Boss of gambling giant 888 axed as firm launches money laundering probe
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Gambling giant 888 plunged into crisis: boss fired while company starts money laundering investigation
The boss of 888 made a shock departure after the gambling group launched an investigation into suspected money laundering of VIP client accounts in the Middle East.
The FTSE 250 company – which owns William Hill bookies in the UK and numerous casino websites – said CEO Itai Pazner would be leaving effective immediately after more than two decades with the company, including four years at the top.
In a separate statement, 888 said it suspended VIP client accounts normally reserved for the wealthiest and most lucrative gamblers after an internal review found that best practices in some areas, including anti-money laundering processes, had not been followed.
Fired: Gambling giant 888 said chief exec Itai Pazner (pictured) would be leaving effective immediately after more than two decades at the company with four years at the top
Chief finance officer Yariv Dafna, who said this month he would leave in March, said he will stay on until the end of the year. It is clear that this step was taken to ensure that the company does not face the prospect of not having a permanent CEO or chief financial officer during the investigation in the coming months.
Lord Mendelsohn, a Labor colleague and the group’s non-executive chairman, will take the reins at 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 per cent of group revenue, or around £50 million, raising questions about the number of customer accounts involved in the investigation.
VIP accounts generate significant revenue for gambling companies as high-rollers are encouraged to bet huge amounts on a more premium service.
UK regulators have clamped down on these services in recent years, following suggestions they pushed individuals into debt and problematic gambling habits.
The industry standards body, the Betting and Gaming Council, issued a code of conduct for VIP accounts in 2020, which has reduced the number of people enrolled in these schemes by 70 per cent for businesses licensed in the UK.
Mendelsohn said, “The board and I take the Group’s compliance responsibilities incredibly seriously. When we were alerted to problems with some of 888’s VIP clients, the board took decisive action.
“We will be uncompromising in our approach to compliance as we build a strong and sustainable business.”
Caretaker: Lord Mendelsohn, a Labor peer and the group’s non-executive chairman (pictured below with his wife Nicola), will take charge at 888 until a permanent boss is found
The 888 chairman inherits a miserable state of affairs. Not only is the company grappling with regulatory uncertainty due to the government’s delays on the white paper on gambling, which could reduce revenues with affordability controls and restrictions on online betting, but it is also heavily indebted at £1.6 billion after buying High Street bookmaker William Hill for £1.95 billion last year.
AJ Bell’s investment director, Russ Mold, said: ‘Gambling stocks are already sufficiently scrutinized by the regulators without cause for further scrutiny and yet that’s exactly what 888 has done.’
Shares in the Gibraltar-based company fell 27.5 per cent, or 28.35 pence, after the news to 74.85 pence in London, taking losses since peaking in 2021 to more than 80 per cent.
888 was fined £9.4 million by Britain’s gambling watchdog last year for ‘social responsibility and money laundering failures’.
However, because the company operates under a license from Gibraltar and its business activities are in the Middle East, this investigation does not fall under the jurisdiction of the Gambling Commission.
Mold added: “Investors may have been more reassured by [Pazner] to remain in place to solve the problems in the Middle East – an unenviable task that now falls to Mendelsohn.’