March 6 (Reuters) - British bookmaker 888 Holdings ( EIHDF )

said on Wednesday it had terminated its deal with Sports

Illustrated and was looking at options to sell or exit its

direct-to-consumer U.S. operations, due to intense competition

and low margins.

Sports Illustrated (SI), known for its eponymous sports

magazine, had entered the online betting market in an exclusive

deal with 888 in 2021 in a bid to entice SI fans.

Sportsbetting in the United States took off in the last few

years since it was legalised in 2018, with players in the

country partnering up with or buying out British gambling groups

that have more experience in that field.

But it has been a long road towards profitability for many

sports gambling groups including market leader Flutter-owned

FanDuel, which turned profitable for the first time

only last year.

"In the U.S., the intensity of competition and requirement

for scale means huge investment is required to reach

profitability," 888 CEO Per Widerström said in a statement.

BetMGM, jointly owned by Ladbrokes-owner Entain and

MGM Resorts ( MGM ), made its first profits in the second half

of last year.

888, which is active in four U.S. states, said it was

terminating its agreement with SI-parent Authentic Brands

and would pay a termination fee of about $25 million.

The termination is expected to help save 888 about $6

million to $7 million per year in 2024 and 2025, it added.