LIQUIDITY RISK

888 has currently no third party debt. In addition, the Company’s net cash position improved and business liquidity

increased during 2021.

The Strategic Report, from pages 02 to 61, was reviewed, approved by the Board and signed on its behalf on 8 March 2022.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

VIABILITY STATEMENT

The Directors have considered

that the acquisition of William

Hill International represents

the most significant event

impacting the company in the

viability period. A thorough

review of the going concern

and viability statements has

been carried out in light of the

proposed acquisition of WHI

and accompanying financing. In

forming their view on the viability

of the Group, the Directors

have considered two scenarios,

being where the acquisition

does not proceed and the

Group continues to operate

as in prior years (‘Standalone

Scenario’) and the scenario

where the acquisition proceeds

as expected (‘Acquisition

Scenario’).

The Directors have assessed the viability

of the Group over a three-year period,

taking into account the Group’s current

position and the potential impacts of the

principal risks documented on pages 50

to 59 of the Annual Report. Based on this

assessment, the Directors confirm that

they have a reasonable expectation that

the Company will remain viable over the

three-year period to 31 December 2024.

The Group’s prospects are assessed

primarily via its annual planning and

budgeting processes, which produce

a three year strategic plan supported

by a more detailed one year budget.

A detailed bottom up model is used to

budget the business for a period of one

year in advance and a top down model

for a period of three years..

Stress tests, including reductions in

revenue and periods of closure were

carried out, in order to analyse the factors

which, in the absence of mitigating

actions, could bring about insolvency

of the Company unless capital were

raised; in such cases it is anticipated that

mitigation actions such as a suspension

of dividends and reduction in operating

costs could be implemented in order to

forestall such an outcome.

The process of identifying, assessing and

managing principal risks is set out in the

Audit and Risk Committee Report on

pages 104 to 111. The Directors consider

that this stress-testing based assessment

of the Group’s prospects is reasonable

and the Group’s business model has

proven to be strong, robust and defensive

in both short and long term. As part of the

acquisition scenario, additional relevant

risks were modelled including legal and

regulatory risks.

The Directors confirm their view that they

have carried out a robust assessment of

the emerging and principal risks facing

888, including those that would threaten

its business model, future performance,

solvency and liquidity.

On the basis that the top down model

is sufficiently detailed for the Directors

to review, the Directors consider that

a reasonable period on which it can

and should forecast is three years.

Notwithstanding that, the Board

acknowledges that the Company’s

prospects should persist into the longer

term. The Directors considered whether

three years remained appropriate in the

Acquisition scenario and concluded that

it was appropriate given the timeline

of the Group’s integration plan for WHI

and the repayment date of certain debt

facilities.

Standalone Scenario

In making this viability statement, the

Directors reviewed the assessment

of principal risks facing the Group,

including those that would threaten its

business model, future performance,

solvency or liquidity. The assumptions

modelled aligned with the going concern

assessment for the standalone scenario

on page 126, over a longer three-year

duration.

Acquisition Scenario

In addition to the above, the Directors

considered the impact of the expected

acquisition on the viability of 888. The

assumptions modelled aligned with

the going concern assessment for the

acquisition scenario on page 127, over a

longer three-year duration.

Furthermore, after careful review

of the Group’s budget for 2022, its

medium-term plans, liquid resources and

all relevant matters, the Directors are

confident that the Company and the

Group have adequate financial resources

to continue in operational existence for

the 21 months to 31 December 2023. They

have therefore continued to adopt the

going concern basis in preparing the

financial statements.

Based on all of the above, the Directors

confirm they have a reasonable

expectation that 888 will remain viable

over the three-year period, to 31

December 2024, whether it proceeds as

a standalone Company or following the

completion of the WHI acquisition.

Details of 888’s risk management strategy

and how it manages and mitigates its

risks are set out in the Risk Management

Strategy on page 50 to 59.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 1

Strategic Report

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

BOARD OF DIRECTORS

2. Anne De

Kerckhove

INDEPENDENT NON-

EXECUTIVE DIRECTOR,

SENIOR INDEPENDENT

DIRECTOR FROM MARCH 2021

Anne is currently 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.

1. Lord Jon

Mendelsohn

CHAIR

Jon was appointed as 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 cofounded LLM

Communications, a corporate

and public affairs consultancy

which was acquired by

Financial Dynamics to

create one of the largest

global financial and business

communications companies.

He served as a Managing

Director and later as Chair

of the Global Issues Division,

including after it was acquired

by FTI Consulting. He is also

an investor in early stage and

start-up companies in areas

ranging from digital marketing,

post-production and fusion

energy.

Jon is a Labour life peer who

has been a member of the

House of Lords since October

2013 and is a member of the

International Relations and

Defence Committee.

Jon was a member of the

Audit and Remuneration

Committees until his

appointment as Chair of the

Board in March 2021. He is

Chair of the ESG Committee

which was established in

August 2021.

Changes in 2021

• March 2021, Lord

Mendelsohn became

Chair

• March 2021, Anne De

Kerckhove became

SID and Remco Chair

• ESG Committee

was launched

A R

A E R N

A E NR

COMMITTEE KEY

A Audit

E ESG

R Remuneration

N Nominations

G Gaming Compliance

Chair of Committee

Member of Committee

1. 2.

4.3.

6.5.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

6. 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 member of the global

advisory board of Diners Club

International, 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.

5. Mark

Summerfield

INDEPENDENT NON-

EXECUTIVE DIRECTOR AND

CHAIR OF AUDIT COMMITTEE

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.

3. Itai Pazner

CHIEF EXECUTIVE OFFICER

Itai was appointed as CEO of

the Company in November

2017 and as CEO in January

2019. He was appointed to the

Board in March 2019.

He has worked for the Group

since 2001, initially launching

the 888.com brand in the UK

and positioning 888.com as

a top 3 UK online gaming

operator. Other roles included

Global Offline Marketing

Director, Senior Vice President

Head of EMEA, Senior Vice

President of Casino B2C,

Senior Vice President Head

of B2C and COO.

Prior to joining the Group, Itai

held managerial positions at

Internet Gold, a leading ISP. He

graduated from the College

of Management Academic

Studies and holds a diploma

in corporate finance from the

London Business School.

4. Yariv Dafna

CHIEF FINANCIAL OFFICER

Yariv was appointed as CFO of

the Company and joined the

Board on 1 November 2020.

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

CORPORATE GOVERNANCE STATEMENT

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. As such,

despite being incorporated in Gibraltar, the UK Corporate

Governance Code 2018 (the “Code” or “UK Corporate

Governance Code”) applies to the Company pursuant to the

UK Listing Rules.

The statement contained in this section explains the key features

of the Company’s governance structure and compliance with

the Code. Where the Company has not complied with the UK

Corporate Governance Code, an explanation is given below.

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. The Board remains

committed to the principles of corporate governance in the

Code, which it considers to be central to the effective and

efficient management of 888’s business and to maintaining

the confidence of investors for its long-term success. This report

explains how the Company has applied the main principles

of the UK Corporate Governance Code.

Board Leadership

Statement of compliance with the UK Corporate

Governance Code

During 2021, the Company was in compliance with the Code,

other than:

Code Section 9: Until the appointment of Lord Mendelsohn

on 31 March 2021, Brian Mattingley was Chair of the Board.

Mr Mattingley had been a member of the Board since August

2005 and CEO from 2012 so was not considered independent

on appointment. However, as the Board believed Mr Mattingley’s

continued tenure as Non-Executive Chair was a benefit to all

shareholders. Code Section 12: Until the appointment of Anne de

Kerckhove on 17 March 2021, there was no Senior Independent

Director appointed.

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.

There is a clear and formal division of responsibilities between

the Chair and CEO, with the Chair being responsible for the

effective operation of the Board as a whole, leadership of

the Board in achieving a culture of constructive challenge by

Non-Executive Directors, regularly agreeing and reviewing each

Director’s training and development needs, and supporting

key external relationships; the CEO has the overall executive

responsibility for the running of the Company’s business; and

the Non-Executive Directors are responsible for constructively

challenging and helping develop proposals on strategy; no one

individual has unfettered powers of decision.

The Board has an established calendar of business. This 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 (see pages 62 and 63), which individually

consider their own operating frameworks against the Board’s

business programme.

The Directors have wide-ranging business experience, and

no individual, or group of individuals, dominates the Board’s

decision making.

Board activities

During 2021, the Board has overseen the strategic development

of the Company including the partnership with Sports Illustrated

and the proposed 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.

The Board has received regular regulatory updates and

monitored the Company’s safer gambling activities. It has

reviewed the Company’s risk management systems and

compliance processes. The Board has received regular HR

updates. It has established an ESG Committee and strengthened

the Company’s governance arrangements with the appointment

of an Independent Chairman and Senior Independent Director.

Through these regular updates the Board was able to assess

and monitor the culture of the company, ensuring any policies

and processes are aligned to its values and meet the required

standards of the Board.

Meetings and attendance

The Board plans to meet six times a year. 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.

During 2021, the Board met seven times. Set out below are

details of the Directors’ attendance record at Board and

Committee meetings in 2021.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

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

The Chair holds meetings at least once per year with the Non-

Executive Directors without the Executive Directors being present.

The Non-Executive Directors 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. Under

the UK Corporate Governance Code, it is part of the role of the

Senior Independent Director to lead this process. This took place

in March 2021.

Key stakeholders

The Company’s key stakeholders are its shareholders, employees

and customers as well as the communities in which it does

business. The Board takes care to engage with its stakeholders,

as detailed on pages 49 and 49 and within the ESG Report

on pages 28 to 41 and the Remuneration Report on pages

80 to 103. The interests of the Company’s key stakeholders

are considered in Board discussions and decision-making as

required by the UK Corporate Governance Code. Whilst as

a Gibraltar company, the UK Companies Act 2006 does not

apply to the Company, the matters set out in section 172 thereof,

which include the likely consequences of any decision in the

long term, the interests of the Company’s employees, the need

to foster the Company’s business relationships with suppliers,

customers and others, the impact of the Company’s operations

on the community and the environment (for further details,

see pages 28 to 41), the desirability of the Company maintaining

a reputation for high standards of business conduct (for further

details, see pages 48 and 49), and the need to act fairly as

between members of the Company, are taken into account by

the Board in its decision-making to the extent permitted under

Gibraltar law.

The Board continually reviews its engagement mechanisms

in order to make sure that it is engaging with its stakeholders

effectively.

Engagement with the workforce

The Board and its ESG Committee take a keen interest in the

welfare of 888 employees, never more so than in the current

environment, and embraces its overall responsibility for the

people within the Company. This includes:

• Fair remuneration

• implementing management structures and systems to monitor

and evaluate employee performance and satisfaction;

• promoting diversity at all levels of 888;

• providing employees with the platforms and opportunities to

have formal input into matters that affect them;

• overseeing and allocating resources to employee training; and

• monitoring key health and safety performance goals and

indicators.

In accordance with Section 5 of the Code, the arrangements for

how the Board engages with the Group’s workforce on policies

and practices and more broadly on the business are set out in

the Directors’ Remuneration Report on pages 80 to 103 and the

ESG Report on pages 28 to 41 respectively. The feedback to the

Board is that this approach has been received favourably by the

workforce and as such the Board is satisfied that engagement

is effective. The Board will keep this under review.

Total number of meetings held during the year ended 31 December 2021

and the number of meetings attended by each Director

Board

Audit

Committee

Remuneration

Committee

Nominations

Committee

ESG

Committee

Gaming

Compliance

Committee

Total held in year 7 3 4 3 2 4

Lord Mendelsohn

7 2 2 — 2 —

Itai Pazner 7 — — — — —

Yariv Dafna 7 — — — — 4

Anne de Kerckhove 7 3 4 3 2 —

Mark Summerfield 7 3 4 3 2 4

Limor Ganot

7 1 2 — — —

Brian Mattingley

2 — 2 1 — —

Zvika Zivlin

1 1 — — — —

1 The ESG Committee was established on 15 April 2021.

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

3 Lord Mendelsohn stepped down from the Remuneration and Audit Committees when he was appointed Chair on 31 March 2021.

4 Limor Ganot was appointed to the Audit and Remuneration Committees from 1 April 2021 and attended all meetings thereafter.

5 Brian Mattingley resigned as Chair on 31 March 2021.

6 Zvika Zivlin stepped down as Non-Executive Director on 20 May 2021.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

CORPORATE GOVERNANCE STATEMENT cont.

Investing in and rewarding the workforce

The Board wants the Group’s employees to feel fully supported

and motivated to excel in their roles at 888. As a leading

organisation in the online gambling industry, we are committed

to growing our professional talent and providing each employee

with a great working environment and personal development

opportunities that enhance their pride and engagement.

Leveraging 888’s experience in technology development and

deployment, the Group’s approach to employee welfare and

development is enhanced through its HR information system

and dedicated business intelligence analytics tools.

More information on the Company’s approach to investing in

and rewarding its workforce is set out under ESG Report on

pages 28 to 41.

Shareholder engagement

During 2021, 888’s Chair met with the Company’s major

shareholders in order to discuss the Company’s performance

and to address any concerns.

The Board took steps to ensure that its members (in

particular, the Chair and Non-Executive Directors) develop

an understanding of the major shareholders’ views about

the Company. This included meetings between the Chair

and institutional investors, as well as engagement by the

Remuneration Committee Chair with institutional investors

regarding remuneration matters.

At the Company’s Annual General Meeting held on 20 May

2021, 24.28 per cent. of total votes cast were voted against

the Directors’ Remuneration Policy (“Resolution 3”). There was

extensive engagement with shareholders in early 2021 regarding

the proposed Directors’ Remuneration Policy. Amendments

were made to the proposals to reflect feedback and the Board

understood that while the majority of shareholders consulted

were supportive, a minority had concerns about the proposed

increase to annual bonus.

888 has continued its engagement with shareholders since the

AGM discussing broad ranging remuneration matters including

the rationale for 2021 remuneration decisions, gender pay, safer

gambling and the development of the Group’s ESG strategy. The

Remuneration Committee will continue its open and constructive

dialogue with shareholders on remuneration matters and seek

to incorporate their views in determining and implementing

remuneration policy going forward

All other resolutions were passed with a high level of shareholder

approval and there was no other resolution recommended

by the Board which garnered 20 per cent or more votes

cast against.

EGM December 2021

On 16 December 2021 an Extraordinary General Meeting of the

Company took place at which the sole resolution proposed was

to allow the relocation of the Company’s tax residence from

Gibraltar to the UK.

The Board considered there to be a number of advantages in

the Company moving its central management and control to

the UK and thereby become a UK tax resident. A key advantage

was to improve the overall efficiency in the managing of the

Company by removing the restriction of having to conduct all

Board and Committee meetings outside of the UK. This would

allow the Company to be managed more efficiently and should

in turn reduce costs for the business.

It was further considered that the move would allow for improved

engagement with the London equity market and allow the

Company to hold Shareholder meetings in the UK which

should encourage greater participation in meetings, given the

increased proportion of 888 Shareholders in the UK.

Furthermore, it was considered that there would be improved

engagement with banking partners and legal financial advisers,

plus the improved ability to enjoy the advantages of the UK

as an established financial centre with a stable legal, tax and

regulatory regime.

This was overwhelmingly supported by the Company’s

shareholders with over 99% of total votes cast in favour.

Division of Responsibilities

Chair and Chief Executive Officer

The Chair and the Chief Executive Officer have a close working

relationship to ensure the integrity of the Board’s decision-

making process and the successful delivery of 888’s strategy.

However, there is a clear division of responsibilities between the

Chair and the CEO, which the Board considers an important part

of its corporate governance.

Lord Mendelsohn joined the Board as Chair Designate in

September 2020, in order to have adequate time to build his

relationship with the Chief Executive Officer and other executives

prior to his appointment as Chair of the Board in March 2021

replacing Mr. Mattingley, who stepped down from the Board.

Mr Mattingley was not involved in the appointment of Lord

Mendelsohn in accordance with standard corporate governance

recommendations.

On his appointment, the Board determined that Lord

Mendelsohn was independent. In making this determination,

the Board took into account the fact that he had a business

relationship with the Company within the last three years in his

capacity as co-founder of Oakvale Capital LLP, which provided

the Company with financial advisory services. Nevertheless, the

Board is of the view that Lord Mendelsohn is independent in light

of steps taken by him in order to manage any potential conflicts

of interest, which include stepping down from his role of Chair in

Oakvale, settling his shares of Oakvale into a discretionary trust

over which he has no control; he will furthermore recuse himself

from any commercial discussions in the Company relating to the

appointment of Oakvale as financial advisers in respect of future

transactions.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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 888 as a

whole. The most recent review and update was May 2021. Senior

executives have given written undertakings to ensure compliance

within their business operations with the Board’s formal schedule

of matters reserved to it for decision or approval.

Board composition

During 2021, the Board comprised the following Non-Executive

Directors: Brian Mattingley, (Chair until 31 March 2021), Lord

Mendelsohn (Chair from 31 March 2021), Anne de Kerckhove

(Senior Independent Director from 17 March 2021), Mark

Summerfield, Limor Ganot, Zvika Zivlin (until 20 May 2021), as

well as Executive Directors Itai Pazner 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 62 and 63.

Independent Directors

Half of the Directors, 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, and Senior

Independent Director Anne de Kerckhove, 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.

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.

Composition, Succession

and Evaluation

Nominations Committee

The Board established a nominations committee in 2020 to lead

the process for Board appointments and work with the executive

team on senior talent acquisition as well as succession planning

(the “Nominations Committee”).

The Nominations Committee assists the Board relating to the

composition of the Board. It is responsible for reviewing, from

time to time, the structure of the Board, determining succession

plans for the Chair and Chief Executive Officer, and identifying

and recommending suitable candidates for appointment as

Directors..The Nominations Committee is tasked with preparing

a description of the role and the capabilities required for

Board roles.

The Nominations Committee’s terms of reference are available

on the Company’s website, corporate.888.com.

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. In considering new Board appointments,

diversity (including of gender, age and professional and

educational background) is one of the criteria considered by the

Nominations Committee in accordance with the Board’s Diversity

Policy. The Company’s statement regarding diversity is set out in

the ESG section of the Strategic Report on page 28 to 41.

During the year, the Nominations Committee was comprised

of independent Non-Executive Directors, Anne de Kerckhove

(Chair), Zvika Zivlin (until 20 May 2021), Mark Summerfield, and

Chair of the Board Brian Mattingley (until 31 March 2021).

In March 2021, the Nominations Committee oversaw the

appointment of Lord Mendelsohn as Chair from his role of

Chair Designate. The Nominations Committee completed a

skills metrics and needs assessment with regards to the Non-

Executive Directors and has recommended that the Board add

two additional Non-Executive Directors to deal with the growth of

the company, the strategic focus on the US market, the creation

of the ESG committee and the acquisition of William Hill. The two

searches are at final stages.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

CORPORATE GOVERNANCE STATEMENT cont.

During 2021, the Nominations Committee’s work included

the following:

• Ensuring the smooth succession of Lord Mendelsohn from

Chair Designate to Chair.

• Monitoring the Board evaluation process which is described

on this page.

• Implementing the Board’s diversity policy which is described

below (including considering the gender balance of senior

management and their direct reports).

• Reviewing the composition of the Board including assessing

any gaps in the balance of skills and experience.

• Supporting the development of a diverse pipeline of

candidates for senior management.

• Is currently undertaking the selection and appointment of two

additional Non-Executive Directors.

The Board has appointed the search firm Russell Reynolds

Associates and Odgers Berndtson to assist the Nominations

Committee’s work. The search firms are independent and have

no connection with the Company.

Re-election and appointment of Directors

All Directors are subject to annual reappointment by

shareholders in accordance with the provisions of the UK

Corporate Governance Code.

When proposing Directors for re-election, the Board rigorously

reviews the performance of each Director and assesses whether

the individual’s performance continues to be effective and that

he or she continues to demonstrate commitment to the role,

taking into account the need for progressive refreshing of

the Board.

The Board may appoint any person to be a Director of the

Company and such Director shall hold office only until the next

AGM, when he or she shall be eligible for election or re-election

by the shareholders.

Board diversity policy

The Group has adopted a Board Diversity Policy, which sets

the Company’s aspiration for diversity of its Board without

compromising on the quality or merit of candidates including

their aptitude and ability. The policy refers to the diversity

criteria of age, gender, ethnicity and educational and

professional backgrounds. Whilst the policy seeks to ensure that

appointments are based on the candidate’s strengths set by

objective criteria including their past contributions and potential,

the benefits of diversity are also regarded and decisions are

not influenced by certain protected characteristics including

gender, sexual orientation, marital or civil partnership status,

gender reassignment, pregnancy, the undergoing of fertility

or in vitro fertility treatment, parenthood, part-time or fixed-

term status, age, race, religion or belief, nationality, ethnicity,

country of origin, place of residence, views, disability, trade union

membership and political affiliation. Where appropriate, steps

are taken to identify and remove unnecessary or unjustifiable

barriers. The standards set out in the policy apply to the Board

and its committees, which are the Company’s administrative,

management and supervisory bodies.

The Board was satisfied that during 2021, steps were taken

to promote the diversity objectives of the policy. The Group’s

activities detailed in the ESG section on pages 28 to 41 support

the Group’s diversity objectives.

Amongst other matters, the Board is proud of the geographical

diversity represented on the Board, which includes British,

Israeli and European background Directors bringing diversity of

thought and approach to the boardroom. Having said that, we

are cognisant of the Parker Review recommendations regarding

ethnic diversity and will also take these considerations into

account in our future appointments

The Board is pleased to confirm that it has achieved 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 ESG section of the Strategic Report on pages 28 to 41.

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 January 2022, an external Board evaluation was carried out

by Fidelio Partners. 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 2022

Annual General Meeting. The next Board evaluation is scheduled

to be held in 2023.

Development and advice

The Board understands that there should be a formal,

rigorous and transparent procedure for the induction of new

Directors, which has been formulated with the guidance of the

Nominations Committee.

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 senior management

team with responsibility for the Group’s business make

periodic presentations at Board meetings about their

functions, performance, markets and strategy.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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 senior management,

as well as facilitating induction, evaluation and professional

development activities, and advising the Board on corporate

governance, legal and procedural matters.

The appointment or removal of the Company Secretary

is a matter for the Board as a whole.

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. Such procedures operated

effectively during the year.

Commitment

The opportunity to hold office as Non-Executive Directors of

other companies enables the Directors of 888 to broaden

their experience and knowledge, which benefits the Company.

Executive Directors may be allowed to accept non-executive

appointments with the Board’s prior permission, so long as

these are not likely to lead to any conflict of interest. Executive

Directors may be required to account for fees received from

such other companies. 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.

The Chair has disclosed details of his other significant

commitments to the Board during 2021 and these are detailed

in his biography on page 62.

In order to manage any potential conflict of interest,

Lord Mendelsohn stepped down from his role of Chair of

Oakvale Capital LLP, and settled his shares in Oakvale into

a discretionary trust over which he has no control; he will

furthermore recuse himself from any commercial discussions

in the Company relating to the appointment of Oakvale as

financial advisers in respect of future transactions.

The Board considers that Lord Mendelsohn’s other commitments

will not, interfere with the discharge of his responsibilities to the

Group and is satisfied that he makes sufficient time available to

serve 888 effectively.

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.

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.

Remuneration

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 senior management and the fees of the Chair.

During the year the Company’s Remuneration Committee

comprised Independent Non-Executive Directors Zvika Zivlin

(Chair until 20 May 2021), Anne de Kerchkove (Chair from

20 May 2021), Mark Summerfield, Lord Mendelsohn (until his

appointment as Chair on 31 March 2021) and Limor Ganot (from

1 April 2021).

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 pages 92 and 93.

The Remuneration Committee was advised during 2021 by

Korn Ferry. The remuneration consultant has no other connection

with 888 or any of the Directors. Further details are provided on

page 102.

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 80 to 103. The Remuneration

Committee’s terms of reference are available on the Company’s

website, corporate.888.com.

1 References in this Annual Report to Company Secretary refer to Herzog Fox &

Neeman until November 2021 and Elizabeth Bisby therein afterwards. The Company

Secretary for Gibraltar corporate purposes is Straits Secretaries (Gibraltar) Limited.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

CORPORATE GOVERNANCE STATEMENT cont.

Audit, Risk and Internal Control

Risk management and internal control

The Directors acknowledge 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 Directors monitor the Company’s systems of internal

control and risk management on an ongoing basis, including

identifying, evaluating and managing the significant risks faced

by the Company. 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 2021 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.

888’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.

Audit Committee and auditors

The Board has established an Audit Committee. Details of the

Audit Committee’s functions, together with its specific activities

in 2021, are set out in the Audit Committee Report on pages 104

to 111.

During the year the Company’s Audit Committee comprised

Mark Summerfield (Chair), Independent Non-Executive

Directors Zvika Zivlin (until 20 May 2021), Anne de Kerckhove,

Lord Mendelsohn (until 31 March 2021) and Limor Ganot

(from 1 April 2021).

During 2021, Deloitte carried out the Company’s internal audit

function, reporting to the Audit Committee; during 2021, the

internal auditor provided 12 reports to the Audit Committee

and discussed the internal audit working plan for 2022.

Details of the Company’s risk management strategy and the

Board’s assessment of the Company’s viability in light of its risks

are set out on pages 50 to 59.

Whistleblowing policy

The Company’s whistleblowing 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 compliance officer who is also Head of

Regulatory Affairs and Group Compliance Officer. The policy is

reviewed annually and was last updated in January 2022. 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 designated portal on the Company’s website. 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 Company 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 whistleblowing policy as part of general refreshers of various

Group policies.

No whistleblowing incidents were internally reported by the

Company’s employees during 2021 and up to the date of this

Annual Report.

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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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 page 60, and are incorporated in this

Directors’ Report by reference.

Principal risks and uncertainties

The principal risks and uncertainties faced by the Group

are disclosed in the Risk Management Strategy report on

pages 50 to 59.

Dividend policy

The Company’s policy, as stated in its IPO Prospectus, is to

distribute 50% of its adjusted profit after tax each year.

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.

Relations with shareholders and key

financial audiences

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. In 2021 the Company established

an Investor Relations team to ensure sufficient time and

resources were committed to relations with shareholders

and key financial audiences.

The Board keeps up to date with the views of major

shareholders through meetings and discussions with shareholder

representatives throughout the year. The outcome of this

dialogue and these meetings is reported to the Board. The

programme includes formal presentations of full year and interim

results, analysts’ conference calls and periodic roadshows and

discussion of the Company’s strategy and governance. Details

of engagement with shareholders during 2021 are set out on

pages 48 and 49.

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.

Subject to any COVID-19 related restrictions that might be

in place, all shareholders are welcome to attend the 2022

Annual General Meeting (scheduled to be held in June 2022)

and private investors are encouraged to take advantage of

the opportunity given to ask questions. The majority of Board

members (including the Chairs of the Audit, Remuneration

and Nominations Committees) will attend the meeting and be

available to answer questions.

Environment, Social and Governance statement

The Board has established an ESG Committee which receives

quarterly reports on the Group’s activities in this area. The

Committee is chaired by the Chair, Lord Mendelsohn. The CEO is

the Director responsible for monitoring ESG responsibility within

888. Further details are set out in the ESG Strategy section on

pages 28 to 41.

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

Chair

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REPORT

The Directors submit to the members their Annual Report and

Accounts of the Group for the year ended 31 December 2021.

The Strategic Report, Corporate Governance Statement and

Directors’ Remuneration Report on pages 02 to 61, 64 to 71

and 80 to 103 respectively, form part of this Directors’ Report.

Results

The Group’s profit after tax for the financial year of US$68,9

million (2020: US$11.3 million) is reported in the consolidated

income statement on page 122. The Board of Directors is

not recommending a final dividend to be paid, in light of the

potential capital requirements expected as part of the pending

William Hill transaction. As a result, the total dividend for the

year is 4.5¢ per share (2020: 18.0¢ per share).

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 62 and 63. 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 and appointed as Chair on 31 March 2021).

• Itai Pazner (first appointed 8 March 2019).

• Yariv Dafna (first appointed 1 November 2020).

• Mark Summerfield (first appointed on 5 September 2019).

• Anne de Kerckhove (first appointed 28 November 2017).

• Limor Ganot (first appointed 1 August 2020).

• Brian Mattingley (first appointed 30 August 2005, stepped

down 31 March 2021).

• Zvika Zivlin (first appointed 9 May 2017, stepped down

20 May 2021).

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 80

to 103. There has been no change in the interests of Directors

in shares of the Company between 31 December 2021 and

the date 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.

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 2021, the issued share capital of

the Company comprised 372,759,202 ordinary shares of

GBP £0.005 each (“Ordinary Shares”).

At the Annual General Meeting held in May 2021, 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 31 March

2021, provided that, in accordance with institutional guidelines

issued by the Investment Association, this would permit up to

a maximum nominal value of £1,237,054.92 (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:

(a) 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;

(b) to the allotment (otherwise than pursuant to sub-

paragraphs (a) above and (c) below) of equity securities

up to an aggregate nominal value of £92,788.40; and

paragraphs (a) and (b) above) of equity securities

in connection with an acquisition or specified capital

investment up to an aggregate nominal value of

£92,788.40;

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 2022.

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.

In 2021, the Company did not exercise any of the foregoing

powers and authorities.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Share buyback authority

At the Annual General Meeting held in May 2021, the Board

was authorised to make market purchases of up to 37,115,359 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 2022, 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 2021, 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 and Articles of Association

The Articles can only be amended by a special resolution

at a general meeting of shareholders. The Articles of

Association of the Company were amended by special

resolution at an Extraordinary General Meeting of the

Company on 16 December 2021.

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

Amongst others, the Group:

(i) holds a licence from the Nevada Gaming Commission

as the sole shareholder of an Interactive Gaming Service

Provider licensee, and as such is subject to the Nevada

Gaming Control Act and to the licensing and regulatory

control of the Nevada State Gaming Control Board and

the Nevada Gaming Commission;

(ii) holds a Casino Service Industry Enterprise licence in New

Jersey, and as such is subject to the New Jersey Casino

Control Act and to the licensing and regulatory control of

the New Jersey Division of Gaming Enforcement;

(iii) holds a Gaming Vendor Licence from the Delaware

Department of Finance, State Lottery Office, and as

such is subject to Title 29 of the Delaware Code and

to the licensing and regulatory control of the Delaware

Department of Finance, State Lottery Office;

(iv) holds an Interactive Gaming Manufacturer licence from the

Pennsylvania Gaming Control Board and as such subject

to Title 4 of the Pennsylvania Consolidated Statutes and

to the licensing and regulatory control of the Pennsylvania

Gaming Control Board;

(v) holds a Temporary Internet Sports Betting Operator sports

betting licence from the Division of Gaming of the Colorado

Department of Revenue, and as such subject to Title 44

of the Colorado Revised Statutes and to the licensing and

regulatory control of the Division of Gaming of the Colorado

Department of Revenue;

(vi) holds a Provisional Internet Gaming Supplier Licence from

the Michigan Gaming Control Board, and as such subject

to the Lawful Internet Gaming Act and to the licensing and

regulatory control of the Michigan Gaming Control Board;

and

(vii) holds a Temporary Sports Betting Permit from the Virginia

Lottery Board, and as such subject to Title 58.1 of the Code

of Virginia and to the licensing and regulatory control of the

Virginia Lottery Board.

The Company and holders of Ordinary Shares therein may also

in the future be subject to similar restrictions in other jurisdictions

where the Group secures a gaming licence.

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REPORT cont.

Many jurisdictions 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.

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 888 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:

Other than as stated above, between 31 December 2021

and the date 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.

(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

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 2021, Virtual Share Services Limited (a wholly

owned subsidiary of the Company) held 374,488 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 in note 23.

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, Sinitus Nominees 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.

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

share capital

Nature

of Holding

As at 31 December 2021

Sinitus Nominees Limited in trust on behalf of Dalia Shaked 86,283,534 23.15% Indirect

Abrdn plc 32,511,554 8.73% Indirect

Following 31 December 2021 and prior to publication of this Annual Report

Abrdn plc 30,536,316 8.07% Indirect

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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. There are no such nominated

Directors at present.

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 2021, 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.

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, 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

888 has a zero-tolerance approach to bribery and corruption

and comply strictly with all relevant laws. 888 has adopted

an Anti-Bribery Policy which applies to all 888 employers and

is overseen by the Board. The policy includes 888’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 888 corporate website. 888 carries

out a comprehensive due diligence process of potential high-

risk business associates, which includes certain government

related transactions and certain intermediaries. 888 also clearly

communicates its policy to its suppliers and employees and

carries out staff training on the topic.

During 2021, 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 888 corporate website. Under this

policy, we do not generally engage in political matters other

than lawful lobbying in connection with our business. 888

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. During the year the Group made fiscal

contributions totalling US$196.4 million (2020: US$1167.2 million)

comprising corporation tax of US$12.4 million (2020: US$15.4

million) and gaming duties of US$184.0 million (2020: US$151.8

million).

Financial instruments

The Company considers the Group’s exposure to financial

risks, including exposure to specific countries and trading

counterparties, to be low. Whilst the Company is exposed to

multiple currencies both in regards to its revenue and costs,

it enjoys a partial natural hedge where the same currencies

appear both in its revenues and costs. The Board reviews the

Company’s exposure to currency risk 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 pages 154 to 158.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REPORT cont.

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.

Corporate governance

The corporate governance statement is on pages 64 and 71

and is incorporated in this Directors’ Report by reference.

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 108 and 60 and 61 respectively,

and are incorporated in this Directors’ Report by reference.

Principal subsidiary undertakings

The principal subsidiary undertakings are listed on note 22.

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 online gambling world in creating the best betting

and gaming experiences, and 888 places significant emphasis

on the development of best-in-class products. Approximately

40% of total employment costs relate to staff involved in R&D

activities, and R&D staff costs increased by 15% over 2021,

reflecting the increased scale of the business and additional

investment in product and content.

Our major achievements during the year include the following:

During the year the Group invested significant resources in

building a platform for future growth in the US, including setting

up cloud infrastructure to enable faster rollout of future states,

and creating localised versions of its apps. In June 2021 the

Group signed a long-term partnership with Sports Illustrated to

launch SI Sportsbook, which went live in Colorado in September

2021 following investment in rebranding the in-house sports

platform and adapting it to suit the Colorado regulations and

local customer preferences.

As part of its B2B relationship with the World Series of Poker the

Group also launched its Poker8 platform into the US for the first

time in Pennsylvania, and undertook development work to ensure

it is ready to launch in Michigan subject to regulatory approval.

Casino

During 2021, the Group greatly increased the volume and

quality of games and game providers, deployed across multiple

markets, with an emphasis on greater localization in key markets

and standardized integration with key providers. Our live casino

offering also grew, with diversification of our provider base and

the roll-out of additional live tables, AI-driven personalisation,

and unique features such as embedded live casino, which

enables players to watch a video stream of certain casino

games whilst navigating through the homepage, without having

to enter the game first.

Along with the improved third party content, our in-house studio,

Section8, which provides the Group with high-performance

exclusive content, continued to produce highly popular games

throughout 2021, with leading new titles including Mad Mad Fury

Roads, Book of Scrolls, and Millionaire Genie Megaways

, a

megaways

version of its popular Millionaire Genie game.

Sport

We successfully migrated the majority of our betting business

to our in-house platform during early 2021, and during the

year invested in the development of the platform to support

the migration of 888sport.es in Spain in early 2022. The new

platform provides customers with a quicker and simpler user

experience with greater levels of personalisation. The cutting-

edge sportsbook platform offers customers a wide variety of

betting markets and unique products such as BetFinder, BetFeed

and BetBuilder, as well as personalised recommendations. During

the year the Group also invested in redesigning the betslip user

interface to improve ease of use.

Poker

We continue to launch new features to our mobile-first

recreational focused poker offering, designed to enhance the

gameplay and mirror the real-life poker experience with a

focus on social engagement. New features in 2021 included

Broadcasting, allowing ‘cards up’ streaming on social media,

and the Show/muck card, giving the ability to reveal just a single

card at the end of the hand. The Group also invested in creating

a unified client for poker, allowing it to offer popular Blast games

directly within the 888sport app, opposed to having to be

redirected to the poker app.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Regulation

As a result of changes to the industry codes of practice around

game design, the Group adapted its full suite of casino games

to comply with the new game design criteria, including minimum

spin speeds of 2.5 seconds, the removal of autoplay, and clear

display of game session length and win/loss position.

Germany

Following the receipt of its sports betting licence in Germany

during 2021, the Group launched 888sport.de, which is

tailormade for the German market including localised sports

betting markets, together with the relevant regulatory restrictions

around certain markets offerings and integrating the required

safer gambling features.

Netherlands

The Group undertook significant development work towards the

end of 2021 in order to ready the business for applying for a

licence in the Netherlands and creating localised versions of its

website and applications, where the Group aims to launch in the

second half of 2022 subject to regulatory approval.

Ontario, Canada

The Group undertook significant development work during 2021

to ready itself for launching in Ontario on a locally licensed basis,

which it expects to do during the first half of 2022 subject to

regulatory approval. This included creating localised versions

of its website and applications, together with the relevant safer

gambling processes, customer flows and third-party integrations.

Greenhouse gas emissions

Details of 888’s greenhouse gas emissions are set out in the ESG

section of the Strategic Report on pages 28 to 41.

Post-period events

On 1 March 2022, the UKGC published a statement on its

website related to its investigation following its 2020 compliance

assessment of the Group, which outlined certain shortcomings

in respect of former safer gambling and anti-money laundering

policies, procedures and controls of the Group and pursuant

to which 888 was fined £9.4 million. 888 took immediate and

appropriate actions to improve the relevant internal policies

and procedures to ensure it is fully compliant with its licensing

obligations. The fine has been recorded as a provision in note 19

of the financial statements.

Since January 2022, as resolved at an extraordinary general

meeting of the Company on 16 December 2021, the affairs

of the Company have been conducted so that the central

management and control of the Company is exercised in the

United Kingdom. As a result, from January 2022 the Company

has ceased to be treated as Gibraltar tax resident and instead

has been treated as resident in the United Kingdom for tax

purposes.

Future developments

Likely future developments in the business of the Group are set

out in the Strategic Report on page 06.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REPORT cont.

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 2022 Annual General Meeting.

During the year ended 31 December 2021, 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 (Auditors) Act 2009, 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 104 of the Audit Committee

Report.

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 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

financial reporting standards (IFRSs).

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;

• 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 IFRSs 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 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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Directors’ responsibility statement (DTR 4.1)

The Directors confirm, to the best of their knowledge:

• that the consolidated financial statements, prepared in

accordance with international accounting standards in

conformity with the requirements of the Gibraltar Companies

Act 2014 and UK adopted IFRSs 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:

ITAI PAZNER

Chief Executive Officer

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT

Annual statement

Dear Shareholder,

I am pleased to present the Directors’ Remuneration Report

for the year ended 31 December 2021, my first since becoming

Committee Chair at the 2021 AGM on Zvika Zivlin’s retirement

from the Board. I would like to thank Zvika for his chairmanship

of the Committee.

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.

2021 AGM

Last year we consulted with shareholders regarding some

changes to our CEO’s remuneration package and brought a new

Directors’ Remuneration Policy to our 2021 AGM for approval.

Shareholders were largely supportive of the changes made and

the Policy was approved with 75.7% votes in favour. The Board

understood from our engagement that some shareholders and

one of the proxy agencies had concerns about the proposals.

We have sought to address the concerns raised about annual

bonus disclosure by providing greater detail of performance

against our strategic objectives for the FY21 annual bonus. We

also listened to concerns from some shareholders that the

Policy does not require a percentage of every bonus paid to

be deferred into shares but only bonus in excess of a threshold.

This year, under our current structure the CEO is deferring 36%

of his bonus and the CFO 24% into shares. The Committee is

comfortable for FY21 that this bonus deferral, when taken with

other elements of our policy including 2022 incentives, the 2020

and 2021 inflight LTIPs, prior year bonus deferral and LTIP holding

periods and in service and post employment shareholding

requirements, provides good alignment to shareholder interests

and long-term performance and also enables the Committee if

required to operate clawback and malus. However as mentioned

below, the Committee anticipates it will need to review the

current Policy and operation of Policy following completion of the

William Hill acquisition and its intention is to provide for deferral

of a proportion of each bonus paid.

Our Remuneration Report excluding the new Policy received

94.7% voting support.

Since the AGM, we have continued to engage with our

shareholders discussing broad ranging remuneration matters

including the rationale for 2021 remuneration decisions, gender

pay, safer gambling and the development of the Group’s

ESG strategy to which I refer further below. The Committee

will continue to engage with our shareholders and seek to

incorporate their views in determining and implementing

remuneration going forward including as we review our Policy

and operation of Policy post the William Hill acquisition and

I remain available to shareholders if you would like to discuss

remuneration matters.

Performance in 2021

2021 has been another strong year for 888. EBITDA performance

has continued to exceed Board expectations and there has

been strong progress in achieving the strategic milestones that

will lay the foundations for future growth. We were delighted

to announce our intention to acquire the non US William Hill

business. The proposed acquisition supports our strategy to

be a global leader in online betting and gaming by building

market-leading positions in key regulated markets, driven by

proprietary technology, product leadership, leading brands, and

marketing expertise. Completion is expected during Q2, and the

Committee has considered how to manage incentives, selection

of performance metrics and target setting for 2022 in light of

this and to which I refer further below.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Remuneration for 2021

Our CFO relocated to the UK during 2021 - a move that had

been planned as part of his joining 888 but which had been

delayed because of COVID-19. To facilitate his relocation the

Committee agreed relocation benefits for a finite period of

time. These include a housing allowance which will be paid for

a two year period, school fees and other sundry expenses such

as taxation and immigration advice and removal costs. The

Committee understands the principle that relocation expenses

should be for a limited period to enable an executive to settle in

a new country and is comfortable its approach is aligned to this.

The annual bonus for 2021 was based 60% for the CEO and 70%

for the CFO on adjusted EBITDA and 30% on the achievement of

strategic objectives. In addition, the CEO’s bonus was based 10%

on a US revenue performance condition. Exceptional adjusted

EBITDA of US$166.5 million during the year resulted in full pay-

out of the adjusted EBTIDA part of the bonus. US Revenue grew

but not as strongly as anticipated at the beginning of the year

and as a result the threshold target for this element of the

CEO’s bonus has not been achieved The Committee carefully

assessed performance against the strategic objectives set and

determined 18% of the 30% was payable. No bonus has been

awarded against the regulatory compliance and safer gambling

element of the strategic objectives which is appropriate given

the assessment, findings and enforcement action of the UKGC

review. For FY22 the annual bonus strategic element increases

and separates out the focus on regulatory compliance and safer

gambling as critical areas of focus for our management team.

Noting comments from ISS regarding our annual bonus

disclosure the Committee has provided greater detail this year

to support the performance achieved and bonus outcome. 78%

of the maximum bonus is payable for the CEO and 88% for the

CFO. Annual bonus in excess of 100% of salary is deferred into

shares with one third vesting after one, two and three years. For

2021, the deferral mechanism results in 36% of the bonus paid to

the CEO and 24% paid to the CFO being deferred into shares.

Full details of the targets and actual performance for the

Executive Directors’ bonuses are set out on page 90.

The LTIP awards granted in 2019 were based solely on relative

TSR performance measured over three financial years to

31 December 2021. When the Committee set the targets for

the 2019 award the Committee considered the increasingly

difficult regulatory environment in which 888 operated at that

time and the difficulty of setting accurate long-term financial

performance conditions for a 3-year performance period. In this

context, the Committee concluded a single TSR performance

condition provided a strong alignment of interest between

executives and shareholders and was appropriate. At the time

the metric was set the Committee agreed that in addition

to achieving the TSR condition, it must be satisfied that the

Company’s TSR is reflective of underlying financial performance

over the performance period.

888’s TSR was 123% over the performance period, which was

between the threshold and maximum targets of median and

median + 10% p.a.. As a result, 88.5% of our CEO’s award will vest

in 2022. The Committee is comfortable with the level of vesting

determined by the TSR target. In reaching this conclusion the

Committee noted the excellent absolute TSR over the period

and reported adjusted earnings per share growth from 20.2¢ for

FY18 to 27.3¢ for FY21 growth of 11% CAGR. Our CFO joined the

business in 2020 and does not therefore hold a 2019 award.

Taking account of the strong 2021 business performance as

noted above and the overall management of the business the

Committee is comfortable that the remuneration outcomes for

2021 provide a robust link between performance and reward

and are appropriate. In reaching this conclusion the Committee

has also taken into account the remuneration arrangements

of the workforce overall, noting salary increases, the payment

of bonuses and LTIP vesting to eligible employees and the

shareholder experience over the performance period. The

Committee is satisfied the Policy has operated as intended

and that the exercise of discretion is not necessary.

Application of policy for 2022

Our CEO’s salary will be increased for 2022 by 4% which is

aligned to the workforce increase in Israel, where he is based.

Our CFO’s salary is increased by 9.4% from £320,000 to

£350,000. Our CFO was appointed to the Board on 1 November

2020 on a salary significantly below market. The increase for

2022 brings him closer to market recognising his performance

in role since joining 888 and proven skills and experience. The

Committee understands investors’ concerns with large salary

increases and their preference that any increases to bring newly

appointed executives to market should be made in stages. After

this increase the CFO’s salary and overall remuneration remains

significantly below market. The Committee has noted that given

his role, skills and experience and additionally the significantly

increased size and complexity of the business following the

William Hill acquisition, further steps will need to be taken to

provide him with a market competitive package and so this is

likely to be the first of one or more staged increases.

The annual bonus opportunity is unchanged from 2021 being

200% of salary for the CEO and 150% of salary for the CFO. For

2022 we are introducing Group Revenue excluding the US as a

financial metric alongside EBITDA recognising the importance

of top line growth. We are retaining a separate strategic

element that will focus on continued growth in the US including

US revenue growth, integration of the William Hill business once

the acquisition has completed, regulatory compliance and

safer gambling. The Committee will review the bonus measures

and targets following the William Hill acquisition and consider

whether any changes are required, with any amendments fully

disclosed in next year’s report.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

The LTIP award level for 2022 will remain at 200% of salary for

the CEO and the CFO will receive an award of 150% of salary.

Performance will continue to be determined 50% by relative

TSR performance and 50% by stretching adjusted earnings per

share growth targets. The TSR peer group has been reviewed

for 2022 to take into account M&A activity within the Group

and ensure a robust peer group to assess performance. The

EPS targets have been set based on EPS growth for the current

888 business. The Committee will review the targets following

the acquisition of the William Hill business and make any

adjustments considered appropriate to take into account the

expected performance of the larger business. Any adjustment to

targets will be fully disclosed in the next Remuneration Report.

Details of the TSR peer group and EPS targets are set out in the

Annual Report on Remuneration.

ESG strategy

As explained in the Environmental, Social and Governance

(‘ESG’) section of our strategic review on pages 28 to 41, in 2021

we established a new ESG Committee and developed our ESG

strategy which is an integral part of our wider business strategy.

The Committee has considered carefully the extent to which ESG

objectives should be incorporated into the Executive Directors’

incentives. The priorities for 2022 are continuing our focus on

regulation and safer gambling, both of which are of societal

importance and risk management issues for the business,

and these are included as objectives in the annual bonus. As

the Board reviews the implementation of our ESG strategy

during 2022 and as part of our wider Policy and operation of

Policy review, the Committee will consider the extent to which

additional ESG metrics should be included in incentives for 2023.

Executive Director remuneration going forward

The Committee has noted that post completion of the William

Hill non-US business, 888 will be a significantly larger and more

complex business and that there will be a revised business

strategy for the enlarged group. The Committee anticipates

that it will be necessary to review the Directors’ Remuneration

Policy and the operation of Policy to ensure it is aligned to our

strategy and enlarged group. As part of its review the Committee

will consider whether the Executives’ packages are at the right

level for their roles in the larger and more complex business,

the incentive measures and weightings as well as best practice

features such as annual bonus deferral as noted above and

whether an adjustment is required to Executive Director pension

to align to the workforce which will include former William Hill

employees.

Wider workforce remuneration

Following the proposed acquisition of the William Hill non US

business we will have a significantly enlarged business. The

Committee has taken the opportunity, as part of its review of

workforce remuneration policies and practices to consider with

management, the introduction of an all employee share plan.

As a result the Board is proposing to introduce an all employee

Save As You Earn share option scheme to enable all employees

of the 888 Group to benefit from the Group’s future success.

Shareholder approval will be sought for the scheme at our 2022

AGM. A wider review of workforce remuneration policies and

practices will be carried out following the William Hill acquisition

to ensure the Group’s remuneration structures, practices and

incentives are appropriately aligned across the Group and to

our business strategy as well as providing fair and appropriate

remuneration.

Conclusion

The Committee is comfortable that the operation of the Policy

for 2021 has demonstrated a robust link between performance

and reward and that the operation of the Policy for 2022 will

incentivise and reward management during a year of significant

transformation for the business.

During 2022, the Committee will, as I have explained in this letter,

review the current Remuneration Policy and operation of Policy

and I look forward to engaging with our shareholders should any

changes be proposed.

I look forward to shareholders’ support for the shareholder

resolution for this my Annual Statement and our Annual Report

on Remuneration at our Annual General Meeting to be held in

June 2022.

ANNE DE KERCKHOVE

Chair of the Remuneration Committee

8 March 2022

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Directors’ Remuneration Policy

Remuneration policy

Set out below is 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, however if changes are required earlier

it will be brought back to shareholders to approve any changes required.

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 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 shareholders 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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

Remuneration policy table

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.

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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Remuneration policy table cont.

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

Remuneration policy table cont.

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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Remuneration policy table cont.

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.

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

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.

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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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 23 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.

Itai Pazner

Chief Executive Officer Indefinite subject to termination provisions set out in his

Agreement. Loss of office provisions are detailed above.

Yariv Dafna

Chief Financial Officer Indefinite subject to termination provisions set out in his

Agreement. Loss of office provisions are detailed above.

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 2022. 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.

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.

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

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 Senior Vice Presidents all participate in the same annual

bonus arrangements and with 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 current Executive Directors (CEO and CFO),

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

The Maximum scenario includes an additional element to represent 50% share price growth from the date of grant to vesting.

CEO – Itai Pazner

Maximum

Fixed

Target

Minimum

$’000

$- $1,000

38%24%

40%

100%

$1,222k

30% 30%

$3,130k

38%

$5,992k

$2,381k

$2,000 $3,000$4,000 $7,000$6,000$5,000

Total: $5,038k

Long-term incentive

Short-term incentive

Maximum

Target

Minimum

$’000

$- $500

30% 35%

46%

100%

$610k

27% 27%

$1,318k

35%

Total: $2,027k

$1,000 $1,500 $2,000 $2,500

LTIP value with 50% share price growth

Fixed

Long-term incentive

Short-term incentive

LTIP value with 50% share price growth

CFO – Yariv Dafna

Maximum

Fixed

Target

Minimum

$’000

$- $1,000

38%24%

40%

100%

$1,222k

30% 30%

$3,130k

38%

$5,992k

$2,381k

$2,000 $3,000$4,000 $7,000$6,000$5,000

Total: $5,038k

Long-term incentive

Short-term incentive

Maximum

Target

Minimum

$’000

$- $500

30% 35%

46%

100%

$610k

27% 27%

$1,318k

35%

Total: $2,027k

$1,000 $1,500 $2,000 $2,500

LTIP value with 50% share price growth

Fixed

Long-term incentive

Short-term incentive

LTIP value with 50% share price growth

Assumptions:

• Fixed: Shows fixed remuneration only, base salary as at

1 January, taxable benefits (as disclosed for the previous

financial year and excluding any benefits related to

relocation for the CFO) and pension.

• Target: Shows fixed remuneration plus 50% of the maximum

annual bonus opportunity and 50% of the LTIP award.

• Maximum: Shows fixed remuneration and maximum annual

bonus (200% of salary for the CEO and 150% of salary for

the CFO) and LTIP (200% of salary for the CEO and 150%

of salary for the CFO). The Maximum scenario includes an

additional element to represent 50% share price growth

from the date of grant of the LTIP to vesting.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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 in June 2022. The information on page 93 with respect to Directors’ Emoluments and onwards through

page 103 has been audited.

Operation of Remuneration Policy for 2022

Base salaries

As referred to in the Chair’s Annual Statement, the CFO was appointed on a below market salary and has not received a salary

increase since his appointment on 1 November 2020. The CFO’s salary is increased to £350,000 from 1 January 2022. Although

this increase is above the workforce average, it recognises his performance in role, skills and experience with the resulting salary

still below market.

The CEO’s salary is increased in line with the workforce in Israel.

Director 2022 2021 Increase

CEO ILS2,972,986 ILS 2,858,640 4%

CFO £350,000 £320,000 9.4%

Annual bonus

The CEO’s maximum bonus opportunity is 200% of salary and the CFO’s maximum bonus opportunity is 150% of salary.

The Annual bonus performance measures and weightings for 2022 are as follows:

Metric Weighting

Group adjusted EBITDA 50%

Group Revenue excluding the US business 20%

Strategic objectives 30%

Total 100%

The key focus areas for the strategic objectives are set out below focusing on continued growth in the US (25%), integration of

the William Hill business (30%), regulation (25%) and safer gambling (20%).

The Committee has set EBITDA and Revenue targets for the annual bonus based on expected performance for the 888 business.

The Committee will review the bonus measures and targets, including the weighting to the strategic objectives, following the William

Hill acquisition and consider whether any changes are required.

The actual strategic objectives and the targets for the financial measures are considered commercially sensitive at this time.

Full retrospective disclosure of targets and performance against these including any adjustments as a result of the William Hill

acquisition will be disclosed in next year’s report.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

Long-term incentive plan

Award levels

The CEO will be granted an award under the 888 Long Term Incentive Plan 2015 of 200% of salary and CFO will be granted

an award of 150% of salary.

Performance conditions

For 2022 the performance conditions will continue to be based 50% on adjusted earnings per share growth targets and 50%

on relative TSR.

Target ranges

The targets for the 2022 awards are set out below. Straight line vesting will occur between target points. The EPS targets have been

set based on EPS growth for the current 888 business. The Committee will review the targets following the acquisition of the William

Hill business and make any adjustments considered appropriate to take into account the expected performance of the larger

business. Any adjustment to targets will be fully disclosed in the 2022 Remuneration Report.

Measure

Weighting

(% of max award)

Threshold

(25% of max vesting)

Maximum

(100% of max vesting)

Relative TSR* 50% Median Median + 10% p.a.

compounded

Adjusted EPS 50% 3% CAGR 9% CAGR

* The TSR peer group for 2022 has been reviewed and Gamesys has been removed due to M&A activity. Bally’s Corporation will be added to the peer group. The 2022 peer

group therefore comprises Bally’s Corporation., Betsson AB, Flutter Entertainment plc, Entain plc (formerly GVC Holdings plc), Kambi Group plc, Kindred Group plc, LeoVegas

AB, Playtech plc and Rank Group plc.

The 2022 awards will be subject to a two-year post vesting holding period.

Pension and benefits

888 offers a defined contribution pension scheme (via outsourced pension providers) or cash payment in lieu of pension. Itai Pazner

receives a contribution of 14.89% of base salary, including a contribution for loss of working capacity and Yariv Dafna 15% of base

salary. The pension contributions received by the Executive Directors are aligned to those available to the majority of the workforce

in their country of appointment.

Benefits for 2022 are the same benefits provided in 2021 including additional benefits paid to the CFO in respect of his relocation

to the UK and are in line with our policy.

Chair and Non-Executive Directors fees

The Non-Executive Director fees will remain unchanged from 2021, with the exception of the introduction of a membership fee for

the ESG committee.

• Chair’s fee: £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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Remuneration paid to Executive Directors for service in 2021

The following table presents the Executive Directors’ emoluments in respect of the year ended 31 December 2021 (all amounts are

in US$‘000).

Executive Directors

Salary

$’000

Taxable

benefits

$’000

Annual

bonus

$’000

Long-term

incentives

$’000

Pension

$’000

Total

$’000

Total

fixed

pay

$’000

Total

variable

pay

$’000

Itai Pazner, CEO 2021 885 121 1,431 2,682 132 5,251 1,138 4,113

2020 762 103 1,132 626 114 2,737 979 1,758

Yariv Dafna, CFO 2021 440 418 570 — 66 1,494 924 570

(01 Nov 2020

onwards)

2020 71 9 98 — 11 189 91 98

1 Directors’ remuneration is converted from Sterling and New Israeli Shekels into US$ at the average rate of exchange for the relevant month it was paid save for the annual

cash bonus which is converted into US$ at the year end exchange rate.

2 Salaries for 2021 were ILS 2,858,640 for Itai Pazner and £320,000 for Yariv Dafna.

3. Benefits for Itai Pazner include convalescence and health insurance for Itai Pazner and his family, contribution to “study fund” up to the Israeli tax-free ceiling, car allowance

and meals allowance; For Yariv Dafna include relocation related payments including housing, and schooling, and one-off costs in association with his move from Israel to the

UK (£259,000) as well as car allowance and health, disability and life insurance; (£49,000).

4 A breakdown of the 2021 annual bonus targets and the extent of their achievement is set out overleaf.

(i) Out of the total bonus payment made to Itai Pazner of ILS 4,459,478 (total of 156% of salary), of which an amount equal to 100% of salary (ILS 2,858,640) is paid in cash,

and the excess portion above 100% of salary (ILS 1,600,838) is to be deferred into shares under the DSBP.

(ii) Out of the total bonus payment made to Yariv Dafna of GBP 422,400 (total of 132% of salary), of which an amount equal to 100% of salary (GBP 320,000) is paid in cash,

and the excess portion above 100% of salary (GBP 102,400) is to be deferred into shares under the DSBP.

5 Performance-based long-term incentives are disclosed in the financial year in which the performance period ends. LTIPs for the single total figure in 2021 are the value of

the 2019 LTIP awards, for which the performance period ended on 31 December 2021, and will vest in 2022. The value is based on the average share price for the last three

months of FY21 of $4.75 compared to a share price on the date of grant of $2.18 (£1.67). The value will be restated in the 2022 Annual Report on Remuneration using the

actual share price on vesting. The 2018 LTIP value has been restated to reflect the actual share price on vesting of $4.89 (£3.53).

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, Itai Pazner

is granted personal pension scheme contributions in an amount of 14.1% of base salary, in addition to 0.8% of base salary contribution Yariv Dafna receive a cash payment in

lieu of pension in the amount of 15% of base salary.

Non-Executive Directors’ and Chair’s fees

Current Non-Executive Directors

Fee

$’000

Other

$’000

Total

$’000

Zvika Zivlin

2021 59 — 59

2020 153 — 153

Anne De Kerckhove 2021 193 — 193

2020 144 — 144

Mark Summerfield 2021 156 — 156

2020 140 — 140

Limor Ganot

2021 134 — 134

2020 49 — 49

Lord Mendelsohn

2021 379 — 379

2020 36 — 36

Brian Mattingley (Executive Chairman)

4, 5

2021 110 6 116

2020 411 23 434

1 Zvika Zivlin stepped down from the Board position on 20 May 2021.

2 Limor Ganot was appointed as a Non-Executive Director on 1 August 2020.

3 Lord Mendelsohn was appointed as a Non-Executive Director on 23 September 2020 and Chair of the Board on 31 March 2021.

4 Brian Mattingley stepped down from the Board on 31 March 2021.

5 “Other” for Brian Mattingley reflects reimbursement of expenses connected with his role.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

Annual bonus payments in respect of 2021 performance

The annual bonus opportunity was 200% of base salary for the CEO and 150% of salary for the CFO with 60% of the bonus for the

CEO and 70% of the bonus for the CFO determined by reference to challenging adjusted EBITDA targets based around budget,

10% determined by US revenue targets for the CEO and 30% based on strategic objectives for both Directors.

Based on performance against these performance measures in 2021, 78% of maximum is payable for the CEO and 88% of maximum

is payable for the CFO. Annual bonus in excess of 100% of salary is deferred into shares in one-third tranches for one, two and three

years. This deferral results in 36% deferral of the total bonus paid for the CEO and 24% for the CFO.

Financial performance

The extent to which the adjusted EBITDA and revenue performance conditions in respect of 2021 performance were achieved are

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 60% for CEO

70% for CFO

$126.0m $132.6m $139.2m $166.5m 100%

of maximum

Revenue 10% for CEO $26.2m $28.3m $30.4m $22.0m 0% of maximum

EBITDA performance

To enable performance to be determined and tested on the basis on which the targets were originally set, the Committee has

determined a range of criteria, which have been applied consistently for several years. On this basis reported adjusted EBITDA

is adjusted to take into account of:

• the Group’s withdrawal from any markets during the year, to provide an assessment of the underlying performance of the core

business;

• changes to gaming taxes arising in the year that were not included at the start of the year when the targets were set; and

• movements in foreign exchange rates from budgeted rates (like-for-like adjusted EBITDA growth is calculated on a constant

currency basis).

The Committee agreed the following adjustments to the 2021 reported adjusted EBITDA for bonus purposes.

2021

Reported

(US$ million)

Adjustments

(US$ million)

Adjusted

EBITDA

(US$ million)

Adjusted EBITDA $165.0

– Constant currency adjustment ($9.3) $155.8

– Forced exit of markets $7.6 $163,4

– New gaming taxes $3.1 $166.5

Like-for-like Adjusted EBITDA $166.5

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Strategic performance

Set out below are the strategic objectives set for the Executive Directors and performance against them.

OBJECTIVE WEIGHTING OBJECTIVES PERFORMANCE SCORE

US expansion

40% a) Accelerate 888’s brand

presence by signing a deal with

a strategic partner on terms

acceptable to the Board 20%

b) Secure market access deals in

two additional states 10%

c) Implement the new 888

platform in three US states 10%

a) An agreement with Authentic

Brands Group was signed in

June 2021 to launch Sports

Illustrated Sportsbook with the

first State launch completed

b) Market access deals have

been secured in Virginia and a

second State still to be publicly

disclosed

c) 888 platform implemented in

Pennsylvania, Colorado and

Michigan

36% out

of 40%

Regulatory

compliance and

safer gambling

35% a) Conclude the UKGC

compliance assessment and

licence review

b) Complete Control Centre

rollout in regulated markets to

cover at least 90% of non-US

regulated revenues

No payment under this element

reflecting the assessment and

findings of the UKGC

0% out

of 35%

Market/

product focus

15% a) Realise the budgeted

accumulated growth in

Romania, Sweden, Portugal,

Canada and Ireland

b) Complete the Bingo sale;

alternatively implement an

internal reorganisation and

optimisation plan

c) Sports revenue through

Spectate platform to achieve

target set by the Board

a) Growth achieved significantly

above budget (22.6% above

budget)

b) Bingo sale was signed and

separation processes are

ongoing

c) Target achieved

15% out

of 15%

Operational

excellence/

people agenda

10% a) Achieve at least 80% of the

hiring plan to support US

growth and business expansion

b) Development and Board

approval of five-year strategic

plan

c) Development and Board

approval of ESG strategy,

including development of

employee engagement

d) Workforce strategy to reduce

average employment cost

a) The plan to set a more robust

organisation to support the US

growth was executed

b) Board approval of five-year

Acceler8 strategic plan

c) ESG strategy developed

with Board approval and

establishment of ESG

operational committee

d) Workforce employment cost

strategy developed but

not executed in light of the

different M&A activity

9% out

of 10%

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

Total bonus payable for 2021

Director

Adjusted

EBITDA

(% payout

of 60% for

CEO and

70% for CFO)

US revenue

(% payout

of 10% for

CEO only)

Strategic

objectives

(% payout

of 30%)

Total payout

(% of

maximum)

Total payout

(% of salary)

Total payout

$’000

Itai Pazner 60% 0% 18% 78% 156% $1,431

Yariv Dafna 70% N/A 18% 88% 132% $570

Long-term incentive awards with performance period ending in the year ended 31 December 2021

Long-Term Incentive Plan

The 2019 LTIP awards have a performance period that ended on 31 December 2021 and the awards are due to vest in 2022. The

awards are based solely on TSR performance. In determining the 2019 award performance conditions, the Committee considered

the increasingly difficult regulatory environment in which 888 operates and the difficulty at the time of setting accurate long-term

financial performance conditions for the next three-year period. In this context, the Committee concluded a single TSR performance

condition provided a strong alignment of interest between executives and shareholders and was appropriate.

The table below sets out the achievement against the TSR performance condition, resulting in total vesting of 88.5% of maximum.

TSR

Performance level Performance required % vesting

Below threshold Below median 0%

Threshold Median = 75.1% 25%

Stretch or above 33% above median = 133.0% 100%

Actual achieved 123.4% 88.5%

1 TSR peer group comprises GVC Holdings, Sportech, Playtech, Paddy Power Betfair, William Hill, Betsson AB, International Game Technology, JPJ Group, Kindred Group and

OPAP SA.

In addition to performance against the TSR condition, for vesting the Committee determined at the time the award was granted that

it must be satisfied that the Company’s TSR is reflective of underlying financial performance. The Committee is comfortable with the

level of vesting determined by the TSR target and in reaching this conclusion has noted that absolute TSR over the period was strong

and reported adjusted earnings per share has grown from 20.2¢ for FY18 to 27.3¢ for FY21 growth of 11% CAGR.

Details of the level of vesting for the Chief Executive Officer and the actual number of shares and estimated value in respect of his

awards granted under the 2019 LTIP, based on the above, is shown in the table below:

Executive

Number of

awards

at grant

Number of

awards

to lapse

Number of

awards

to vest

Dividend

accrual on

vested awards

value

US$

Value of

awards

excluding

dividend

accrual

US$

Itai Pazner 638,332 73,408 564,924 0 2,681,766

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 US$4.7471 (based on the exchange rate of 1.35) being the average share price for the last three months of 2021.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

Scheme interests awarded during the year

The table below sets out the grants under the 888 Holdings plc Long Term Incentive Plan in 2021, which includes a pro-rated 2020

LTIP award granted to Yariv Dafna that is subject to the same performance conditions as the CEO’s 2020 LTIP award, and the

Deferred Share Bonus Plan awards made in relation to the 2020 bonus.

Executive Award Type Grant date

Number of

awards

granted

Face value

of awards

granted

Face value

of awards

as % salary

% vesting

at threshold

performance

Itai Pazner LTIP

18-Mar-21 358,810 $1,739,230 200% 25%

Deferred share bonus 18-Mar-21 63,735 $308,937 N/A NA

Yariv Dafna LTIP

18-Mar-21 137,733 $667,622 150% 25%

LTIP

18-Mar-21 34,433 $166,904 37.50% 25%

Deferred share bonus

18-Mar-21 5,930 $28,744 N /A NA

1 Face value was calculated using share price on the date of grant, which was £3.485 (18 March 2021). The awards are awards of Ordinary Shares.

2 These awards are due to vest subject to performance conditions being met at the end of the performance period ending 31 December 2023. The award is subject 50% to a

TSR performance condition versus a peer group comprised of Betsson AB, Flutter Entertainments plc (formerly Paddy Power Betfair plc), Gamesys Group plc, GVC Holdings

plc, Kambi Group plc, Kindred Group plc, LeoVegas AB, Playtech plc and Rank Group plc. (25% of the TSR awards vest for median performance with full vesting achieved for

out-performance the median plus 10% p.a.). The remaining 50% is subject to an adjusted EPS growth performance condition of 3% CAGR to 9% CAGR.

3 These awards are due to vest subject to performance conditions being met at the end of the performance period ending 31 December 2022. The award is subject 50% to a

TSR performance condition versus a peer group comprised of Betsson AB, Flutter Entertainments plc (formerly Paddy Power Betfair plc), Gamesys Group plc, GVC Holdings

plc, Kindred Group plc, Sportech, Playtech plc, Rank Group plc and William Hill. (25% of the TSR awards vest for median performance with full vesting achieved for out-

performance the median plus 10% p.a.). The remaining 50% is subject to an adjusted EPS growth performance condition of 3% CAGR to 9% CAGR.

4 The Deferred Share Bonus plan awards will vest in equal tranches one, two and three years from the date of grant.

Loss of office payments and payments to past Directors

There were no loss of office payments to Directors in the year.

Aviad Kobrine stepped down from his role as CFO on 1 November 2020. Mr Kobrine received salary, benefits and pension contribution

for the balance of his notice period to 24 January 2021, totalling $48,363. Mr Kobrine’s 2019 LTIP award will vest at 88.5% of maximum

on the normal vesting date pro-rated for service.

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. The CEO has met the requirement and the CFO, only appointed on 1 November 2020, has yet to meet

the requirement.

Details of the Directors’ interests (and of their connected persons) in shares as at 31 December 2021 are shown in the table below.

There were no changes in the Directors’ interests in shares between 31 December 2021 and the date of this Report.

Number of Ordinary Shares at 31 December 2021

Director

Legally

owned

Unvested

shares with

performance

conditions

Unvested

without

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 647,857 1,895,474 — — 78,098 7,181 2,628,610 733,136 324%

Yariv Dafna — — — 172,166 5,930 — 178,096 5,930 6%

Mark

Summerfield 32,412 — — — — — 32,412 — N/A

Anne De

Kerckhove — — — — — — — — N/A

Lord Jonathan

(Jon)

Mendelsohn 60,409 — — — — — 60,409 60,409 N/A

Limor Ganot — — — — — — — — N/A

Brian Mattingley

142,857 — — — — — 142,857 142,857 N /A

Zvika Zivlin

— — — — — — — — 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 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 2021 of £3.010. FX ILS/GBP = 4.1.

3 Shares held on the date they stepped down from the Board.

No Director was materially interested during the year in any contract which was significant in relation to the business of 888.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

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.

31 Dec

2011

31 Dec

2012

31 Dec

2013

31 Dec

2014

31 Dec

2015

31 Dec

2016

31 Dec

2017

31 Dec

2018

31 Dec

2020

31 Dec

2021

31 Dec

2019

888 Holdings

FTSE 250

200

400

600

800

1,000

1,200

* 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”.

Total remuneration history for CEO

The table below sets out the total single figure remuneration for the CEOs 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.

2012

1,2

2013 2014 2015

3,4

2016

2017 2018

2019

Itai

Frieberger

2019

Itai

Pazner 2020 2021

Total remuneration

($000s) 1,060 1,275 1,331 5,415 1,855 10,771 2,518 465 1,728 2,567 5,251

Annual bonus (%) 100% 100% 100% 100% 100% 100% 29.2% 74.6% 74.6% 92.5% 78%

LTIP vesting (%) 0% 0% 0% 59% 100% 100% 73.8% 30.6% 30.6% 89.9% 88.5%

1 Brian Mattingley was appointed as CEO on 27 March 2012.

2 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.

3,4 Reflects Brian Mattingley’s tenure as CEO until 13 May 2015.

5 Itai 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.

6 Itai 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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

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 2020 and financial year 2020 to financial year 2021, for Directors and employees of the Group, taken as a whole. Exchange

rates were normalized for comparative years in order to neutralise foreign exchange effects.

Change 2021 vs 2020 Change 2020 vs 2019

Base salary Benefits Bonus Base salary Benefits Bonus

Itai Pazner

9% 10% 23% 4% −2% 29%

Yariv Dafna

N/A N/A N/A N/A N/A N /A

Brian Mattingley

N/A N/A N/A 0% N/A N/A

Mark Summerfield

4% N/A N/A N/A N /A N/A

Zvika Zivlin

N/A N/A N/A 0% N/A N/A

Anne De Kerckhove

26% N/A N/A 12% N/A N/A

Jon Mendelsohn

N/A N/A N/A N/A N/A N /A

Limor Ganot

N/A N/A N/A N/A N/A N /A

Employees

−2% −1% −14% 0% −7% 88%

1 As set out in last year’s remuneration report, the CEO received a 9.1% salary increase for 2021 reflecting his performance and increased role and responsibilities since his

appointment and the increase in scale and complexity of the business.

2 Yariv Dafna first appointed 1 November 2020.

3 Brian Mattingley stepped down on 20 May 2021.

4 Mark Summerfield joined the ESG committee during the year.

5 Zvika Zivlin stepped down 20 May 2021.

6 Anne De Kerckhove took over as Remuneration Committee Chair during the year following Zvika Zivlan’s retirement and was also appointed Senior Independent Director

on 17 March 2021 and joined the ESG committee during the year.

7 Lord Mendelsohn was first appointed to the Board on 23 September 2020 and Chair of the Board on 31 March 2021.

8 Limor Ganot first appointed 1 August 2020.

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

DIRECTORS’ REMUNERATION REPORT cont.

CEO Pay ratio

Method

25th

percentile

50th

percentile

75th

percentile

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

25th

percentile

50th

percentile

75th

percentile

Salary $885,000 $59,000 $78,000 $111,000

Total pay and benefits $5,251,000 $85,000 $110,000 $148,000

The table above sets out the CEO pay ratio for 2019 to 2021. 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.

2021 has been another strong year for 888 which is reflected in the incentive outcomes for the year. The increase in the ratio for 2021

results from the increase in the CEO’s salary and annual bonus as well as the high level of incentive outcome as a result of the very

strong performance of the business and the exceptional share price performance which other eligible Group employees have also

benefited from. $1,451,854 of the CEO’s total pay for 2022 is as a result of share price performance over the vesting period of the

2019 LTIP award.

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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

100

Relative importance of spend on pay

The following graph sets out the actual expenditure by 888 in financial years 2020 and 2021 on items that were the most significant

outgoings for 888 in the last financial year, including on remuneration to Group employees.

100

150

200

250

300

350

Employee pay

and benefits*

US$ millions

143

142

237

306

172

197

Marketing expenses** Dividends*** Tax****

-1%

+29%

+85%

+14%

2020

2021

The comparables chosen were the following:

* the employee pay figure includes employee benefits in accordance with the financial statements (including both staff costs and share benefit charges);

** marketing expenses – This reflects the amount invested in development of the future revenue stream of 888 driven by customer acquisition;

*** dividends – This reflects amounts distributed to shareholders;

**** taxes and duties – This is a necessary cost of doing business in a regulated business environment.

Calculation of the comparables is as set out in the 2021 Consolidated Income Statement and Notes to the Financial Statements.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

101

DIRECTORS’ REMUNERATION REPORT cont.

Committee members, attendees and advice

The Remuneration Committee consists solely of Non-Executive Directors. Zvika Zivlin chaired the Committee until the 2021 AGM where

he stepped down from the Board, Anne de Kerckhove was a member of the Committee until the 2021 AGM where she took over as

Committee Chair. Committee members during the year include Mark Summerfield, Lord Mendelsohn until 31 March 2021 when he was

appointed Chair of the Board and Limor Ganot from 1 April 2021. Details of attendances at Committee meetings are contained in

the statement on Corporate Governance on pages 64 and 65. 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 corporate.888.com/investor-relations/

corporate-governance/board-committees.

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 does not provide any other services to 888. 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 2021 were £80,000

(2020: £60,000). 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 Group’s SVP for Human Resources and Chief Operating Officer’s roles supported by the CEO are to engage with the wider

workforce and views and feedback on remuneration are provided to the Committee and wider Board. The Company engages with

its workforce through a number of different channels (as set out in more detail on pages 48 and 49). Engagement with the workforce

to explain broader pay policies and practices and the alignment to the Executive Directors’ Remuneration Policy is carried out

throughout the year focusing on different elements of pay at different times in line with the Group’s annual performance, strategy and

reward agenda, through a variety of existing engagement channels including town halls and the cascade of Group communication

by the Chief Executive Officer to his key team and then throughout the organisation.

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. Last year’s Remuneration Report

noted that the Committee had in advance of the 2021 AGM written to investors representing over 80% of 888’s share capital to

seek feedback on changes proposed to our Directors’ Remuneration Policy. The Board understood from our engagement that some

shareholders and one of the proxy agencies had concerns about the proposals. We have sought to address the concerns raised

about annual bonus disclosure and have committed to review and bring into line with investor expectations the annual bonus deferral

structure as part of a wider remuneration review following closure of the acquisition of the non-US William Hill business. As set out in

the Chair’s Annual Statement, since the 2021 AGM 888 has continued its engagement with shareholders discussing a broad ranging

of remuneration matters including the rationale for 2021 remuneration decisions, gender pay, safer gambling and the development

of the Group’s ESG strategy. Our engagement with investors will continue as we carry out the remuneration review noted above.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

102

Statement of shareholder voting at AGM

Details of votes cast for and against the resolutions to approve the Annual Report on Remuneration and the Remuneration Policy at

the 2021 AGM are shown below.

Advisory Vote to approve

Annual Report on Remuneration

(at 2021 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 271,974,716 94.70% 215,388,197 75.72%

Against 15,232,499 5.30% 69,066,028 24.28%

Vote Withheld 4,212 2,757,202

Approved by the Board of Directors and signed on behalf of the Board:

ANNE DE KERCKHOVE

Chair of the Remuneration Committee

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

103

AUDIT COMMITTEE REPORT

Annual statement

Dear Shareholder,

The Committee was kept busy during the year with a number

of potential transactions, including the sale of the Company’s

Bingo business and the proposed acquisition of William Hill

International. However, the Committee did not neglect its

ongoing role of reviewing the key risks facing the Company and

its financial information, ensuring constructive, yet independent

and robust, challenge and support to both management and our

internal and external auditors. I would once again like to thank

my colleagues, Anne de Kerckhove and Limor Ganot for their

support during an often hectic 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 is 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 is conducted by Deloitte and the scope of

their plan is agreed with both management and the Committee

to ensure it helps the Board consider the effectiveness of

controls over certain of the significant risks disclosed in these

accounts. I commend both Deloitte and management for

ensuring that the planned work for the year was completed

despite both the operational constraints arising from the

pandemic and the extensive M&A activity.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

104

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 Gibraltar is the Company’s

statutory auditor including for the purposes of issuing an audit

report pursuant to the Gibraltar Companies Act 2014. 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.

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 June 2022 to answer any questions.

MARK SUMMERFIELD

Chair of the Audit Committee

8 March 2022

HIGHLIGHTS OF THE COMMITTEE’S WORK

DURING THE YEAR WERE CONSIDERATIONS OF:

Topic

The impact of changes to the complex legal and regulatory

environment in which 888 operates on its business, sector and

market, together with the Group’s ongoing engagement with

regulatory bodies.

Challenges raised

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 Group’s response.

This included overseeing management’s full review of the

Company’s business risk assessment, supported by leading

legal and AML advisers, which was submitted to the UK

Gambling Commission during 2021.

Topic

888’s exposure to corporation tax, gaming duties, VAT and

similar taxes.

Challenges raised

The Committee considered the advice received and

challenged the appropriateness of the conclusions reached

by management on key tax and gaming duty matters. It also

considered the analysis and conclusions reached by EY on

the same matters as part of their audit work. The Committee

furthermore reviewed the terms of the Company’s settlement

with the Israeli Tax Authority which was concluded in December

2021, as well as challenging and reviewing the impact of the

agreement on the Company’s overall tax position.

Topic

The carrying value (including goodwill) of the US and the

Bingo businesses.

Challenges raised

The Committee carefully considered the prospects of the

Bingo businesses and concluded that no impairment was

required.

The considerable opportunities provided by the regulation

of certain US states and the Group’s plans to address them

meant the Committee concurred with management’s view

that no impairment of the US B2C business was required.

Topic

The adequacy of 888’s IT systems and controls together with

a review of management’s response to cyber-attack and

incidents of attempted fraud.

Challenges raised

The Committee examined management’s and the internal

auditors’ reports on cyber security and fraud. Discussions

with management led to support for a proposal to further

strengthen the Group’s defences, including the decision to

outsource certain functions.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

105

HIGHLIGHTS OF THE COMMITTEE’S WORK

DURING THE YEAR WERE CONSIDERATIONS OF:

Topic

The assessment of the risks facing the business.

Challenges raised

The Committee reviewed the risk register and risk appetite

statement to ensure that it remains an accurate and relevant

reflection of the Board’s approach to risk management.

Topic

The viability statement and going concern statement

prepared by management.

Challenges raised

The Committee reviewed management’s analysis of

the Company’s going concern and viability statement,

including updated forecasts and downside scenarios that

better reflected the anticipated operating and economic

environment. It concluded that the Company has adequate

resources to continue in operational existence for the

foreseeable future.

Topic

888’s anti-bribery, anti-money laundering and whistleblowing

obligations.

Challenges raised

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.

AUDIT COMMITTEE REPORT cont.

The Group’s corporate governance arrangements, including

the risk register, going concern and viability statements and

corporate policies will all be thoroughly reviewed during 2022

in light of the proposed acquisition of William Hill International

and the accompanying financing announced by the Company

in 2021.

Committee composition

During 2021, the Committee comprised at least three

independent Non-Executive Directors, being Mark Summerfield,

Limor Ganot (who joined the Committee on 1 April 2021 when

Lord Mendelsohn stepped down due to taking up his role as

Chair of the Board) and Anne de Kerckhove. Zvika Zivlin also

served on the Committee until 20 May 2021 when he stepped

down from the Board.

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, 888’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.

Details of meetings of the Audit Committee are set out in the

Corporate Governance Report on page 70.

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 2021

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

888 operates within an increasingly regulated marketplace and

is challenged by regulatory requirements across all areas of its

business. This creates risk for the Company 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 to

produce regular updates so that the Board and Audit Committee

understand what is happening in the regulatory landscape.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

106

During 2021, the Board and Audit Committee received regulatory

briefings from the Company’s lawyers and reviewed updates on

the management of regulatory risk from management, as well

as reviewing the status of litigation involving 888 and the related

accounting for 888’s obligations in the financial statements. This

included examination of the changing regulatory landscape in

Germany, the Netherlands and Ontario, Canada, and defence

of the Company’s position in those markets. The Committee also

considered the changing risk environment as regards Austrian

player litigation and changes to compliance and quality

assurance controls in other markets where the regulatory regime

has evolved.

The Audit Committee had a key role during 2021 working with

the ESG Committee in overseeing the Company’s response to

the UK Gambling Commission compliance assessment which

was initiated in October 2020 and all remediation actions

executed by management in response to the Gambling

Commission’s findings.

Taxation

The Board oversees and sets the Group’s tax strategy and

evaluates tax risk. In undertaking this task, the Group uses

its legal and tax advisors. During the year, the Group’s legal

advisors have kept the Board and Audit Committee apprised of

both existing and emerging tax risks and, where appropriate,

these have been considered by the Board in conjunction with

888’s commercial strategy.

In 2021, the Board and Audit Committee discussed the Group’s

tax related matters including the Group’s tax and intellectual

property holding structure. Furthermore, the Committee

received detailed updates regarding the finalisation of the

Tax Assessment Agreement in Israel and the migration of 888

Holdings plc to the UK for tax purposes. 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 8 and 27 to the financial statements.

Goodwill and intangible assets

As set out in note 11 to the consolidated financial statements,

888 has significant goodwill and other intangible assets relating

to the acquisitions of the Bingo and US B2C businesses, the

development of gaming platforms and software, and the

internal costs incurred in respect of the new data centre

project in Dublin.

The Committee reviewed the cash flow forecasts supporting the

carrying value of goodwill and other intangible assets including

the key assumptions and estimates as well as the impact of

the recent regulatory developments and the potential sale of

the bingo business, and satisfied itself that no impairment is

required in relation to the carrying value of the US B2C or

Bingo businesses.

In addition, the Committee reviewed the board paper in relation

to the appropriateness of the capitalisation of costs relating

to the development of gaming platforms and software with a

view to understanding and mitigating the financial reporting

risks involved.

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 and the internal

controls which are in place 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. 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 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 is in advanced stages of

implementing the relevant ISO standard.

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 50 to 59.

The Board has confirmed that it has carried out a robust

assessment of the principal risks facing 888, including those

which threaten its business model, future performance, solvency

or liquidity.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

107

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. During the year, the Board has not been advised by the

Audit Committee of, nor identified itself, any failings, frauds or

weaknesses in internal control which it has determined to be

material in the context of the financial statements.

The Committee believes that appropriate internal controls

are in place through the Group, that 888 has a well-defined

organisational structure with clear lines of responsibility and a

comprehensive financial reporting system. The Committee also

believes that the Company complies with the FRC Guidance on

Risk Management, Internal Control and Related Financial and

Business Reporting.

AUDIT COMMITTEE REPORT cont.

Going concern and financial viability

During 2021, 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 scrutinized 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. In its going concern assessment, the

Directors have considered two cases. The first assumes the

Group on a standalone basis as the William Hill International

transaction is yet to be completed and pending shareholders’

approval (the “standalone” case) and a second in which the WHI

acquisition completes in Q2 2022 (the “acquisition” case). While

there were no immediate or anticipated issues, the Committee

challenged the identification of these significant risks and the

assumptions comprising the viability analysis carried out by

management, and deemed appropriate the disclosure around

both going concern and the viability statement. The Group’s

Viability Statement is on pages 60 and 61.

Fair, balanced and understandable

The Committee considered whether the 2021 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. The

Committee and subsequently the Board were satisfied that,

taken as a whole, the 2021 Annual Report and Accounts are fair,

balanced and understandable.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

108

Performance of Audit Committee

The Audit Committee’s performance was evaluated as part of

the Board evaluation initiated in December 2021 as detailed

on page 68. The overall conclusion of the review was that the

Committee remains effective in discharging its functions and

reporting to the Board.

Internal auditors

The Group’s internal audit function is outsourced to Deloitte

Israel. 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. It has also reviewed

reports from Deloitte Israel in relation to all internal audit work

carried out during the year and monitored response and follow

up by management to internal audit findings. In the past three

years, the internal auditors have reviewed various aspects of

888’s customer service and business operations, finance, B2B

and B2C activities, product technologies, human resources and

regulation. In 2021, Deloitte Israel issued reports on GDPR, SOCIR,

Marketing Regulations Compliance, Access Management, cash

flow and bank account management, Criminal Finances Act,

Israel location review, Multi currency pricing, SEO Procurement,

Self-exclusion, US Operations and B2C marketing regulations, as

well as presenting the 2022 internal audit plan.

Certain matters were identified which required modifications to

procedures and improved controls, which either have been or

are being implemented by management. The Committee has

evaluated the performance of Deloitte Israel, and has concluded

that they provide constructive challenge and consistently

demonstrate a realistic and commercial view of the business.

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 Philip Young, a partner in EY’s London office. Angelique and

Philip have been responsible for 888’s audit since 2018 and 2019

respectively. Unfortunately, due to unforeseen circumstances

Philip was unable to carry out the year end audit and sign the

audit opinion.

EY moved quickly to appoint two London based partners to work

with Angelique to oversee the completion of the audit, Marcus

Butler and Jon Killingley. Marcus has been the independent audit

partner since 2018 and, as such, is very familiar with the key

audit areas. Jon previously worked on our audit between 2014

and 2016, and also knows the Group well. The Audit Committee

Chair spent additional time with Marcus and Jon to ensure they

had been able to satisfactorily consider all the necessary areas

of the business and has received the necessary reassurances.

The Committee thanks them for stepping in during what is a very

busy time for them both.

Adequate time is given to each of the above steps in order

to allow for full and meaningful review.

The Annual Report and Accounts is finally reviewed by the

full Board for approval.

The draft Annual Report and 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 Group’s CFO and SVP Finance review the entire Annual

Report and Accounts and lead an iterative process pursuant

to which the relevant internal and external stakeholders

review and provide comments.

The Group’s Finance Department prepares the accounts.

These are reviewed 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 remuneration consultant drafts the Directors’

Remuneration Report (including the Remuneration Policy)

which is then reviewed by the Group’s Finance Department

and the Remuneration Committee.

The Group’s legal advisers draft the regulatory review

and risk report in line with the legal advice received by

the Group, regulatory developments and developments in

relevant risks and risk discussions held by the Board.

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.

ANNUAL REPORT APPROVAL PROCESS

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 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

Remuneration and ESG consultants.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

109

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 incumbent

auditor against independence threats are sufficient and

comprehensive;

• Ensuring that the quality and transparency of communications

with 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. In addition,

during 2021 the Audit Quality review team of the Financial

Reporting Council considered certain aspects of EY’s audit of

our 2020 consolidated financial statements. The Committee has

received a full copy of the findings and was pleased to note that

no key findings arose from the review, with only two minor areas

for improvement noted. These areas have been discussed with

EY and the Committee is satisfied that they were addressed

appropriately during the 2021 audit.

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 June 2022. If reappointed, EY

will hold office until the conclusion of the next Annual General

Meeting at which accounts are laid.

AUDIT COMMITTEE REPORT cont.

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 will consider

the timing of an audit tender process during 2022 in the

context of the Company’s transformational acquisition of

William Hill. 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.

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 did not highlight any material internal

control weaknesses and management has committed to making

appropriate changes to controls in areas highlighted by EY.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 2

Governance

110

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 US$0.1 million, 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 4 to the Financial Statements.

This year, in undertaking the circular and prospectus for the

proposed acquisition of William Hill International and associated

capital raise, that is expected be published during H1 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 audit 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 International and Capital Raise, total

fees for non-audit services represented 256% (2020: 14%) of

the total audit fees and 298% of the average audit fee for the

preceding three-year period.

Factors considered by the Audit Committee in being satisfied as

to EY’s continued audit 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

• It was not anticipated that EY would 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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

111

INDEPENDENT AUDITOR’S REPORT

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 2021 and of the

group’s profit 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.

We have audited the financial statements of 888 Holdings plc

(the ‘parent company’) and its subsidiaries (the ‘group’) for the

year ended 31 December 2021 which comprise:

GROUP PARENT COMPANY

Consolidated income

statement for the year ended

31 December 2021

Balance sheet as at 31

December 2021

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 2021

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 28 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 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. As disclosed in the company’s audit

committee report, we have obtained an exemption from the FRC

in respect of the non-audit services provided to the group in

2021, which exceeded the 70% non-audit services fee cap.

We confirm that there are appropriate safeguards in place

and that we remain independent.

Conclusions relating to going concern

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 were considered. We also understood the review controls

in place for the going concern model, for assessing forecasts

obtained from William Hill International (“WHI”) management

and management’s Board memoranda. Management

assessed the Group on a standalone basis and under an

acquisition case in which the WHI acquisition completes in

Q2 2022.

• 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 searched for sources of contradictory evidence in our

assessment of management’s forecasting, including assessing

historical budgeting accuracy and 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 have performed reverse stress testing in order to identify

what factors would lead to the Group utilising all liquidity

during the going concern period.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

112

• Assessing the appropriateness of the duration of the

going concern assessment period to 31 December 2023

and considering the existence of any significant events or

conditions beyond this period based on our procedures on the

Group’s business plan, cash flow forecasts and from knowledge

arising from other areas of the audit;

• We concluded that the disclosure in Note 2 and the Directors’

report appropriately sets out the risks and considerations used

to form the directors’ going concern conclusion in both the

standalone scenario and the acquisition scenario.

To address the impact of the acquisition of WHI we performed

procedures to understand changes in facts and circumstances

which may indicate material uncertainty in relation to the group

and parent company’s ability to continue as a going concern.

Specifically, we:

• Obtained and reviewed the historic proforma financial

information of the combined group, and the quantified

financial benefit statements of the merger performance.

• We obtained an understanding of the proposed financing

of the acquisition and Group structure post acquisition. The

acquisition will be fully debt funded, the facilities are agreed,

and the debt will contain no financial covenants other than

on a revolving credit facility which is not forecast to be drawn

upon.

• Compared cash on hand, and forecast cash generation, to

forecast liability settlement including committed dividends, to

assess liquidity risk.

• Obtained management’s going concern assessment, including

the cash flow forecast for the group, assuming the acquisition

of WHI in Q2 2022, for the going concern period which

extends to 31 December 2023. The Group has modelled a

number of adverse scenarios, individually and in aggregate,

in its cash forecast in order to incorporate unexpected

changes to the forecasted liquidity of the Group, including the

adverse impact of potential measures that may be imposed

following the UK Gambling Act review, the impact of regulatory

and legal actions, any legal settlements being higher than

expected, a further UK lockdown and a reduction in revenues

in both regulated and unregulated markets.

• We evaluated the potential impact of any contingencies,

including the likelihood of their occurrence. This included

obtaining and reviewing relevant legal advice, and indemnities

and warranties agreed as part of the transaction.

• We assessed the flexibility of the business model in the

acquisition case to respond to reduced revenues; performed

procedures to test the reasonableness of all key assumptions,

namely each revenue stream, gaming duties, marketing

expenses and overheads through reconciliation to the

budget approved by the Board and comparison with recent

performance, as well as their consistency with other areas of

the audit including impairment assessments, and the forecasts

prepared as part of the acquisition workstreams.

• Performed reverse stress testing in order to identify what

factors would lead to the Group utilising all liquidity during

the going concern period.

• We considered the achievability of planned synergies and

any incremental costs of executing the planned transaction.

Our key observations:

• On a standalone basis, the Group has no external debt, cash

net of customer deposits of US$174.5m as at 31 December

2021, generated cash from operating activities of US$133.2m

in the year ended 31 December 2021 and remains profitable,

cash generative and debt free throughout the going concern

period.

• In the acquisition case, the Group remains profitable, cash

generative and the loan and overdraft facilities secured for

the acquisition contain no financial covenants. The Group’s

exposure to certain legal and regulatory risks, particularly

those associated with the UK market, is increased. However,

even under adverse scenarios described above, the Group

maintains liquidity headroom throughout the going concern

period; and

Going concern has also been determined to be a key audit

matter.

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 31 December 2023.

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 two components,

one being a subsidiary in Israel and the

other being the remainder of the Group.

• The components where we performed full

audit procedures accounted for 100% of

Profit before tax, Revenue and Total assets.

Key audit

matters

• Regulatory and legal risks

• Revenue recognition

• Impairment of Bingo and US B2C cash

generating units

• Going concern

Materiality • Overall group materiality of US$5.15m,

which represents 5% of Profit before tax

adjusted for certain exceptional items,

including legal and professional costs for

the acquisition of William Hill International.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

113

INDEPENDENT AUDITOR’S REPORT cont.

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

such as recent Internal Audit results when assessing the level of

work to be performed at each entity.

The Group operates from a small number of locations and the

Group’s accounting is centrally managed. In assessing the risk

of material misstatement to the Group financial statements,

we determined that there were two components, one being a

subsidiary in Israel and the other being the remainder of the

Group.

We performed an audit of the complete financial information

of both of these components (“full scope”). The components we

audited therefore account for the entirety of the Group’s profit

before tax, revenue and total assets. This is consistent with our

approach in the prior year.

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.

The Israeli subsidiary was subject to a full scope audit of which

specific key areas were audited by a component team in Israel

and the remainder of the subsidiary was audited by the Group

audit team. The remainder of the Group was audited directly, as

a full scope audit, by the Group audit team.

Historically, the Group audit team performed the majority of its

audit fieldwork in Israel and to a lesser extent Gibraltar, including

auditing all of the significant judgements. Non-statutory and

statutory audit partners visited Israel at the year-end phase

of the audit. These visits involved conducting and reviewing

audit work performed by the Israel component audit team and

attending audit closing meetings.

In the current year, as in 2020, due to the COVID-19 pandemic,

travel to Israel was not possible during key audit phases. As a

result, the Group audit team performed the majority of its audit

fieldwork remotely from London and to a lesser extent from

Gibraltar, including auditing all of the significant judgements.

Non-statutory and statutory audit partners held virtual meetings

remotely with management based in UK, Gibraltar and Israel

throughout the audit. During these interactions they attended

audit closing meetings.

For the Israeli subsidiary, the Group audit team interacted with

the component audit team regularly during the various stages

of the audit, reviewed key working papers, participated in the

component audit team’s planning, including its discussion of

fraud and error and were responsible for the scope and direction

of the audit process. Due to travel restrictions, we were unable to

travel to Israel, hence the review of relevant audit work papers

was facilitated by the EY electronic audit file platform, screen

sharing or the provision of copies of work papers directly to the

Group audit team. We held regular video call meetings with the

component team. Given the nature of our engagement, some of

these measures had been implemented, albeit to a lesser extent,

in previous years, providing an appropriate base from which to

expand these forms of interactions and facilitate our oversight

of the component audit team. The allocation of responsibilities

between the Group audit team and the Israel component

team was such that the audit work on each of the areas of risk

described as ‘key audit matters’ was led by the Group audit

team. This gave us sufficient and appropriate evidence for our

opinion on the Group financial statements.

Climate change

There has been increasing interest from stakeholders as to how

climate change will impact companies. As an online business,

the Group’s activities have a relatively small impact on the

environment when compared to companies that operate in more

resource intensive industries. The Group has determined that

the most significant future impacts from climate change on its

operations will be from energy prices as the Group and global

economy transition to greener sources. These are explained on

page 39 in the required Task Force for Climate related Financial

Disclosures, which form part of the “Other information”, rather

than the audited financial statements. Our procedures on these

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. As disclosed in note 2 to the

financial statements, in the Group’s view climate change does

not represent a material estimation uncertainty.

Our audit effort in considering climate change was focused

on considering whether the effects of climate risks have

been appropriately reflected in asset values and associated

disclosures where values are determined through modelling

future cash flows, being the impairment tests of Bingo B2C 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.

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 and Accounts 2021

SECTION 3

Financial Statements

114

Risk Our response to the risk

Key observations communicated

to the audit committee

Regulatory and legal risks

At 31 December 2021, the Group

has provided US$25.7 million

(2020: US$19.3 million) in respect

of ongoing legal and regulatory

matters.

Refer to the significant accounting

policies (Note 2); and Notes 19 and

27 to the Consolidated Financial

Statements.

Given the industry and jurisdictions

in which the Group operates, as

described in the Principal Risks and

Uncertainties on page 70, there

is a risk that the Group operates

without the appropriate licences,

has existing licences adversely

affected, or is subject to regulatory

sanctions. 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 2021. Refer to the

Risk management strategy (on

page 50).

• Inquired of management and the Group’s external

legal advisers, where appropriate, about any known

instances of material breaches in regulatory or

licence compliance that need to be disclosed or

required provisions to be recorded.

• Inspected the Group’s correspondence with regulators

and tax authorities to identify any legal or regulatory

concerns and assess the completeness of matters

evaluated by the Group.

• In respect of the regulatory provisions, we discussed

any updates to the fact patterns with management

and the Group’s external legal advisors and read

their legal confirmations. We agreed provisions

to third party support, for example post year end

settlement agreements, and/or confirmation from the

Group’s external legal advisors that they consider the

quantum of the provisions for regulatory matters to be

reasonable.

• Discussed with management its interpretation and

application of relevant laws and regulations as well

as analysis of the risks in respect of the Group’s

operations in unregulated markets.

• Circularised confirmations to management’s

relevant external legal experts to inform us of any/

all outstanding legal or regulatory issues as at 31

December 2021.

• 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 and legal 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 the Annual

Report and Accounts by comparing the disclosures

against the requirements under International

Financial Reporting Standards and the Companies

Act of Gibraltar 2014.

• 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 are

appropriate.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

115

INDEPENDENT AUDITOR’S REPORT cont.

Risk Our response to the risk

Key observations communicated

to the audit committee

Revenue recognition

The Group recognised revenue of

US$980.1 million in 2021 (2020:

US$849.7 million).

The Group’s revenue recognition

process is highly dependent on

the Group systems, including

the Gaming servers and

Datawarehouse. Systematic errors

in calculations could result in

incorrect reporting of revenue.

The Group also makes a number of

judgements in recognising revenue,

principally in respect of whether

the Group is acting as a principal

or an agent with its B2B customers

and whether certain customer

prizes are treated as a deduction

from revenue or as a cost. Any

inappropriate judgements could

result in a material misstatement of

revenue and operating expenses.

There is a risk that management

may override controls to influence

the significant judgements in

respect of revenue recognition

leading revenue being overstated in

order to meet market expectations.

Refer to the significant accounting

policies (Note 2); and Note 3 to the

Consolidated Financial Statements.

• Inquired about the Group’s processes and related

controls in respect of revenue recognition and

obtained support to confirm our understanding. We

tested the design and operating effectiveness of key

applications and certain manual controls over the

Group’s principal gaming systems.

• We performed a correlation analysis between 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 the monthly reconciliation between the

Group’s gaming revenue, cash and customer

accounts.

• We performed procedures using “test accounts” in the

live gaming environment 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 and deposits/withdrawals.

• We read the Group’s contractual arrangements and

observed how they operate in practice to evaluate

management’s judgement as to whether the Group

was operating as a principal or an agent in its B2B

contracts with customers, in accordance with the

requirements of IFRS.

• We audited other material manual adjustments and

ensured the appropriate classification of prizes

within the income statement by testing a sample of

executed marketing Letters of Understanding.

• We assessed the appropriateness of the disclosures

in the Annual Report and Accounts by comparing

the disclosures against the requirements under

International Financial Reporting Standards and the

Companies Act of Gibraltar 2014.

• Based on our audit work we

conclude that the revenue

recognised is appropriate.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

116

Risk Our response to the risk

Key observations communicated

to the audit committee

Impairment of Bingo and US

B2C cash generating units

The Group has goodwill of

US$30.9m and intangible assets

of US$14.5m relating to US B2C,

arising from the acquisition in

December 2018.

The Group has goodwill of

US$50.0m relating to Bingo B2C,

arising from the acquisitions of

Globalcom (2007), Wink (2009)

and Jet (2019). Also included in the

carrying value of the Bingo B2C

cash generating unit are intangible

assets of US$11.2m (2020:

US$13.8m), the majority of which

relates to the value associated with

the Jet customer list.

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.

This risk is heightened in respect of

Bingo B2C due its potential sale.

Refer to the significant accounting

policies (Note 2); and Note 11

to the Consolidated Financial

Statements).

• We reviewed management’s assessment of indicators

of impairment by comparing it with other information

obtained during our audit and inquired further in

cases where the performance of certain products is

below management’s and external expectations.

• We read the guidance in IAS 36, and in respect of

Bingo B2C the guidance in IFRS 5 given its potential

sale, to determine that an appropriate valuation

method is value-in-use using cash flow projections

on an ongoing basis and also taking into account

the probability of the completion of the sale of the

Bingo business to create a risk weighted value in use

calculation of the cash generating unit.

• We assessed whether the allocation of goodwill to

CGUs was appropriate based on our understanding

of the business and guidance in IAS 36. In particular

with relation to US B2C, whether it continued to be

appropriate to treat the US as one CGU.

• We compared the model inputs to current trading

conditions and board approved forecasts 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 calculated by the Group.

• We challenged the assumptions used by management

by comparing to board approved budgets and

historically observed inputs, particularly in respect

of forecast growth rates, and in the case of US B2C

the duration of the forecast period. We challenged

these assumptions by performing sensitivity analysis

including on the 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.

• In respect of US B2C we corroborated assumptions to

third party data and assessed any evidence obtained

contra to management judgements. We noted that

the states which the Group is forecasting to enter

have either already regulated or are in the process of

regulating.

• In respect of Bingo B2C we obtained the signed

share purchase agreement as well as evidence of

the conditions precedent, being the completion of

a reorganisation of the Bingo business and that new

structure receiving its own UK licence. We assessed

management’s estimate of the probability of sale

through sensitivity analysis and by searching for

contra evidence to management’s ability to meet the

conditions precedent.

• We assessed the appropriateness of the disclosures

in the Annual Report and Accounts by comparing

the disclosures against the requirements under

International Financial Reporting Standards and the

Companies Act of Gibraltar 2014.

• Based on our audit work,

including the sensitivities

applied, we are satisfied that

that no impairment is required

at 31 December 2021.

• The recoverable amount of the

Bingo B2C CGU is supported

by accounting principles. The

disclosures are fair, balanced

and understandable in the

description of that recoverable

amount and that a future

impairment or loss on disposal

may arise in the event that the

sale completes.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

117

INDEPENDENT AUDITOR’S REPORT cont.

When determining Key Audit Matters we determine, from the

matters communicated with those charged with governance,

those matters that required significant auditor attention in

performing the audit. In making this determination, we take

into account the following:

a) Areas of higher assessed risk of material misstatement,

or significant risks identified in accordance with ISAs.

b) Significant auditor judgements relating to areas in the

financial statements that involved significant management

judgement, including accounting estimates that have been

identified as having high estimation uncertainty (i.e. higher

estimates or significant risk estimates)

c) The effect on the audit of significant events or transactions

that occurred during the period.

In the prior year, our auditor’s report included a key audit

matter in relation to taxation. In the current year, as a result

of settlement signed with the Israeli Tax Authorities in respect

of 2016-2020 the subjectivity and the related audit effort

associated with the tax position as at 31 December 2021 is

diminished. We consider that taxation is no longer a Key Audit

Matter.

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 US$5.15 million

(2020: US$4.25 million), which is 5% (2020: 3.8%) of profit

before tax adjusted for certain exceptional items including

legal and professional costs for the acquisition of William Hill

International. In the prior year we used profit before tax adjusted

for the impairment charge and normalised for the potential one-

off positive effect of the COVID-19 pandemic on earnings.

We believe that profit before tax adjusted for certain exceptional

items including legal and professional costs for the acquisition

of William Hill International provides us with a consistent year on

year basis for determining materiality and is the most relevant

performance measure to the stakeholders of the Group. The

increase from the prior year primarily reflects the continuation

of growth in Group revenue and the resulting impact on profit.

In the prior year we used professional judgement in normalising

materiality for the potential one-off positive effect of the

COVID-19 pandemic on earnings by setting materiality at 3.8% of

adjusted profit before tax. Materiality in current year reflects 5%

of adjusted profit before tax.

We determined materiality for the Parent Company to be

US$2.1 million (2020: US$1.9 million), which is 2% (2020: 2%)

of net assets.

Starting basis • Profit before tax of US$81.3 million

(2020: US$26.7 million)

Adjustments • Exceptional retroactive duties and

associated charges of US$5.8m

• Exceptional legal and professional costs

US$15.1m relating to the aquisition of

WHI

• (2020: Adjusted for the impairment

charge of US$79.9m)

Materiality • Materiality of US$5.15 million (2020:

US$4.25 million), representing 5% of the

adjusted materiality basis (2019: 3.8%)

During the course of our audit, we reassessed initial materiality

and downwardly revised our calculated amount following the

impact on profit of the closure of the Netherlands market in

September 2021.

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 75% (2020:

75%) of our planning materiality, namely US$3.9 million (2020:

US$3.1 million). We have set performance materiality at this

percentage due to our past experience of the audit, low number

of misstatements and overall effective internal controls.

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

performance materiality allocated to Israeli component was

US$1.7 million (2020: US$1.4 million). The audit work on the

remainder of the Group was undertaken using Group materiality.

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 US$257,000

(2020: US$213,000), 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 and Accounts 2021

SECTION 3

Financial Statements

118

Other information

The other information comprises the information included in

the annual report set out on pages 1 to 41, including Strategic

Report, the Directors’ Report and the Corporate Governance

Report set out on pages 64 and 72, 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 Strategic Report

and 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.

In our opinion, the part of the directors’ remuneration report to be

audited has been properly prepared in accordance with the Act.

Opinions on other matters as per the terms of our

engagement letter with the Company

In our opinion, based on the work undertaken in the course of the

audit:

• the information given in the strategic report and the directors’

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

applicable legal requirements;

• the information about internal control and risk management

systems in relation to financial reporting processes and about

share capital structures, given in compliance with rules 7.2.5

and 7.2.6 in the Disclosure Rules and Transparency Rules

sourcebook made by the Financial Conduct Authority (the

FCA Rules), is consistent with the financial statements and

has been prepared in accordance with applicable legal

requirements; and

• information about the company’s corporate governance

statement and practices and about its administrative,

management and supervisory bodies and their committees

complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.

Matters on which we are required to report

by exception as prescribed by the Gibraltar

Companies Act 2014

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; or

• there are material misstatements in the Directors’ Report

based on our knowledge and understanding of the Company

and its environment obtained in the course of the audit.

Matters on which we are required to report by

exception as per 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:

• the strategic report or the directors’ report; or

• the information about internal control and risk management

systems in relation to financial reporting processes and about

share capital structures, given in compliance with rules 7.2.5

and 7.2.6 of the FCA Rules.

We have nothing to report in respect of the following matters in

relation to which the Companies Act 2006 requires us to report

to you 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; or

• we have not received all the information and explanations we

require for our audit; or

• a Corporate Governance Statement has not been prepared

by the company.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

119

INDEPENDENT AUDITOR’S REPORT cont.

Corporate Governance Statement

We have reviewed 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 60;

• 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 60;

• 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 page 60;

• Directors’ statement on fair, balanced and understandable set

out on page 79;

• Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out on

page 70;

• The section of the annual report that describes the review

of effectiveness of risk management and internal control

systems set out on page 115; and

• The section describing the work of the audit committee set

out on page 104.

Responsibilities of directors

As explained more fully in the directors’ responsibilities

statement set out on pages 78 and 79, 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

and Germany and other countries, those related to relevant

tax compliance regulations in Gibraltar, Malta 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 counsel and tax advisors. 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).

• 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.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

120

• Based on this understanding we designed our audit

procedures to identify non-compliance with such laws and

regulations, including anti-money laundering. 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 enquires of the management and the Group’s

local legal counsel and tax advisors in Israel.

• In respect to the Israeli component, 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.

• The Group operates in the gaming industry which is a highly

regulated environment. 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.

• We designed our audit procedures to identify non-compliance

with such laws and regulations. Our procedures involved

discussions with management and external legal counsel

to assess and understand the implications on our audit

procedures. Our audit procedures in respect of the “Regulatory

and Legal risk” are described above in “Key audit matters”

section.

A further description of our responsibilities for the audit of the

financial statements is located on the Financial Reporting

Council’s website at 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 8 years, covering the years ending

31 December 2014 to 31 December 2021. Our audit

engagement letter was refreshed on 19 March 2020.

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 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 is made solely to the company’s members, as a body,

in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might

state to the company’s members those matters we are required

to state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the company and

the company’s members as a body, for our audit work, for this

report, or for the opinions we have formed.

MARCUS BUTLER ANGELIQUE LINARES

Non-Statutory Auditor Statutory Auditor

For and on behalf For and on behalf

of Ernst & Young LLP of EY Limited

London Registered Auditors

8 March 2022 Gibraltor

8 March 2022

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

121

Note

2021

US$ million

2020

US$ million

Revenue 3 980. 1 8 49.7

Gaming duties (184.0) (151.8)

Other cost of sales (158.4) (135. 1)

Cost of sales (342.4) (286.9)

Gross profit 6 3 7. 7 562.8

Marketing expenses (306.5) (237 .1)

Operating expenses (220.2) (214.7)

Exceptional items 5 (24. 0) (78.2)

Operating profit 4 87 .0 32.8

Adjusted EBITDA

165.0 155.6

Exceptional items 5 (24. 0) (78.2)

Foreign exchange differences

(9.3) —

Share benefit charge 23 (8.4) (11.0)

Depreciation and amortisation 11,12,13 (36.3) (33.6)

Operating profit 4 87 .0 32.8

Finance income 7 0 .1 0.1

Finance expenses 7 (5.8) (6. 1)

Share of post-tax loss of equity accounted associate 14 — (0. 1)

Profit before tax 81.3 26.7

Taxation 8 (12.4) (15.4)

Net profit for the year attributable to equity holders of the parent 68.9 11.3

Earnings per share 9

Basic 18.6¢ 3. 1¢

Diluted 18.3¢ 3.0¢

1 Adjusted EBITDA is an Alternative Performance Measures (“APMs”) which does not have an IFRS standardised meaning. The Group present Adjusted EBITDA since it is the

main measure the analyst community uses to evaluate the Company 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.

2 The foreign exchange gains and losses associated with operating activities had historically been immaterial and as such was presented as a Finance expense. In 2021

management decided that the loss will be correctly reclassified to be included in other cost of sales within operating profit.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

Note

2021

US$ million

2020

US$ million

Profit for the year 68.9 11.3

Items that may be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations 1.0 0. 8

Items that will not be reclassified to profit or loss

Remeasurement of severance pay liability, net of tax 6 2.9 (0 .3)

Revaluation of equity investment designated at fair value through OCI — (0.2)

Total other comprehensive income (expense) for the year 3.9 0. 3

Total comprehensive income for the year attributable to equity holders of the parent 72.8 11.7

The notes on pages 126 to 159 form part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

122

CONSOLIDATED BALANCE SHEET

AT 31 DECEMBER 2021

Note

2021

US$ million

2020

US$ million

Assets

Non-current assets

Goodwill and other intangible assets 11 167 .2 164.3

Right-of-use assets 13 25.3 28.5

Property, plant and equipment 12 12.6 15. 1

Non-current prepayments 17 7. 8 0. 6

Deferred tax assets 15 3.0 3.6

215.9 212. 1

Current assets

Cash and cash equivalents

1,2

16 255.6 222.2

Trade and other receivables

17 68.5 52.4

324. 1 27 4.6

Total assets 54 0.0 486.7

Equity and liabilities

Equity attributable to equity holders of the parent

Share capital 18 3.3 3.3

Share premium 18 3 .7 3 .7

Foreign currency translation reserve (0.3) (1.3)

Treasury shares 23 (1.3) (0.5)

Retained earnings 162.4 145.2

Total equity attributable to equity holders of the parent 167 .8 150.4

Non-controlling interests 0.1 —

167 .9 150.4

Liabilities

Non-Current liabilities

Severance pay liability 6 5 .0 7. 4

Deferred tax liability 15 2.6 3.3

Lease liabilities 20 24. 4 26.7

32.0 3 7. 4

Current liabilities

Trade and other payables 19 196. 1 177 .9

Provisions 19 25.7 19.3

Income tax payable 8 3 0.7 2 0.7

Lease liabilities 20 6.5 7. 0

Customer deposits 21 81.1 74 . 0

340. 1 298.9

Total equity and liabilities 54 0.0 486.7

1 Cash and cash equivalents includes on demand deposits held with PSPs of US$19.0 million at 31 December 2021. The rights and obligations relating to these deposit accounts

were reanalysed during 2021 and as a consequence this amount was corrected and re-classified from trade and other receivables to cash and cash equivalents. The

equivalent amounts for 31 December 2020 and for 1 January 2020 were restated, increasing cash and cash equivalents and reducing trade debtors by US$32.2 million and

US6.4 million, respectively.

2 Cash and cash equivalents excludes restricted short-term deposits of US$9 .5 million (31 December 2020: US$3.2 million).

The consolidated financial statements on pages 122 to 159 were approved and authorised for issue by the Board of Directors on

8 March 2022 and were signed on its behalf by:

ITAI PAZNER YARIV DAFNA

Chief Executive Officer Chief Financial Officer

The notes on pages 126 to 159 form part of these consolidated financial statements.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

123

capital

US$ million

premium

US$ million

Treasury

US$ million

Retained

earnings

US$ million

Foreign

currency

translation

reserve

US$ million

Non-

controlling

interests

US$ million

Total

US$ million

Balance at 1 January 2020 3.3 3 .7 (0.7) 160.5 (2. 1) — 164.7

Profit after tax for the year attributable

to equity holders of the parent — — — 11.3 — — 11.3

Other comprehensive expense for the year — — — (0.5) 0. 8 — 0. 3

Total comprehensive income — — — 10.8 0.8 — 11.6

Dividend paid (note 10) — — — (33.2) — — (33.2)

Equity settled share benefit charges (note 23) — — — 7. 6 — — 7. 6

Acquisition of treasury shares — — (0 .3) — — — (0.3)

Exercise of deferred share bonus plan — — 0. 5 (0.5) — — —

Balance at 31 December 2020 3.3 3 .7 (0 .5) 145.2 (1.3) — 150.4

Profit after tax for the year attributable to

equity holders of the parent — — — 68.9 — — 68.9

Other comprehensive (expense) income

for the year — — — 2.9 1.0 — 3.9

Total comprehensive income — — — 71.8 1 .0 — 72.8

Dividend paid (note 10) — — — (6 1.3) — — (6 1.3)

Equity settled share benefit charges (note 23) — — — 7. 1 — — 7.1

Acquisition of treasury shares — — (1. 1) — — — (1. 1)

Exercise of deferred share bonus plan — — 0.3 (0.3) — — —

Non-controlling interests — — — (0 . 1) — 0 .1 —

Balance at 31 December 2021 3.3 3.7 (1.3) 162.4 (0 .3) 0 .1 167 .9

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.

Retained earnings – represents the cumulative net gains and losses recognised in the consolidated statement of comprehensive

income and other transactions with equity holders.

Foreign currency translation reserve – represents exchange differences arising from the translation of all Group entities that have

functional currency different from US$.

The notes on pages 126 to 159 form part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

124

Note

2021

US$ million

2020

US$ million

Cash flows from operating activities

Profit before income tax 81.3 26.7

Adjustments for:

Depreciation of property plant and equipment and right-of-use assets 12,13 14.2 14.8

Amortisation 11 22. 1 18.8

Interest income 7 (0. 1) (0. 1)

Interest expenses 7 5.8 2 .7

Income tax paid (6.9) (6.5)

Share of post- tax loss of equity accounted associate — 0 .1

Non-cash exceptional items 5 13.7 78.2

Share benefit charges 23 8.4 11.0

Cash generated from operating activities before working capital movement 138.5 145.7

Decrease (increase) in trade receivables 3.3 (8.7)

Decrease (increase) in other receivables (26. 1) (3.3)

Increase in customer deposits 6.5 18. 0

Increase (decrease) in trade and other payables 4.6 44.1

Increase (decrease) in provisions 6.4 9. 2

Net cash generated from operating activities 133.2 205.0

Cash flows from investing activities

Acquisition of property, plant and equipment 12 (5.6) (10.6)

Proceeds from sale of investment in equity accounted associate 14 — 2.0

Interest received 7 0 .1 0.1

Acquisition of intangible assets 11 (2. 4) (4.5)

Internally generated intangible assets 11 (22.6) (17 .9)

Net cash used in investing activities (30.5) (30.9)

Cash flows from financing activities

Issue of shares to cover employee share schemes 18 — —

Payment of lease liabilities 20 (7 .2) (6.4)

Interest paid (0.7) (1.0)

Proceeds from loans, net of transaction fee 20 — 32.0

Repayment of loans 20 — (50. 0)

Acquisition of treasury shares 23 (1. 1) (0.3)

Dividends paid 10 (61.3) (33.2)

Net cash used in financing activities (70 .3) (58.9)

Net Increase (decrease) in cash and cash equivalents 32.4 115.2

Net foreign exchange difference 1.0 3 .7

Cash and cash equivalents at the beginning of the year

16 222.2 103.3

Cash and cash equivalents at the end of the year

16 255.6 222.2

1 Cash and cash equivalents includes on demand deposits held with PSPs of US$19.0 million at 31 December 2021 (31 December 2020: US$32.2 million). The rights and

obligations relating to these deposit accounts were reanalysed during 2021 and as a consequence this amount was corrected and re-classified from trade and other

receivables to cash and cash equivalents, the effect of which is to increase the 2020 net cash generated from operating activities by $25.8 million.

Trade and other payables include non-cash movement of US$3. 4 million related to remeasurement of severance pay scheme liability

(2020: US$2.9 million).

The notes on pages 126 to 159 form part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

125

1 General information

Company description and activities

888 Holdings Public Limited Company (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.

The Group is the owner of innovative proprietary software solutions providing a range of virtual online gaming services over

the internet, including Gaming and Betting. These services are provided to end users (“B2C”) and to business partners through

its business to business unit, Dragonfish (“B2B”). In addition, the Group provides payment services, customer support and

online advertising.

Definitions

In these financial statements:

The Company 888 Holdings Public Limited Company.

The Group 888 Holdings Public Limited Company 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.

2 Significant accounting policies

The significant accounting policies applied in the preparation of the consolidated financial statements are as follows:

2.1 Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with international accounting standards in

conformity with the requirements of the Gibraltar Companies Act 2014. The consolidated financial statements have been prepared

on a historical cost basis.

The consolidated financial statements are presented in US Dollars because that is the currency in which the Group primarily

operates. All values are rounded to the closest million except when otherwise indicated.

The consolidated financial statements comply with the Gibraltar Companies Act 2014.

The significant accounting policies applied in the consolidated financial statements in the prior year have been applied consistently

in these consolidated financial statements, with the exception of the amendments to accounting standards effective for the annual

periods beginning on 1 January 2021 and representation of expenses analysis in the income statement. These are described in more

detail below.

Going concern

The Directors have considered that the acquisition of William Hill International represents the most significant event impacting the

company in the period to 31 December 2023 (‘the going concern period’). In forming their view on the going concern of the Group,

the Directors have considered two scenarios, being where the acquisition does not proceed and the Group continues to operate as

in prior years (‘Standalone Scenario’) and the scenario where the acquisition proceeds as expected (‘Acquisition Scenario’).

Standalone scenario

The Directors have reviewed management’s detailed going concern review and analysis of the accounts. The standalone case

indicates that the Group will continue to have significant liquidity, and remain debt free, throughout the going concern period until

31 December 2023.

Downside sensitives have been run, individually and in aggregate to assess the impact of the following scenarios:

• The adverse impact of potential measures that may be imposed following the UK Gambling Act review; and

• Reductions in revenue for non-regulated and regulated markets of 10% and 5% respectively to reflect potential regulatory or

competitive pressures.

Group management have assumed variable cost savings proportional to the revenue reduction. Should more extreme downside

scenarios occur, appropriate mitigating actions that can be executed in the necessary timeframe could be taken such as reducing

operating costs and reduction or postponement of other discretionary expenditures and dividend suspension. Under a scenario

where the acquisition does not proceed as expected, contractual break costs do not significantly impact the liquidity assessment.

Trading during the financial year to date has been strong and in line with the second half of prior year. The Directors have also

considered the financial position of the existing Group, which is debt free, has cash and cash equivalents of US$174.5 million net

of customer balances at 31 December 2021, and remains cash generative over the going concern period in all scenarios.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

126

2 Significant accounting policies cont.

2.1 Basis of preparation cont.

Going concern cont.

Acquisition scenario

The Directors have specifically considered the impact of the potential acquisition on their going concern conclusion. The Directors

believe there is a sound strategic rationale for the acquisition to proceed and that the enlarged group will benefit from significant

operating efficiencies due to the complementary nature of the businesses.

The Directors have assumed the completion of the WHI acquisition in Q2 2022, with the acquisition having an enterprise value of

US$3.0 billion (£2.2 billion), including US$0.9 billion of existing WHI Bonds of which half are due for repayment in 2023 and half in

2026. The acquisition will be funded through US$2.9 billion of debt containing no financial covenants. The Group will also establish

a US$0.2 billion revolving credit facility, which is forecast to remain undrawn in the base case.

The Directors have given careful consideration to the regulatory and legal environment in which the enlarged Group will operate,

the potential for historical regulatory and legal exposures to crystalise or for other regulatory enforcement actions to be imposed.

Downside sensitives have been run, individually and in aggregate to assess the impact of the following scenarios:

• The adverse impact of potential measures that may be imposed following the UK Gambling Act review;

• A 2 month UK lockdown due to a resurgence of Covid, with the assumed impact of the closure of WHI retail partly offset by online;

• Regulatory and legal sanctions being higher or more restrictive than expected; and

• Reductions in revenue for non-regulated and regulated markets of 10% and 5% respectively to reflect potential regulatory or

competitive pressures.

In the sensitivity analysis, management have considered a further remote downside scenario where the William Hill online operations

are closed for a period of three months. In case of such an event, the Directors have considered the warranties and indemnities

agreed as part of the acquisition.

The Directors have carefully reviewed the legal form of the warranties and indemnities and assessed their impact on the remote

scenario.

Group management have also calculated mitigating cost savings that are implemented by reducing variable operating expenditure,

in line with the revenue reduction. Should more extreme downside scenarios occur, appropriate mitigating actions that can be

executed in the necessary timeframe could be taken such as reducing operating costs and a reduction or postponement of other

discretionary expenditures and dividend payments.

On the basis of the above considerations in both Standalone and Acquisition scenarios, the Directors have a reasonable expectation

that the Group will have adequate resources to continue in business for the period to 31 December 2023 and therefore continue to

adopt the going concern basis in preparing the financial statements.

2.2 New standards, interpretations and amendments adopted by the Group

Several new and amendments to existing International Financial Reporting Standards and interpretations, issued by the IASB, were

effective from 1 January 2021 and have been adopted by the Group during the period with no significant impact on the consolidated

results or financial position of the Group.

2.3 New standards that have not been adopted by the Group as they were not effective for the year:

Several new standards and amendments to existing International Financial Reporting Standards and interpretations, issued by the

IASB and adopted, or subject to endorsement, will be effective from 1 January 2022, 2023 and 2024 and have not been adopted

by the Group during the period. At this stage management are still assessing the full impact on the consolidated results or financial

position of the Group. None are expected to have a material impact on the consolidated financial statements in the period of initial

application.

Critical accounting estimates and judgements

The preparation of consolidated financial statements under IFRS requires the Group to make estimates and judgements that affect

the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical

experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.

Actual results may differ from these estimates.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

127

2 Significant accounting policies cont.

Critical accounting estimates and judgements cont.

Climate change is a global challenge and an emerging risk to businesses, people and the environment across the world. We

have a role to play in limiting warming by improving our energy management, reducing our carbon emissions and by helping our

customers do the same. Growing awareness of climate change and customer sustainability targets will provide impetus for business

growth as we provide products, services and solutions that increase efficiency and reduce customers’ energy use and carbon

emissions. As an online business, 888’s activities have a relatively small impact on the environment when compared to a great

number of companies that operate in more resource intensive industries. However, recognising that climate change poses a risk to

our business through global economic disruption and impacts on the welfare of our employees, we seek to integrate environmental

considerations into every level of decision-making from the administration of our offices to long-term business strategy. In our view

climate change doesn’t represent a material estimation uncertainty. For further detail see the corporate social responsibility section

of the Strategic Report.

Included in this note are accounting policies which cover areas that the Directors consider require estimates and assumptions which

have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities in the future. These policies

together with references to the related notes to the financial statements, which include further commentary on the nature of the

estimates and judgements made, can be found below:

Critical judgements

Revenue

The Group applies judgement in determining whether it is acting as a principal or an agent where it provides services to business

partners through its business to business unit (B2B). In making these judgements the Group considers, by examining each contract

with its business partners, which party controls the promised goods or services before their transfer to the customer. The Indicators

that the Group take into account in order to assess the control about 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.

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 11.

Goodwill

There is uncertainty over whether or not the bingo sale will complete in 2022 as completion of the transaction is conditional upon,

amongst other items, completion of a reorganisation of the bingo business and that new structure receiving its own UK Gambling

Commission (“UKGC”) licence. Therefore, the recoverable amount of the Bingo B2C CGU has been determined based on a value in

use calculation using cash flow projections on an ongoing basis and also taking into account the probability of the Bingo business

sale, as at 31 December 2021, completion to create a risk weighted value in use calculation of the cash generating unit. The resulting

valuation is above the carrying value and so the CGU has not been impaired however the carrying value exceeds the potential sales

price as disclosed further in note 11.

Exceptional items and adjusted performance measures

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 share benefit

charge, foreign exchange differences and share of post-tax loss of equity associates.

The Group also seeks to present a measure of underlying performance which is not impacted by exceptional items. The Group

considers any items of income and expense for classification as exceptional by virtue of their nature and size. The items classified

as exceptional (and are excluded from the adjusted measures) are described in further detail in note 5.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

128

2 Significant accounting policies cont.

Key accounting estimates

Taxation

Due to the international nature of the Group and the complexity of tax legislation in the jurisdictions in which it operates, the Group

applies judgements in estimating the likely outcome of tax matters and the resultant provision for income taxes. These judgements

are reassessed in each period until the outcome is finally determined through resolution with a tax authority or through a legal

process. Differences arising from changes in judgement or from final resolution may be material and will be charged or credited

to the Income statement in the relevant period.

The Group evaluates uncertain items, where the tax judgement is subject to interpretation and remains to be agreed with the

relevant tax authority. Provisions for uncertain items are made using judgement of the most likely tax expected to be paid, based on

a qualitative assessment of all relevant information. In assessing the appropriate provision for uncertain items, the Group considers

progress made in discussions with tax authorities and expert advice on the likely outcome and recent developments in case law,

legislation and guidance.

The Group believes that its accruals or, where applicable, provisions for tax liabilities are appropriate. For further information

see note 8.

Impairment of goodwill and other intangible assets

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 11.

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

regulatory matters, including gaming duties. Provisions are described in further detail in note 19 and contingent liabilities in note 27.

The Group operates in numerous jurisdictions. Accordingly, the Group files gaming tax returns, provides for and pays all gaming taxes

and duties it believes are due based on local tax laws and tax advice obtained. The Group is also periodically subject to audits and

assessments by local taxing authorities. Provisions for uncertain items are made using judgement of the most likely tax expected to

be paid and the basis thereon, based on a qualitative assessment of all relevant information. The Board considers that any exposure

for additional taxes, if any, that may arise from the final settlement of such assessments is unlikely to result in any further liability.

As part of the Board’s ongoing regulatory compliance and operational risk assessment process, it continues to monitor legal

and regulatory developments, and their potential impact on the business, and continues to take appropriate advice in respect of

these developments.

Given the nature of the legal and regulatory landscape of the industry, from time to time the Group has 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 has taken 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 19, these amounts are not material at 31 December 2021.

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. The subsidiaries are companies

controlled by 888 Holdings Public Limited Company. 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 and using consistent

accounting policies.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

129

2 Significant accounting policies cont.

Revenue

Revenue consists of income from online activities and income generated from foreign exchange commissions on customer deposit,

withdrawals and account fees, which is allocated to each reporting segment.

Casino, Bingo and Sport

The Group’s income earned from Casino and Bingo (Gaming) and Sports (Betting) is disclosed as revenue although these are

accounted for and meet the definition of a gain under IFRS 9.

For these revenue streams, revenue recognised includes gains and losses arising as a result of the outcome of an event which is

not controllable by the Group. The amount of the payment the Group may be obliged to pay to the customer is uncertain. The

transaction is therefore a derivative financial instrument, initially recognised at fair value and subsequently remeasured with changes

recorded in profit and loss.

The initial fair value is the amount staked by the customer and adjusted for the fair value of certain promotions and bonuses granted

to customers. This is subsequently remeasured when the result of the transaction is known, and the amount payable is confirmed.

This movement may be a gain or a loss which is offset on the basis that they arise from similar transactions.

Poker

Poker (Gaming) represents the commission (rake) charged from each poker hand in ring games and entry fees for participation in

Poker tournaments less the fair value of certain promotional bonuses and the value of loyalty points accrued. In Poker tournaments

certain promotional costs are accounted for, and entry fee revenue is recognised when the tournament has concluded. Poker revenue

is within the scope of IFRS 15 and recognised at an amount that reflects the consideration to which an entity expects to be entitled

in exchange for transferring goods or services to a customer.

B2B

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.

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 in

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 in 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.

Where the Group is considered to be the principal, income is recognised as the gross revenue generated from use of the Group’s

platform in online gaming activities with the partners’ share of the revenue charged to marketing expenses. In other cases, income

is recognised as the Group share of the net revenue generated from use of the Group’s platform.

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 staff costs and corporate professional expenses, both of which are recognised on an

accruals basis.

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 US$ 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).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

130

2 Significant accounting policies cont.

Taxation

The tax expense represents tax payable for the year based on currently applicable tax rates.

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from

its tax base. They are accounted for using the balance sheet liability method. Recognition of deferred tax assets is restricted to

those instances where it is probable that taxable profits will be available against which the difference can be utilised. Such assets

and liabilities are not recognised if the temporary differences arise 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.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance

sheet date and are expected to apply when the deferred tax liabilities/assets are settled/recovered.

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 are charged or credited to the consolidated income statement. In addition, the direct

costs of acquisition are charged immediately to the consolidated income statement.

Intangible assets

Acquired intangible assets

Intangible assets acquired separately consist mainly of software licences and domain names and are capitalised at cost. Those

acquired as part of a business combination are recognised separately from goodwill if the fair value can be measured reliably. These

intangible assets are amortised over the useful life of the assets, which for software licences is between one and five years and for

domain names is five years.

Internally generated intangible assets

Expenditure incurred on development activities of gaming platform 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, except for certain licence costs which are

amortised over either the life of the licence, or up to 20 years, whichever is the shorter period and the sports betting platform which

has an estimated useful economic live of 12 years.

Right-of-use assets

IFRS 16 requires lessees to recognise right-of-use assets and lease liabilities for most leases. A contract is (or contains) a lease if it

conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Right-of-use assets are initially measured at cost and depreciated by the earlier of the end of the useful life of the right-of-use

asset or the end of the lease term. The cost of right-of-use assets comprises of initial measurement of the lease liabilities, any lease

payments made before or at the commencement date and initial direct costs. Right-of-use assets are also subject for impairment

losses and adjusted for any remeasurement of lease liabilities.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the

assets, as follows:

Office lease 1-10 years

Motor vehicles 3 years

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:

IT equipment 33%

Office furniture and equipment 7-15%

Leasehold improvements Over the shorter of the term of the lease or useful lives

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

131

2 Significant accounting policies cont.

Impairment of non-financial assets

Impairment tests on goodwill are undertaken annually and where applicable an impairment loss is recognised immediately in

the consolidated income statement. Other non-financial assets are subject to impairment tests whenever events or changes in

circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its

recoverable amount (being the higher of value in use and fair value less costs to sell), the asset is written down accordingly through

the consolidated income statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset’s

cash generating unit (i.e. the smallest group of assets to which the asset belongs for which there are separately identifiable and

largely independent cash inflows).

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 25 and 26. 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 are available to

measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

The fair value measurement hierarchy is based on the inputs to valuation techniques used to measure fair value. The inputs are

categorised into three levels, with the highest level (level 1) given to inputs for which there are unadjusted quoted prices in active

markets for identical assets or liabilities and the lowest level (level 3) given to unobservable inputs. Level 2 inputs are directly or

indirectly observable inputs other than quoted prices.

Non-current assets held for sale and discontinued operations

The Group classifies non-current assets and disposal of an asset as held for sale if their carrying amounts will be recovered

principally through a sale transaction rather than through continuing use. Non-current assets and disposal of an asset classified as

held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental

costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.

The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset is available for

immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant

changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to

sell the asset and the sale expected to be completed within one year from the date of the classification.

Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit

or loss after tax from discontinued operations in the statement of profit or loss.

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 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

132

2 Significant accounting policies cont.

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 in employee benefits expense. 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 23. 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.

Defined contribution severance pay scheme

In 2017 the Group introduced 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.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to

control the use of an identified asset for a period of time in exchange for consideration.

Lease liabilities

Lease liabilities are recognised at the commencement date of the lease and measured at the present value of lease payments to

be made over the lease term.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date

if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is

increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease

liabilities is remeasured if there is a modification, a change in the lease term or a change in the lease payments (e.g., changes to

future payments resulting from a change in an index or rate used to determine such lease payments).

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

133

2 Significant accounting policies cont.

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.

3 Segment information

Segmental results are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The chief operating decision maker has been identified as the management team comprising mainly the Chief Executive Officer

and the Chief Financial Officer. The operating segments identified are:

• B2C (Business to Customer): including Gaming and Betting. Whilst B2C revenues had historically been further split out into the

component products of Casino, Poker, Sport and Bingo, the internal reporting has been updated to combine Casino, Poker and

Bingo revenues under one heading of Gaming and to change the name of Sport to Betting. The combination of revenues into

Gaming and the change of name from Sport to Betting better reflects how the business is managed and brings the business

in line with peer group of companies presentation.

• B2B (Business to Business): offering Total Gaming Services under the Dragonfish trading brand. Dragonfish offers to its business

partners use of technology, software, operations, E-payments and advanced marketing services, through the provision of offline/

online marketing, management of affiliates, search engine optimisation (SEO), customer relationship management (CRM) and

business analytics.

There has been no aggregation of these two operating segments for reporting purposes. The management team continues to assess

the performance of operating segments based on revenue and segment profit, being revenue net of chargebacks, payment service

providers’ commissions, gaming duties, royalties payable to third parties and marketing expenses.

B2C B2B Consolidated

2021

Gaming

US$ million

Betting

US$ million

Total B2C

US$ million US$ million US$ million

Segment revenue 814.5 127.4 941.9 38.2 980.1

Segment result

322.6 17.9 340.5

Unallocated corporate expenses

(229.5)

Exceptional items (24.0)

Operating profit 87.0

Finance income 0.1

Finance expenses (5.8)

Taxation (12.4)

Net profit for the year 68.9

Adjusted net profit for the year

101.3

Assets

Corporate assets 540.0

Total assets 540.0

Liabilities

Segment liabilities 79.8 1.3 81.1

Unallocated corporate liabilities 291.0

Total liabilities 372.1

1 Revenue net of chargebacks, payment service providers’ commissions, gaming duties, royalties payable to third parties, marketing expenses and foreign exchange differences.

2 Including staff costs, corporate professional expenses, other administrative expenses, depreciation, amortisation and share benefit charges.

3 As defined in note 9.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

134

3 Segment information cont.

B2C B2B Consolidated

2020

Gaming

US$ million

Betting

US$ million

Total B2C

US$ million US$ million US$ million

Segment revenue 692.2 122.1 814.3 35.4 849.7

Segment result

310.0 17.5 327.5

Unallocated corporate expenses

(216.5)

Exceptional items (53.3) (24.9) (78.2)

Operating profit 32.8

Finance income 0.1

Finance expenses (6.1)

Share of post-tax loss of equity accounted associate (0.1)

Taxation (15.4)

Net profit for the year 11.3

Adjusted net profit for the year

100.6

Assets

Corporate assets 486.7

Total assets 486.7

Liabilities

Segment liabilities 72.4 1.6 74.0

Unallocated corporate liabilities 262.3

Total liabilities 336.3

1 Revenue net of chargebacks, payment service providers’ commissions, gaming duties, royalties payable to third parties and Marketing expenses.

2 Including staff costs, corporate professional expenses, other administrative expenses, depreciation, amortisation and share benefit charges.

3 As defined in note 9.

Other than where amounts are allocated specifically to the B2C and B2B segments above, the expenses, assets and liabilities

relate jointly to all segments. These amounts are not discretely analysed between the two operating segments as any allocation

would be arbitrary.

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)

2021

US$ million

2020

US$ million

UK 388.9 333.5

Italy 118.3 86.5

EMEA (excluding the UK and Italy) 333.5 320.9

Americas 125.6 93.7

Rest of the world 13.8 15.1

Revenue 980.1 849.7

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

135

3 Segment information cont.

Non-current assets by geographical location

Carrying amount

of non-current assets

by location

2021

US$ million

2020

US$ million

Gibraltar 79.4 72.3

Americas 99.1 93.5

EMEA (except Gibraltar) 34.4 42.7

Total non-current assets by geographical location

212.9 208.5

1 Excludes deferred tax assets of US$3.0 million (2020: US$3.6 million).

4 Operating profit

Note

2021

US$ million

2020

US$ million

Operating profit is stated after charging:

Payment of service providers’ commissions 41.5 34.6

Gaming duties 184.0 151.8

Marketing expenses 306.5 237.1

Staff costs (including Executive Directors) 6 133.8 132.1

Fees payable to EY Limited, Ernst & Young LLP and its affiliates:

Statutory audit of the consolidated financial statements 0.9 0.9

Exceptional items 5 24.0 78.2

Depreciation (within operating expenses) 12,13 14.2 14.8

Amortisation (within operating expenses) 11 22.1 18.8

Auditor remuneration

2021

US$ million

2020

US$ million

Audit of Company 0.7 0.7

Audit of Group 0.2 0.2

Total fees for audit services 0.9 0.9

Audit related assurance services – half year review — —

Other assurance services 0.3 0.1

Total assurance services 0.3 0.1

Other non-audit services 2.3 —

Total fees for non-audit services 2.6 0.1

Total fees 3.5 1.0

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 US$3.5 million. Of this, US$2.4 million relates to fees payable at the end

of the year and are presented in the table above. Total fees for non-audit services represented 256% (2020: 14%) 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. The auditor provided no taxation services to the Group in 2021 (2020: US$nil).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

136

5 Exceptional items

The Group classifies certain items of income and expense as exceptional, as the Group considers that it allows for a further

understanding of the underlying financial performance of the Group. The Group considers any items of income and expense for

classification as exceptional by virtue of their nature and size.

2021

US$ million

2020

US$ million

Restructuring costs

3.1 —

Exceptional legal and professional costs

15.1 —

Retroactive duties and associated charges

5.9 —

Impairment charges

— 79.9

Other provisions

(0.1) (0.1)

Gain from the sale of equity accounted associate

— (1.6)

Total exceptional items

24.0 78.2

The Group paid US$10.3 million during 2021 in respect of exceptional items (2020: US$0.1 million).

1 Restructuring costs, comprises of US$2.6 million employees redundancy costs related to the Group’s decision to close its Antigua office, additional US$0.5 million relates to the

disposal of property, plant and equipment.

2 The Group incurred legal and professional M&A costs of US$15.1 million associated with the proposed acquisition of the international (non-US) business of William Hill.

3 The Group recorded an exceptional retroactive charge of US$5.9 million following a reassessment of potential gaming duties relating to activity in prior years.

4 The Group recognised impairment of Bingo Goodwill assets during 2020, as described in further detail in note 11.

5 Net change in provision in respect of exceptional matters and legacy customers’ activity prior periods.

6 On 22 June 2020, the Company sold its investment in Come2Play Limited, as a result the Company recorded a capital gain of US$1.6 million.

7 Tax effect of the exceptional items is US$3.5 million credit (2020: US$0.1 million tax credit).

6 Employee benefits

Staff costs, including Executive Directors’ remuneration, comprises the following elements:

2021

US$ million

2020

US$ million

Wages and salaries 138.8 133.5

Social security 7.5 7.8

Employee benefits and severance pay scheme costs 8.8 8.0

155.1 149.3

Staff costs capitalised in respect of internally generated intangible assets (21.3) (17.2)

133.8 132.1

In the consolidated income statement total staff costs, including share benefit charges of US$8.4 million (2020: US$11.0 million),

are included within the Operating expenses.

The average number of employees during the year was 1,759 (2020: 1,547).

At 31 December 2021 the Group employed 1,764 (2020: 1,669) staff.

At 31 December 2021 the Group used the services of 58 chat moderators (2020: 62) and 113 contractors (2020: 86).

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

137

6 Employee benefits cont.

Severance pay scheme –Israel

The Group has 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 US$2.1 million (2020: US$1.5 million).

The Group’s employees in Israel, which 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 2021 by a qualified independent actuary.

The following table summarises the employee benefits figures as included in the consolidated financial statements:

2021

US$ million

2020

US$ million

Included in the balance sheet:

Severance pay liability 5.0 7.4

Included in the income statement:

Current service costs (within Operating expenses) 3.2 3.1

Included in the statement of comprehensive income:

Loss on remeasurement of severance pay scheme liability (3.4) 0.3

Movement in severance pay scheme asset and liability:

Severance pay scheme assets

2021

US$ million

2020

US$ million

At beginning of year 24.6 21.8

Interest income 0.6 0.6

Contributions by the Group 2.6 2.7

Benefits paid (5.7) (1.6)

Return on assets less interest income already recorded 2.9 (0.6)

Exchange differences 0.7 1.7

At end of year 25.7 24.6

Severance pay plan liabilities

2021

US$ million

2020

US$ million

At beginning of year 32.0 27.8

Interest expense 0.8 0.8

Current service costs 3.2 3.1

Benefits paid (5.8) (1.7)

Actuarial gain on past experience 1.2 —

Actuarial loss on changes in financial assumptions (1.5) (0.2)

Exchange differences 0.8 2.2

At end of year 30.7 32.0

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

138

6 Employee benefits cont.

Severance pay scheme –Israel cont.

As at 31 December 2021 the net accounting deficit of the defined benefit severance pay plan was US$5.0 million

(2020: US$7.4 million). The Scheme is backed by substantial assets amounting to US$25.7 million at 31 December 2021

(2020: US$24.6 million). The net accounting deficit of defined benefit severance plan is a result of two elements:

• 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 2.93% in 2020 to 3.45% in 2021 resulted in a US$1.7 million decrease the plan liabilities.

• A further increase in the discount rate by 0.25% per annum (i.e. 3.45% to 3.7%) would increase the plan liabilities by US$0.8 million

(2020: US$0.8 million).

The impact of the severance deficit on the level of distributable reserves is monitored on an ongoing 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 and, therefore the

Group is unable to accurately disclose the proportions of the plan assets invested in each class of asset.

The expected contribution for 2022 is US$4.8 million.

The main actuarial assumptions used in determining the fair value of the Group’s severance pay plan are shown below:

2021

2020

Discount rate (nominal) 3.45 2.93

Estimated increase in employee benefits costs 5.14 5.14

Voluntary termination rate 75 75

Inflation rates based on Israeli bonds 2.54 1.53

Sensitivity of balance sheet at 31 December 2021

The results of the calculations are sensitive to the assumptions used. The balance sheet position revealed by IAS 19 calculations must

be expected to be volatile, 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 small changes in some of the assumptions. Where one

assumption has been changed all the other assumptions are kept as disclosed above.

Resulted

(surplus)/

deficit

US$ million

Change

from

disclosed

US$ million

Discount rate less 0.25% (5.8) (0.8)

Estimated increase in employee benefits costs plus 1% (7.9) (2.9)

Voluntary termination rate decrease 5% (5.2) (0.2)

Inflation rates up 0.25% (4.4) 0.6

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

139

7 Finance income and finance expenses

Finance income:

2021

US$ million

2020

US$ million

Interest income 0.1 0.1

Finance income 0.1 0.1

Finance expenses:

2021

US$ million

2020

US$ million

Foreign exchange losses — 3.4

Interest expenses related to lease liabilities 1.3 1.4

Interest expenses related to settlement of tax liability 3.8 —

Interest bearing credit facility — 1.1

Interest expenses related to severance pay liability, net 0.2 0.2

Other finance charges and fees 0.5 —

Finance expenses 5.8 6.1

8 Taxation

Corporate taxes

2021

US$ million

2020

US$ million

Current taxation

Gibraltar taxation 1.0 2.1

Other jurisdictions taxation 11.9 12.9

Adjustments in respect of prior years (0.2) 1.6

12.7 16.6

Deferred taxation

Origination and reversal of temporary differences (0.3) (1.2)

Taxation expense 12.4 15.4

Deferred taxation related to items recognised in OCI

Remeasurement of severance pay liability (0.3) (1.2)

The taxation expense for the year differs from the standard Gibraltar rate of tax. The differences are explained below:

2021

US$ million

2020

US$ million

Profit before taxation 81.3 26.7

Standard tax rate in Gibraltar (2021: 12.5%, 2020: 10%) 10.2 2.7

Higher effective tax rate on other jurisdictions 6.7 7.2

Expenses not allowed for taxation 1.1 8.3

Deferred tax (0.3) (1.2)

Capital allowances in excess of depreciation (2.1) (1.1)

Non-taxable income (3.0) (2.1)

Adjustments to prior years’ tax charges (0.2) 1.6

Total tax charge for the year 12.4 15.4

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

140

8 Taxation cont.

Corporate taxes cont.

Current tax is calculated with reference to the profit of the Company and its subsidiaries in their respective countries of operation.

Income tax payable as at 31 December 2021 is US$30.7 million (2020: US$20.7 million) which includes a settlement signed with the

Israeli Tax Authorities in respect of the years 2016-2020 and current tax charges from various jurisdictions. Set out below are details

in respect of the significant jurisdictions where the Group operates and the factors that influenced the current and deferred taxation

in those jurisdictions:

Gibraltar

Gibraltar companies are subject to a corporate tax rate of 12.5%, following an increase which came into effect on 1 August 2021.

Gibraltar corporate tax expenses for the year are lower compared to 2020, as a result of decrease in expenses not allowed for

taxation.

In January 2022, the parent company, 888 Holdings plc, moved its management and control, and as a result its tax residence,

to the UK.

Malta

Maltese companies are subject to a corporate tax rate of 35%, with an effective corporate tax rate of 5% achieved through a

shareholder tax refund system.

Israel

The domestic corporate tax rate in Israel in 2021 is 23% (2020: 23%). The Company’s Israeli subsidiary incurred higher tax expense

compared to 2020, as a result of a settlement signed with the Israeli Tax Authorities in respect of 2016-2020, on the basis of the

principles of which the tax basis for 2021 was also adjusted.

The Group’s subsidiary in the UK is subject to a corporate tax rate of 19% (2020: 19%). In March 2021, the UK government announced

an increase in the corporate tax rate to 25%, starting April 2023.

Romania

The Group’s subsidiary in Romania is subject to a corporate tax rate of 16% (2020: 16%).

The Group’s subsidiaries in the US are subject to a federal corporate tax rate of 21% (2020: 21%), in addition to state tax rate

ranging between 4.55% (Colorado) to 9% (New Jersey).

Sensitivity analysis

The key operating companies in the Group are incorporated, managed and controlled and tax resident mainly in Gibraltar,

with several operating companies tax residents in Malta. The Group’s subsidiaries are located in different jurisdictions and these

subsidiaries are taxed locally on their respective profits which are determined based on transfer pricing rules. An effective tax rate

increase of 1% would result in an increase in the tax charge (and associated provision) of US$0.8 million (2020: US$1.0 million).

9 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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

141

9 Earnings per share cont.

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. Certain equity instruments have been excluded

from the calculation of diluted EPS as their conditions of being issued were not deemed to satisfy the performance conditions at

the end of the period or it will not be advantageous for holders to exercise them into shares, in the case of options. The number of

equity instruments included in the diluted EPS calculation consist of 6,315,271 Ordinary Shares (2020: 7,460,665) and no market-value

options (2020: nil).

The number of equity instruments excluded from the diluted EPS calculation is 577,979 (2020: 964,207).

2021 2020

Profit for the period attributable to equity holders of the parent (US$ million) 68.9 11.3

Weighted average number of Ordinary Shares in issue and outstanding 371,383,109 368,587,941

Effect of dilutive Ordinary Shares and Share options 6,315,271 7,460,665

Weighted average number of dilutive Ordinary Shares 377,698,380 376,048,606

Basic earnings per share 18.6¢ 3.1¢

Diluted earnings per share 18.3¢ 3.0¢

Adjusted earnings per share

The Directors believe that EPS excluding exceptional items, share benefit charges, net gain from sale of investment in equity

accounted associate and share of post- tax loss of equity accounted associate (“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.

Reconciliation of profit to profit excluding exceptional items, share benefit charges, net gain from sale of investment in equity

accounted associate and share of post-tax loss of equity accounted associate (“Adjusted profit”):

2021

US$ million

2020

US$ million

Profit for the period attributable to equity holders of the parent 68.9 11.3

Exceptional items (see note 5) 24.0 78.2

Share benefit charges (see note 23) 8.4 11.0

Share of post-tax loss of equity accounted associate — 0.1

Adjusted profit 101.3 100.6

Weighted average number of Ordinary Shares in issue 371,383,109 368,587,941

Weighted average number of dilutive Ordinary Shares 377,698,380 376,048,606

Adjusted basic earnings per share 27.3¢ 27.3¢

Adjusted diluted earnings per share 26.8¢ 26.8¢

10 Dividends

2021

US$ million

2020

US$ million

Dividends paid 61.3 33.2

2020 final dividend of 10.4¢ per share plus an additional one-off 1.6¢ per share was paid on 24 May 2021 (US$44.5 million)

and the 2021 interim regular dividend of 4.5¢ per share in accordance with 888’s dividend policy was paid on 13 October 2021

(US$16.8 million).

The Board of Directors is not recommending a final dividend to be paid in respect of the year ended 31 December 2021, in light of

the potential capital requirements expected as part of the pending William Hill transaction. As a result, the total dividend for the

year is 4.5¢ per share (2020: 18.0¢ per share).

During 2020, the 2019 final dividend of 3.0¢ per share was paid on 22 May 2020 (US$11.1 million) and the 2020 interim regular

dividend of 3.2¢ per share plus an additional one-off 2.8¢ per share was paid on 4 November 2020 (US$22.1 million).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

142

11 Goodwill and other intangible assets

Goodwill

US$ million

Acquired

intangible

assets

US$ million

Internally

generated

intangible

assets

US$ million

Total

US$ million

Cost or valuation

At 1 January 2020 181.2 77.4 104.4 363.0

Additions — 4.7 17.9 22.6

Disposals — (2.2) — (2.2)

At 31 December 2020 181.2 79.9 122.3 383.4

Additions — 2.4 22.6 25.0

At 31 December 2021 181.2 82.3 144.9 408.4

Amortisation and impairments:

At 1 January 2020 20.7 29.2 72.7 122.6

Amortisation charge for the year — 8.7 10.1 18.8

Impairment charge for the year 79.3 — 0.6 79.9

Disposals — (2.2) — (2.2)

At 31 December 2020 100.0 35.7 83.4 219.1

Amortisation charge for the year — 10.2 11.9 22.1

At 31 December 2021 100.0 45.9 95.3 241.2

Carrying amounts

At 31 December 2021 81.2 36.4 49.6 167.2

At 31 December 2020 81.2 44.2 38.9 164.3

At 1 January 2020 160.5 48.2 31.7 240.4

Following a review of fully written down assets, assets no longer in use with a total cost and accumulated amortisation of

US$2.2 million were written off in 2020.

Acquired intangible assets

Acquired intangible assets includes:

The fair value of acquired intangible assets recognised in 2019 on the acquisition of Jet Bingo brands consisting of Customer list of

US$19.2 million and Brand name of US$2.3 million. The carrying value of the Customer list and Brand name for 31 December 2021 are

US$8.4 million and US$1.6 million, respectively.

The estimated remaining useful life of the Customer list and Brand name is 10 years (using the sliding scale method with 70% of the

value to be amortised over 5 years) and 8 years, respectively.

The fair Value of acquired intangible assets recognised on the acquisition of BetBright Sport platform consist of Sport platform of

US$18.3 million and the right to access third party customer list of US$0.8 million. The carrying value of the Sport platform and the

right to access third party customer list for 31 December 2021 are US$17.5 million and US$0.7 million, respectively.

The estimated remaining useful life of the Sport platform and right to access third party customer list is 11 years and 7 years,

respectively.

Internally generated intangible assets

This category of assets includes capitalised development costs in accordance with IAS 38. The material projects as included

within the carrying amount above include compliance with local regulatory requirements in certain jurisdictions US$13.5 million

(2020: US$5.5 million) and a major upgrade to the gaming systems platform US$36.0 million (2020: US$33.4 million). An impairment

of certain assets amounted to US$0.6 million was recognised during 2020, additional impairment charges were not considered to

be required at 31 December 2021 and the carrying value of internally generated intangible assets is considered to be appropriate.

At 31 December 2021 there were projects with carrying value US$12.2 million (2020: US$16.7 million) which were not completed and

therefore not being amortised. All of these projects are expected to complete and commence amortisation in 2022.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

143

11 Goodwill and other intangible assets cont.

Goodwill

Analysis of goodwill by cash generating units:

B2C B2B Consolidated

Bingo

US$ million

Other

US$ million

Bingo

US$ million

Total goodwill

US$ million

Carrying value at 1 January 2020 104.4 30.9 0.3 24.9 160.5

Impairment during 2020 (54.4) — — (24.9) (79.3)

Carrying value at 31 December 2020 50.0 30.9 0.3 — 81.2

Impairment during the year — — — — —

Carrying value at 31 December 2021 50.0 30.9 0.3 — 81.2

Impairment

In accordance with IAS 36 and the Group’s stated accounting policy an impairment test is carried out annually on the carrying

amounts of goodwill and a review for indicators of impairment is carried out for other non-current assets. Where an impairment test

was carried out, the carrying value is compared to the recoverable amount of the asset or the cash generating unit. In each case,

the recoverable amount was the value in use of the assets, which was determined by discounting the future cash flows of the relevant

asset or cash generating unit to their present value.

Goodwill and intangible assets –Bingo B2C and B2B business

Goodwill and intangible assets associated with the Bingo online business unit arose following the acquisition of the Bingo online

business of Globalcom Limited during 2007, the acquisition of the Wink Bingo business in 2009 and the acquisition of the Jet bingo

brands in 2019. The income streams generated from the Bingo online business, comprise the B2C Bingo cash generating unit and the

B2B cash generating unit.

During 2020, the Group recognised an impairment charge of US$54.4 million and US$24.9 million in respect of Bingo B2C and B2B

in the current year against goodwill. The impairment charge was recorded within exceptional items in the income statement.

On 15 December 2021, the Board of Directors announced its decision to sell its entire B2C and B2B bingo businesses for US$50

million. The Board considered that the Bingo business did not meet the criteria to be classified as held for sale at that date or

at 31 December 2021 because the business was not available for immediate sale and that completion of the sale required a

reorganisation of the Bingo business and that new structure receiving its own UK Gambling Commission (“UKGC”) licence.

At 31 December 2021, the granting of the licence and its timing was outside the control of the Directors. This licence was

subsequently granted on 2 March 2022 and the reorganisation of the Bingo business is currently in progress.

The Group tested the recoverable amount of the Bingo B2C CGU as at 31 December 2021, of US$64.3 million and compared it to the

carrying value of US$61.2 million consisting of US$50 million of Goodwill and $11.2 million of other intangible assets. The recoverable

amount has been determined based on a value in use calculation using cash flow projections on an ongoing basis and also taking

into account the probability of the Bingo business sale completion to create a risk weighted value in use calculation of the cash

generating unit. The carrying value exceeds sale price by US$11.2 million. Therefore, should the sale occur, a loss on disposal would

be recognised. Key assumptions in performing the value in use calculation are set out below.

Key assumptions and inputs used

Cash flow projections have been prepared for a five year period, following which a long-term growth rate has been assumed.

Underlying growth rates, as shown in the table below, have been applied to revenue and are based on past experience, including

the results in 2020 and 2021, projections of future changes in the UK online bingo gaming market and Group’s strategic decision to

increase its focus on other product and geographic opportunities. Key assumptions in preparing these cash flow projections include

1% short-term revenue growth rate, continued optimisation of costs per customer acquisition and the expectation that, should the

sale not occur, the Group will continue to operate and be subject to gaming duties in its core jurisdictions.

The pre-tax discount rate that is considered by the Directors to be appropriate is based on the Group’s specific Weighted Average

Cost of Capital, adjusted for tax, which is considered to be appropriate for the online Bingo B2C cash generating units.

Pre-tax

discount rate

applied

Underlying

growth rate

year 1

Underlying

short-term

growth rate

years 2-5

Long-term

growth rate

year 6+

Operating

expenses

increase

years 1-5

Operating

expenses

increase

year 6+

At 31 December 2021 10% 0% 1% 1.5% 1% 1.5%

At 31 December 2020 9% (8%) 0% 1.5% 0% 1.5%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

144

11 Goodwill and other intangible assets cont.

Key assumptions and inputs used cont.

The calculation of value in use for Bingo B2C unit resulted in a low level of headroom compared to the carrying value of assets.

The calculation is particularly sensitive to the following assumptions:

(i) Revenue growth rate assumptions – Growth rates are based on past experience and projections of future changes in the

online gaming market, the continued highly competitive UK Bingo market as well as the enhanced regulation in the UK market

coupled with Group’s strategic decision to reduce focus on Bingo business and increase focus on other product and geographic

opportunities. A reduction of the long-term growth rate to 0% for Bingo B2C would result in an impairment of US$1.1 million.

(ii) Cash flow forecast – cash flow projections may be affected by changes in the UK gaming market including the continued

macroeconomic influence of the COVID-19 pandemic. A reduction of 10% in the cash flow projections for B2C would result

in an impairment of US$1.2 million.

(iii) Discount rate – The pre-tax discount rate is recalculated by taking into account prevailing risk free rates, equity risk premium

and company beta and having regard to external data commenting upon the Weighted Average Cost of Capital applied

to the Group. An increase of 1% in discount rates applied for B2C would result in an impairment of US$1.8 million.

Goodwill and intangible assets –US

Goodwill and intangible assets associated with the acquisition of the remaining 53% interest in the voting shares of AAPN in

December 2018 amount to US$30.9 million and US$5.6 million, respectively. The carrying value of internally generated intangible

assets related to the US CGU amounted to US$8.6 million. The recognised goodwill and intangible assets represents the potential

revenues from the US, which the Group considers as a single CGU, as the states regulate online gambling and reflects potentially

significant opportunities in the US to create additional value for the Group.

The Group tested the recoverable amount of the US CGU as at 31 December 2021. The recoverable amount has been determined

based on a value in use calculation using cash flow projections.

Key assumptions and inputs used

Given the early stage of market development, cash flow projections have been prepared for a nine-year period, following which

a 2% long-term growth rate has been assumed based on the long-term GDP growth rate of the states. Underlying growth rates have

been applied to revenue and are based on past experience of the Group, including market share forecast for each relevant state.

Key assumptions in preparing these cash flow projections include market share assumptions based on current 888 market share

in other regulated online gaming jurisdictions, 13% pre-tax discount rate and the expectation that the Group will continue to operate

in the US and launch in further states as regulation develops. The states which the Group are forecasted to enter have either already

regulated or are in the process of regulating.

The pre-tax discount rate that is considered by the Directors to be appropriate is the Group’s specific Weighted Average Cost

of Capital, adjusted for tax, and including an addition risk premium which is considered to be appropriate for the US B2C cash

generating unit.

The calculation of value in use for US B2C is most sensitive to the following assumptions:

(i) Market share assumptions –A reduction of 5% in market share assumptions for each state would result in zero headroom

for US B2C value in use.

(ii) Pre-tax discount rate – An increase of Pre-tax discount rate from 13% to 14% would result in zero headroom for US B2C value

in use.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

145

12 Property, plant and equipment

IT equipment

US$ million

Office

furniture and

equipment

US$ million

Leasehold

improvements

US$ million

Total

US$ million

Cost

At 1 January 2020 54.4 6.3 16.3 77.0

Additions 8.2 0.7 1.7 10.6

Disposals (9.0) (0.3) — (9.3)

At 31 December 2020 53.6 6.7 18.0 78.3

Additions 4.8 0.2 0.6 5.6

Disposals (16.4) (0.5) (0.4) (17.3)

At 31 December 2021 42.0 6.4 18.2 66.6

Accumulated depreciation

At 1 January 2020 45.1 4.6 14.3 64.0

Charge for the year 7.6 0.5 0.4 8.5

Disposals (9.0) (0.3) — (9.3)

At 31 December 2020 43.7 4.8 14.7 63.2

Charge for the year 6.6 0.4 0.6 7.6

Disposals (16.2) (0.4) (0.2) (16.8)

At 31 December 2021 34.1 4.8 15.1 54.0

Carrying amounts

At 31 December 2021 7.9 1.6 3.1 12.6

At 31 December 2020 9.9 1.9 3.3 15.1

At 1 January 2020 9.3 1.7 2.0 13.0

Following a review of fully written down assets in 2021, assets no longer in use with a total cost and accumulated depreciation

of US$16.3 million (2020: US$9.3 million) were written off. Additional US$0.5 million relates to the disposal of property, plant and

equipment in connection with the Group’s decision to close its Antigua office.

13 Leases

IFRS 16 requires lessees to recognise right-of-use assets and lease liabilities for most leases. A contract is (or contains) a lease if it

conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Right-of-use assets are initially measured at cost and depreciated by the earlier of the end of the useful life of the right-of-use

asset or the end of the lease term. The cost of right-of-use assets comprises of initial measurement of the lease liabilities, any lease

payments made before or at the commencement date and initial direct costs. Right-of-use assets are also subject for impairment

losses and adjusted for any remeasurement of lease liabilities.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date and

subsequently measured at amortised cost with the interest expense recognised within finance income (expense) in the consolidated

statement of income. For further information see note 20.

Leases are mainly comprised of offices in the period between one to ten years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

146

13 Leases cont.

Right-of-use assets

Right-of-use

assets

US$ million

Cost

At 1 January 2020 39.4

Additions 1.5

At 31 December 2020 40.9

Additions 3.4

Disposals (2.3)

At 31 December 2021 42.0

Accumulated depreciation

At 1 January 2020 6.1

Depreciation 6.3

At 31 December 2020 12.4

Depreciation 6.6

Disposals (2.3)

At 31 December 2021 16.7

Carrying amounts

At 31 December 2021 25.3

At 31 December 2020 28.5

At 1 January 2020 33.3

14 Investments

Investments in associate

On 15 April 2015 the Group acquired 20% of the Ordinary Shares of Come2Play Limited for a cash payment of US$1.5 million. On

22 June 2020, the Company sold its investment in Come2Play Limited for a consideration of US$2.4 million, of which US$2.0 million

received in 2020 and US$0.4 million received in 2021. The carrying value of the investment at the date of the sale was $0.5 million,

as a result the Company recorded a gain of US$1.6 million in 2020.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

147

15 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. 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:

2021

US$ million

2020

US$ million

Deferred tax relates to the following:

Accrued severance pay 1.2 1.7

Vacation pay and employment related accrual 0.7 0.7

Property, plant and equipment 2.1 1.4

Intangible assets (3.6) (3.5)

0.4 0.3

Reflected in the statement of financial position as follows:

Deferred tax assets 3.0 3.6

Deferred tax liabilities (2.6) (3.3)

The Group did not record deferred taxes on US$16 million taxable losses of its US subsidiaries due to uncertainty of utilisation of those

losses. These taxable losses do not have expiry date. The Group did not have taxable losses in other subsidiaries at 31 December 2021

(2020: nil) that are available indefinitely for offset against future taxable profits of the companies in which the losses arose.

16 Cash and cash equivalents

2021

US$ million

2020

US$ million

Cash and short-term deposits 174.5 148.2

Customer funds 81.1 74.0

255.6 222.2

Cash and cash equivalents include on demand deposits held with PSPs of US$19.0 million at 31 December 2021 (31 December 2020:

US$32.2 million). The rights and obligations relating to demand deposits previously presented as trade receivables were re-analysed

and as a consequence, as at 31 December 2020 an amount of US$32.2 million has been reclassified from trade receivables to cash

and cash equivalents.

Customer funds represent bank deposits matched by liabilities to customers and progressive prize pools of an equal value

(see note 21).

17 Trade and other receivables

2021

US$ million

2020

US$ million

Trade receivables 25.9 29.1

Other receivables 15.3 13.0

Prepayments 17.8 7.1

Restricted short-term deposits 9.5 3.2

Current trade and other receivables 68.5 52.4

Non-current prepayments 7.8 0.6

76.3 53.0

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 25 provides credit risk disclosures on trade and other receivables.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

148

18 Share capital

Share capital comprises the following:

Authorised

31 December

2021

Number

31 December

2020

Number

31 December

2021

US$ million

31 December

2020

US$ million

Ordinary Shares of £0.005 each 1,026,387,500

1,026,387,500 8.1 8.1

1 including 307,422 treasury shares held by the Group as at 31 December 2021 (2020: 196,488).

Allotted, called up and fully paid

31 December

2021

Number

31 December

2020

Number

31 December

2021

US$ million

31 December

2020

US$ million

Ordinary Shares of £0.005 each at beginning of year 369,017,422 368,347,794 3.3 3.3

Issue of Ordinary Shares of £0.005 each 3,741,780 669,628 — —

Ordinary Shares of £0.005 each at end of year 372,759,202 369,017,422 3.3 3.3

The narrative below includes details on issue of Ordinary Shares of £0.005 each as part of the Group’s employee share option plan

(see note 23) during 2021 and 2020:

During 2021, the Company issued 3,741,780 shares (2020: 669,628) out of which nil shares (2020: nil) were issued in respect of

employees’ exercising market value options giving rise to an increase in share premium of nil (2020: nil).

Shares issued are converted into US$ at the exchange rate prevailing on the date of issue. The issued and fully paid share capital

of the Group amounts to US$3.3 million (2020: US$3.3 million) and is split into 372,759,202 (2020: 369,017,422) Ordinary Shares.

The share capital in UK sterling (GBP) is £1.9 million (2020: £1.8 million).

19 Trade, other payables and provisions

2021

US$ million

2020

US$ million

Trade payables 36.2 26.3

Accrued expenses 118.3 108.4

Other payables 41.6 43.2

Total trade and other payables 196.1 177.9

Provisions 25.7 19.3

221.8 197.2

The carrying value of trade and other payables approximates to their fair value given the short maturity date of these balances.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

149

19 Trade, other payables and provisions cont.

Provisions

The Group has recorded a provision in respect of legal and regulatory matters and update it to reflect the Group’s revised

assessment of these risks in light of developments arising during 2020 and 2021 including with regard to customer claims and other

legal and regulatory risks. This amount represents management’s best estimate of probable cash outflows related to these matters,

which are closely monitored by the Group. The timing and amount of these outflows is ultimately determined by the settlement

reached with the relevant authority but would generally be resolved within 24 months of the balance sheet date.

Movement in the provision during the year is as follows:

Total

US$ million

At 1 January 2020 10.2

Paid during the year (0.1)

Arising during the period 12.0

Released to income statement during the period (2.8)

At 1 January 2021 19.3

Paid during the year (2.7)

Arising during the period 11.0

Foreign exchange differences (0.6)

Released to income statement during the period (1.3)

At 31 December 2021 25.7

Current 25.7

Non-current —

The Group has recorded a provision in respect of legal and regulatory matters and update it to reflect the Group’s revised

assessment of these risks in light of developments arising during 2020 and 2021 including with regard to customer claims and other

legal and regulatory risks. This amount represents management’s best estimate of probable cash outflows related to these matters,

which are closely monitored by the Group. Provisions include US$12.7 million relating to a sanction from the UKGC for which an

outflow is expected in March 2022. The timing and amount of other outflows is ultimately determined by the settlement reached with

the relevant authority but would generally be resolved within 24 months of the balance sheet date.

20 Lease liabilities

Lease

liabilities

US$ million

At 1 January 2020 34.8

Arising during the period 1.6

Paid during the period (6.4)

Interest expenses 1.4

Interest paid —

Exchange rate 2.3

At 31 December 2020

33.7

Arising during the period 3.4

Paid during the period (7.2)

Interest expenses 1.3

Exchange rate (0.3)

At 31 December 2021

30.9

Current 6.5

Non-current 24.4

1 Discounted using a weighted average incremental borrowing rate of 4.2%.

Further information in respect of right of use assets in note 13 and contractual maturity analysis of lease liabilities in note 25.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

150

21 Customer deposits

2021

US$ million

2020

US$ million

Liabilities to customers 74.4 68.0

Progressive prize pools 6.7 6.0

81.1 74.0

22 Investments in significant subsidiaries

The consolidated financial statements include the following principal subsidiaries of 888 Holdings plc:

Name

Country of

incorporation

Percentage

of equity

interest

2021

Percentage

of equity

interest

2020 Nature of business

VHL Financing Limited Gibraltar 100 100 Holding company

VHL Financing (Malta) Limited Malta 100 100 Holding company

Virtual Global Digital Services Limited Gibraltar 100 100 Holder of gaming licences in Gibraltar

VDSL (International) Ltd Gibraltar 100 N/A Holder of gaming licences in Gibraltar

Virtual Digital Services Limited Malta 100 100 Holder of gaming licences in Malta

for European markets which are not

locally regulated

Brigend Limited Gibraltar 100 100 Bingo B2B business operator

Fordart Limited Gibraltar 100 100 B2B business operator (except Bingo)

888 UK Limited Gibraltar 100 100 Holder of UK remote gaming licence

888 Italia Limited Malta 100 100 Holder of Italian online gaming licence

888 Online Games España S.A. Ceuta, Spain 100 100 Holder of Spanish online gaming licence

888 US Limited Gibraltar 100 100 Licensed service provider to US

licenced entities

888 Atlantic Limited Gibraltar 100 100 Licensed service provider to US licensed

entities

888 Liberty Limited Gibraltar 100 100 Holder of Gaming Vendor Licence in the

state of Delaware

888 Romania Limited Malta 100 100 Holder of Romanian online gaming

licence

888 (Ireland) Limited Malta 100 100 Holder of Irish online betting licence

888 Denmark Limited Malta 100 100 Holder of Danish online gaming licence

888 Portugal Limited Malta 100 100 Holder of Portuguese online

gaming licence

888 Sweden Limited Malta 100 100 Holder of Swedish online gaming licence

888 Germany Limited Malta 100 100 Holder of German online gaming licence

888 Netherlands Ltd Malta 100 100 Applicant for Netherlands licence

Virtual Emerging Entertainment Limited Gibraltar 100 100 Trademark licensor

Gisland Limited Gibraltar 100 100 Payment transmission

Virtual IP Assets Limited Antigua 100 100 Holder of group IP assets

Virtual Marketing Services (Gibraltar)

Limited

Gibraltar 100 100 Marketing acquisition

Virtual Marketing Services (UK) Limited UK 100 100 Advertising services

888 US Services Inc. New Jersey, USA 100 100 Provider of US-based services for

US operations

Random Logic Limited Israel 100 100 Research, development and

marketing support

Random Logic Ventures Limited Israel 100 100 Investment holding company

Sparkware Technologies SRL Romania 100 100 Software development

Virtual Internet Services Limited Gibraltar 100 100 Data hosting and development services

Virtual Share Services Limited Gibraltar 100 100 Administration of employee

equity schemes

Spectate Limited Ireland 100 100 Software and service provider

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

151

Name

Country of

incorporation

Percentage

of equity

interest

2021

Percentage

of equity

interest

2020 Nature of business

888 US Inc. Delaware, USA 100 100 Holding company

888 US Holdings Inc. Delaware, USA 100 100 Holding company

AAPN Holdings, LLC Delaware, USA 100 100 Holding company

AAPN New Jersey LLC New Jersey, USA 100 100 Holder of Casino Service Industry

Enterprise licence in New Jersey

VHL America, LLC Delaware, USA 95.01 100 Holding company

VHL Colorado, LLC Colorado, USA 95.01 100 Colorado Internet Sports Betting

Operator licence holder

VHL Indiana, LLC Indiana, USA 95.01 100 Indiana licence applicant

VHL Iowa, LLC Iowa, USA 95.01 100 Iowa licence applicant

VHL Maryland, LLC Maryland, USA 85.53 N /A Maryland licence applicant

VHL Ohio, LLC Ohio, USA 95.01 N/A Ohio licence applicant

VHL New Jersey, LLC New Jersey, USA 95.01 N/A New Jersey licence applicant

VHL Louisiana, LLC Louisiana, USA 95.01 N/A Louisiana licence applicant

VHL Virginia, LLC Virginia, USA 85.53 N/A Virginia licence applicant

VHL Missouri, LLC Missouri, USA 95.01 N/A Missouri licence applicant

VHL Ontario Ltd Gibraltar 95.01 N/A Ontario licence applicant

23 Share benefit charges

Equity-settled share benefit charges

As at 31 December 2021 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.

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)

2021

Number

2020

Number

Outstanding future vesting equity awards at the beginning of the year 5,541,569 1,911,982

Future vesting equity awards granted during the year 2,801,667 4,075,732

Future vesting equity awards lapsed during the year (286,830) (146,611)

Shares issued upon vesting during the year (2,609,986) (299,534)

Outstanding future vesting equity awards at the end of the year 5,446,420 5,541,569

Averaged remaining life until vesting 1.68 years 1.15 years

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

22 Investments in significant subsidiaries cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

152

23 Share benefit charges cont.

Deferred Share Bonus Plan

2021

Number

2020

Number

Outstanding future vesting equity awards at the beginning of the year 196,488 201,947

Future vesting equity awards granted during the year 220,225 130,796

Shares exercised during the year (109,291) (136,255)

Outstanding future vesting equity awards at the end of the year 307,422 196,488

Averaged remaining life until vesting 0.62 years 0.93 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) 2 April 2021 to the Operational Management (150,560 Shares),

(ii) 18 March 2021 to the CEO (63,735 Shares) and the CFO (5,930 Shares),

(iii) 16 April 2020 to the CEO (21,544 Shares), the then CFO (42,368 Shares) and former CEO (66,884 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 2021:

(i) 22 March 2021, the Group purchased 220,225 shares on the open market at an average price of 362.0¢ per share,

(ii) 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 exercised during the year.

Ordinary shares granted (subject to performance conditions)

2021

Number

2020

Number

Outstanding at the beginning of the year 3,936,354 4,172,249

Shares granted during the year 530,976 973,563

Lapsed future vesting shares (127,152) (839,364)

Shares issued during the year (1,131,794) (370,094)

Outstanding at the end of the year 3,208,384 3,936,354

Averaged remaining life until vesting 0.84 years 1.13 years

Shares granted during the year 530,976 (2020: 973,563). The share price at the grant date was £3.49. Shares outstanding at the

end of the year consist of (i) 1,429,308 shares subject to 50% EPS growth target, and 50% total shareholder return (TSR) compared

to a peer group of companies (ii) 1,779,076 shares are 100% dependent on 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: 2021 2020

Share pricing model used Monte Carlo Monte Carlo

Determined fair value £2.45 £0.86

Number of shares granted 265,488 449,166

Average risk-free interest rate 0.1% 0.05%

Average standard deviation 46% 42%

Average standard deviation of peer group 48% 45%

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

153

23 Share benefit charges cont.

Valuation information – shares granted

2021 2020

Without

performance

conditions

With

performance

conditions

Without

performance

conditions

With

performance

conditions

Weighted average share price at grant date £3.67 £3.49 £1.33 £1.30

Weighted average share price at issue of shares £3.69 £3.53 £2.54 £1.29

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

2021

US$ million

2020

US$ million

Equity-settled charge for the year 7.1 7.6

Cash-settled charge for the year 1.3 3.4

Total share benefit charges 8.4 11.0

24 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, are set out below:

2021

US$ million

2020

US$ million

Short-term benefits 4.9 4.6

Post-employment benefits 0.2 0.2

Share benefit charges – equity-settled 1.4 2.1

6.5 6.9

Further details on Directors’ remuneration are given in the Directors’ Remuneration Report.

25 Financial risk management

The Group is exposed through its operations to risks that arise from use of its financial instruments. Policies and procedures for

managing these risks are set by the Board following recommendations from the Chief Financial Officer. The Board reviews the

effectiveness of these procedures and, if required, approves specific policies and procedures in order to mitigate these risks.

The main financial instruments used by the Group, on which financial risk arises, are as follows:

• Cash and cash equivalents;

• Trade and other receivables;

• Trade and other payables;

• Customer deposits;

• Lease liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

154

25 Financial risk management cont.

Detailed analysis of these financial instruments is as follows:

Financial assets

2021

US$ million

2020

US$ million

Trade and other receivables

(note 17) 50.7 45.3

Cash and cash equivalents (note 16) 255.6 222.2

306.3 267.5

1 Excludes prepayments and non-current other receivables.

2 On-demand deposits amount to US$32.2 million previously presented as trade receivables were reclassified to cash and cash equivalents.

Trade and other receivables and cash and cash equivalents are classified as financial assets at amortised costs.

Financial liabilities

2021

US$ million

2020

US$ million

Trade and other payables

(note 19) 172.0 140.2

Customer deposits (note 21) 81.1 74.0

Lease liabilities – IFRS 16 (note 20) 30.9 33.7

284.0 247.9

1 Excludes taxes payable.

All financial liabilities are held at amortised cost.

Capital

The capital employed by the Group is composed of equity attributable to shareholders. The primary objective of the Group is

maximising shareholders’ value, which, from the capital perspective, is achieved by maintaining the capital structure most suited to

the Group’s size, strategy, and underlying business risk. There are no demands or restrictions on the Group’s capital.

The main financial risk areas are as follows:

Credit risk

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.

• 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 year end amounting to US$0.5 million arising from a PSP failing to

discharge its obligation (2020: US$0.6 million). 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 2021 was

US$1.5 million (2020: US$1.5 million).

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.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

155

25 Financial risk management cont.

Credit risk cont.

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.

Customer funds

Customer funds are matched by customer liabilities and progressive prize pools of an equal value.

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 US$306.3 million (2020:

US$267.5 million).

Liquidity risk

Liquidity risk exists where the Group might encounter difficulties in meeting its financial obligations as they become due. The Group

monitors its liquidity in order to ensure that sufficient liquid resources are available to allow it to meet its obligations.

The following table details the contractual maturity analysis of the Group’s financial liabilities (undiscounted payments):

2021

demand

US$ million

3 months

US$ million

Between

3 months

and 1 year

US$ million

Year 2

US$ million

Year 3

US$ million

Year 4

US$ million

Year 5

US$ million

More than

5 years

US$ million

Total

US$ million

Trade and other

payables

3.2 104.1 64.7 — — — — — 172.0

Customer deposits 81.1 — — — — — — — 81.1

Lease liabilities — 1.8 4.9 5.8 5.6 5.5 5.5 5.3 34.4

84.3 105.9 69.6 5.8 5.6 5.5 5.5 5.3 287.5

1 Excludes taxes payable.

2020

demand

US$ million

3 months

US$ million

Between

3 months

and 1 year

US$ million

Year 2

US$ million

Year 3

US$ million

Year 4

US$ million

Year 5

US$ million

More than

5 years

US$ million

Total

US$ million

Trade and other

payables

12.3 106.5 21.4 — — — — — 140.2

Customer deposits 74.0 — — — — — — — 74.0

Lease liabilities — 1.7 5.3 6.4 6.0 5.0 4.9 9.2 38.5

86.3 108.2 26.7 6.4 6.0 5.0 4.9 9.2 252.7

1 Excludes taxes payable.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

156

25 Financial risk management cont.

Market risk

Currency risk

The Group’s financial risk arising from exchange rate fluctuations is mainly attributed to:

• Mismatches between customer deposits, which are predominantly denominated in US$, and the net receipts from customers,

which are settled in the currency of the customer’s choice and of which Pounds Sterling (GBP) and Euros (EUR) are the most

significant.

• Mismatches between reported revenue, which is mainly generated in US$ (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, the majority of which are denominated in foreign currencies including Pounds Sterling (GBP), Euros (EUR) and New

Israeli Shekels (ILS).

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.

At 31 December 2021 the Group does not have any open foreign exchange forward contracts.

The tables below detail the monetary assets and liabilities by currency:

2021

GBP

US$ million

EUR

US$ million

ILS

US$ million

USD

US$ million

Other

US$ million

Total

US$ million

Cash and cash equivalents 48.3 65.3 21.3 95.7 25.0 255.6

Trade and other receivables 11.7 23.2 1.7 5.0 9.1 50.7

Monetary assets 60.0 88.5 23.0 100.7 34.1 306.3

Trade and other payables (53.3) (31.3) (23.8) (53.0) (10.6) (172.0)

Customer deposits (15.0) (20.2) — (38.5) (7.4) (81.1)

Lease liabilities (5.7) (11.2) (13.9) (0.1) — (30.9)

Monetary liabilities (74.0) (62.7) (37.7) (91.6) (18.0) (284.0)

Net financial position (14.0) 25.8 (14.7) 9.1 16.1 22.3

2020

GBP

US$ million

EUR

US$ million

ILS

US$ million

USD

US$ million

Other

US$ million

Total

US$ million

Cash and cash equivalents 72.6 59.3 17.8 58.3 14.2 222.2

Trade and other receivables 11.8 19.1 0.7 2.3 11.4 45.3

Monetary assets 84.4 78.4 18.5 60.6 25.6 267.5

Trade and other payables (38.6) (21.9) (23.0) (49.7) (7.0) (140.2)

Customer deposits (17.1) (22.1) — (29.1) (5.7) (74.0)

Lease liabilities (3.4) (11.0) (18.8) (0.3) (0.2) (33.7)

Monetary liabilities (59.1) (55.0) (41.8) (79.1) (12.9) (247.9)

Net financial position 25.3 23.4 (23.3) (18.5) 12.7 19.6

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

157

25 Financial risk management cont.

Sensitivity analysis

The table below details the effect on profit before tax of a 10% strengthening (and weakening) in the US$ exchange rate at the

balance sheet date for balance sheet items denominated in Pounds Sterling, Euros and New Israeli Shekels:

Year ended 31 December 2021

GBP

US$ million

EUR

US$ million

ILS

US$ million

10% strengthening 1.4 (2.6) 1.5

10% weakening (1.4) 2.6 (1.5)

Year ended 31 December 2020

GBP

US$ million

EUR

US$ million

ILS

US$ million

10% strengthening (2.5) (2.3) 2.3

10% weakening 2.5 2.3 (2.3)

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:

Effect on profit before tax

2021

Interest

bearing

deposits

US$ million

2020

Interest

bearing

deposits

US$ million

50bp increase — 0.1

50bp decrease — (0.1)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

158

26 Fair value measurements

The Group’s equity investment of US$0.2 million was written off during 2020. This investment was measured at fair value (level 2).

For the remaining financial assets and liabilities, the Group considers that the book value approximates to fair value.

There were no changes in valuation techniques or transfers between categories in the period.

27 Provisions, contingent liabilities and regulatory issues

(a) In common with other operators from time to time the Group receives claims relating to losses incurred by customers. Civil claims

have been received from customers, principally in Austria, claiming refunds due to lack of local licensing. This trend is backed by

case law amongst the higher Austrian courts. In addition, claim-financing bodies are gathering claims against operators. The

Group is dealing with these civil claims with help from its local advisors. A similar uptick in civil claims also recently started in

Germany, but to a lesser extent.

In estimating the size of the potential outflow, the Directors have assessed claims received to date and the Groups policy for

defending these claims. A liability has been recorded to reflect the most likely cash outflow. However, claims continue to be

received at an increasing rate and there is an expectation that this trend will persist. The Directors are unable to quantify the

outflow of funds associated with future claims. Any potential outflow would then take place over a multi-year period.

(b) The Group have entered into agreements with third parties for a range of fees and expenses in connection with the acquisition

of William Hill International. £17-21 million of these fees are only payable contingent on the completion of the transaction and as

such are considered a contingent liability given shareholder approval and subsequent completion is expected in Q2 2022.

partnership with Authentic Brands Group, a brand development, marketing and entertainment company and owner of the Sports

Illustrated brand. The commitment includes certain licence fees, employment costs and marketing activities during the course of

the agreement.

28 Post balance sheet events

On 1 March 2022, the UKGC published a statement on its website related to its investigation following its 2020 compliance

assessment of the Group, which outlined certain shortcomings in respect of former safer gambling and anti-money laundering

policies, procedures and controls of the Group and pursuant to which 888 was fined £9.4 million. 888 took immediate and

appropriate actions to improve the relevant internal policies, procedures and controls to ensure it is fully compliant with its licensing

obligations. The fine has been recorded as a provision in note 19 of the Financial Statements.

Since January 2022, as resolved at an Extraordinary General Meeting of the Company on 16 December 2021, the affairs of the

Company have been conducted so that the central management and control of the Company is exercised in the United Kingdom.

As a result, from January 2022 the Company has ceased to be treated as Gibraltar tax resident and instead has been treated as

resident in the United Kingdom for tax purposes.

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

159

Note

2021

US$ million

2020

US$ million

Assets

Non-current assets

Investments in subsidiaries 2 55.0 47.5

Deferred tax assets 10 — 0.5

55.0 48.0

Current assets

Trade and other receivables 3 94.7 131.3

Cash and cash equivalents — —

94.7 131.3

Total assets 149.7 179.3

Equity and liabilities

Equity

Share capital 4 3.3 3.3

Share premium 4 3.7 3.7

Treasury shares 4 (1.3) (0.5)

Retained earnings

102.6 91.9

Total equity 108.3 98.4

Liabilities

Current liabilities

Trade and other payables 5 6.7 23.2

Income tax payable 1.8 18.3

Loan payable to subsidiaries 6 8.9 —

17.4 41.5

Non-current liabilities

Loan payable to subsidiaries 9 23.6 39.4

Deferred tax liabilities 0.4 —

24.0 39.4

Total liabilities 41.4 80.9

Total equity and liabilities 149.7 179.3

1 Includes net profit of the Company for the year ended 31 December 2021 of US$65.3 million (31 December 2020: US$63.1 million).

The financial statements on pages 160 to 162 were approved and authorised for issue by the Board of Directors on 8 March 2022

and were signed on its behalf by:

ITAI PAZNER YARIV DAFNA

Chief Executive Officer Chief Financial Officer

The notes on pages 163 to 165 form part of these financial statements.

COMPANY BALANCE SHEET

AT 31 DECEMBER 2021

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

160

capital

US$ million

premium

US$ million

Treasury

US$ million

Retained

earnings

US$ million

Total

US$ million

Balance at 1 January 2020 3.3 3.7 (0.7) 54.9 61.2

Profit and total comprehensive income for the year — — — 63.1 63.1

Dividend paid (note 9) — — — (33.2) (33.2)

Acquisition of treasury shares — — (0.3) — (0.3)

Exercise of deferred share bonus plan — — 0.5 (0.5) —

Equity settled share benefit charges (note 8) — — — 7.6 7.6

Balance at 31 December 2020 3.3 3.7 (0.5) 91.9 98.4

Profit and total comprehensive income for the year — — — 65.3 65.3

Dividend paid (note 9) — — — (61.3) (61.3)

Acquisition of treasury shares — — (1.1) — (1.1)

Exercise of deferred share bonus plan — — 0.3 (0.3) —

Equity settled share benefit charges (note 8) — — — 7.0 7.0

Balance at 31 December 2021 3.3 3.7 (1.3) 102.6 108.3

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 163 to 165 form part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

161

Note

2021

US$ million

As restated

2020

US$ million

Cash flows from operating activities:

Profit before tax 50.7 73.8

Adjustments for:

Share benefit charges 8 0.1 0.7

Dividend receivable (51.9) (74.5)

Income tax paid (1.1) (0.1)

Decrease in amounts owed by subsidiaries 3, 5 23.7 16.8

Increase (decrease) in amounts owed to subsidiaries (13.3) 12.3

Increase (decrease) in other receivables 3 (8.9) (0.8)

Increase (decrease) in trade and other payables 5 (3.2) 6.1

Net cash generated from operating activities (3.9) 34.3

Cash flows from investing activities

Dividends received 9 74.5 27.2

Net cash generated from investing activities 74.5 27.2

Cash flows from financing activities:

Issue of shares 4 — —

Acquisition of treasury shares 4 (1.1) (0.3)

Repayment of loans to subsidiaries (8.2) (9.0)

Interest paid 9 (1.0)

Proceeds from loans, net of transaction fee — 32.0

Repayment of loans — (50.0)

Dividends paid 9 (61.3) (33.2)

Net cash used in financing activities (70.6) (61.5)

Net 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 — —

1 The presentation of the Company statement of cash flows was restated following FRC enquiry, as described in further detail in note 1.

The notes on pages 163 to 165 form part of these financial statements.

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

162

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 International Financial Reporting Standards (“IFRS”)

as adopted by the European Union and on an historical cost basis.

The Company applies consistent accounting policies, as applied by the Group. To the extent that an accounting policy is relevant to

both Group and Company financial statements, refer to the Group financial statements for disclosure of the accounting policy (see

note 2 to the consolidated financial statements). Material policies that apply to the Company only are included as appropriate.

Under Section 288 of the Gibraltar Companies Act 2014, the Company is exempt from the requirement to present its own income

statement.

Prior year restatement of parent company cash flow statement

In October 2021, the Company received a letter from the Corporate Reporting Review Team of the Financial Reporting Council (FRC)

as part of its regular review and assessment of the quality of corporate reporting in the UK, requesting further information in relation

to the Company’s 2020 Annual Report and Accounts. The letter primarily focused on the parent company cashflow statement.

Following the review, the following line items have been restated in the Parent Company Cash Flows Statement:

• The 2020 cashflows from dividends received has been restated to be US$27.2 million with the corresponding adjustment to

increase in amount owed by subsidiaries.

• A new line “Increase in amounts owed to subsidiaries of US$12.3 million has been included in the reconciliation from Profit before

tax to Cash generated from operations.

• As a result of these two changes the line ‘Increase in net amounts owed by subsidiaries’ changed to ‘Decrease in amounts owed

by subsidiaries’ and has been restated to US$16.8 million.

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 22 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 US$7.5 million (2020: US$1.4 million) included within this were share-based payment charges of US$6.9 million

in 2021 (2020: US$6.9 million), which is net of US$9.4 million intragroup recharges related to share based payment schemes

(2020: US$5.5 million). The Company made a US$10.0 million capital contribution during the year (2020: nil) in respect of

incorporation of new subsidiaries.

NOTES TO THE COMPANY FINANCIAL STATEMENTS

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

163

3 Trade and other receivables

2021

US$ million

2020

US$ million

Amounts due from subsidiaries 84.6 130.1

Other receivables and prepayments 1.5 1.2

Restricted short-term deposits 8.6 —

94.7 131.3

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 18 to the consolidated financial statements are consistent with those for the Company, including capital

management in note 25 to the consolidated financial statements.

5 Trade and other payables

2021

US$ million

2020

US$ million

Trade payables 0.1 —

Amounts due to subsidiaries — 13.3

Other payables and accrued expenses 6.6 9.9

6.7 23.2

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 25 to the consolidated financial statements.

Interest-bearing loans and borrowings are disclosed in note 20 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 27 to the consolidated financial statements are consistent with those for the Company.

NOTES TO THE COMPANY FINANCIAL STATEMENTS cont.

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

164

8 Share benefit charges

The disclosures in note 23 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 received dividends totalling US$74.5 million (2020: US$27.2 million) from its subsidiaries and

recognised, in the net profit, dividend receivable in respect of the year ended 31 December 2021, from its subsidiaries through

intercompany accounts (to be paid subsequently in cash), totalling US$51.9 million (2020: US$74.5 million). During the year the

Company paid to its shareholders dividends totalling US$61.3 million (2020: US$33.2 million). See note 10 to the consolidated

financial statements.

Share benefit charges in respect of options and shares of the Company awarded to employees of subsidiaries totalled

US$6.9 million (2020: US$6.9 million). During the year the Company charged its subsidiary for cost of awards for US$9.4 million

(2020: US$5.5 million).

During the year the Company repaid US$8.2 million to its subsidiaries (2020: The Company repaid US$9.0 million) and recorded

a US$1.4 million (2020: US$1.7 million) interest expenses in respect of the loan which were recharged to other Group entities.

At 31 December 2021, the net amounts owed by subsidiaries to the Company were US$84.6 million (2020: US$116.8 million).

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 has been recognised at the UK tax rate. As at 31 December 2021, the Company has a deferred

tax liabilities of US$1.4 million (2020: US$0.4 million) partially offset by deferred tax asset of US$1.0 million (2020: US$0.9 million).

321

888 HOLDINGS PLC

Annual Report and Accounts 2021

165

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.secr[email protected]om

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 Cazenove

Canaccord Genuity Limited

888 HOLDINGS PLC

Annual Report and Accounts 2021

SECTION 3

Financial Statements

166