Casino Gambling Law

888 Shares Decline as CEO is Fired

Online gambling company discovers that several areas, such as anti-money laundering procedures, do not follow best standards.

Shares of 888 Decline as CEO is Fired and Middle East VIP Accounts are Suspended
Shares of 888 Decline as CEO is Fired and Middle East VIP Accounts are Suspended

Following an internal inquiry into a failure to follow anti-money laundering procedures, online betting giant 888 has fired its chief executive and blocked VIP customer accounts in the Middle East.

Shares in the Gibraltar-based company, which in 2017 paid £2.2 billion to purchase William Hill's international assets, fell by more than a quarter as investors fueled 888's largest share price decline since 2006. Over the past year, its market value has decreased by more than 70%. 

The business stated specifically, "best practices have not been followed" in relation to "know your client" and anti-money laundering regulations.

“While further internal investigations are underway, the board has taken the decision to suspend VIP customer accounts in the region, effective immediately,” the company said. “Based on the board’s current understanding, the process deficiencies identified are isolated to this region only.”   If the suspensions are kept in place, the company estimates that they might cost up to 3% of total group revenues, or £50 million. 

Itai Pazner, who has worked for the company for more than 20 years and served as its chief executive for the last four, also announced his immediate retirement from the organisation. “Gambling stocks are under enough regulatory scrutiny as it is without inviting reasons for further attention, and yet that’s exactly what 888 has done,” said Russ Mould, the investment director at AJ Bell. “News it is suspending VIP accounts in the Middle East over best practices not being followed over money laundering is incredibly damaging.”

888 has requested Yariv Dafna, the chief financial officer who was scheduled to leave at the end of March, to stay on until the end of the year in an effort to calm investors. The business announced that Jonathan Mendelsohn, its chair and a Labour peer who is married to European Meta executive Nicola Mendelsohn and a veteran party fundraiser and lobbyist, would temporarily assume executive duties while the board looks for Pazner's replacement. 

“The board and I take the group’s compliance responsibilities incredibly seriously,” said Lord Mendelsohn. “When we were alerted to issues with some of 888’s VIP customers, the board took decisive actions. We will be uncompromising in our approach to compliance as we build a strong and sustainable business.” 

In recent years, the Gambling Commission has penalised 888 many times for noncompliance. Due to many mistakes that caused clients to suffer significant losses in the midst of the Covid epidemic, it was fined £9.4 million last year, the third-highest amount in the history of British gambling regulation. After discovering that more than 7,000 users who had voluntarily stopped gambling could still access their accounts, the business was forced to pay £7.8 million for their "outrageous" errors in 2017. 

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