Gaming giant 888 plunged into crisis: Boss sacked as company launches money laundering probe
The 888 boss has made a shock exit after the gaming group launched an investigation into suspected money laundering on VIP customer accounts in the Middle East.
The FTSE 250 firm – which owns William Hill bookmakers in the UK as well as host of casino websites – has said chief executive Itai Pazner will leave with immediate effect after more than two decades with the company. , including four years at the top.
In a separate statement, 888 said it suspended VIP customer accounts typically reserved for the wealthiest and most lucrative players after an internal review found best practices were not followed in certain areas, including processes. of combating money laundering.
Sacked: Gaming giant 888 says chief executive Itai Pazner (pictured) will leave with immediate effect after more than two decades at the company with four years at the top
Chief Financial Officer Yariv Dafna, who said this month he would leave in March, said he would stay until the end of the year. It is understood that this step has been taken to ensure that the company is not faced with the prospect of having no permanent chief executive or chief financial officer in the coming months as the investigation continues.
Lord Mendelsohn, a Labor peer and non-executive chairman of the group will take the reins of 888 until a permanent boss is found.
888 – whose brands include 888casino, 888poker and Mr Green, as well as William Hill – said the suspended accounts will affect up to 3% of the group’s revenue, or around £50m, raising questions about the number of customer accounts involved in the investigation. .
VIP accounts generate substantial revenue for gaming companies as high rollers are encouraged to wager huge sums on a more premium service.
UK regulators have cracked down on these services in recent years, following suggestions that they have driven individuals into debt and problematic gambling habits.
Industry standards body the Betting and Gaming Council released a code of conduct on VIP accounts in 2020, which saw the number of people signing up for such schemes drop by 70% for licensed businesses in the UK -United.
Mendelsohn said: “The Board and I take the group’s compliance responsibilities extremely seriously. When we were alerted to issues with some of 888’s VIP customers, the board took decisive action.
“We will be uncompromising in our approach to compliance as we build a strong and sustainable business.”
Guardian: Lord Mendelsohn, a Labor peer and non-executive chairman of the group (pictured below with his wife Nicola), will take the reins of 888 until a permanent boss is found
The president of 888 inherits a sad situation. Not only is the company grappling with regulatory uncertainty following government delays to the gambling white paper, which could slash revenue with accessibility controls and restrictions on online betting, but it is also carrying a hefty £1.6billion debt after buying the High Street bookmaker. William Hill last year for £1.95billion.
AJ Bell’s chief investment officer Russ Mold said: “Gambling stocks are getting enough regulatory scrutiny because they don’t get cause for extra scrutiny and yet that’s exactly what 888 did.”
Shares in the Gibraltar-based company plunged 27.5%, or 28.35p, to 74.85p in London after the news, taking losses since its 2021 high to more than 80%.
888 was fined £9.4m by the UK’s gambling watchdog last year over “social responsibility and money laundering failings”.
However, as the company operates under a license from Gibraltar and business activities take place in the Middle East, this investigation falls outside the jurisdiction of the Gambling Commission.
Mold added: “Investors may have been more reassured by [Pazner] stay in place to settle the problems in the Middle East – an unenviable task that will now fall to Mendelsohn.