Gambling giant 888 plunged into crisis: Boss axed as firm kicks off money laundering probe
The boss of 888 made a shock exit after the gambling group launched an investigation into suspected money laundering on VIP customer accounts in the Middle East.
The FTSE 250 business – which owns William Hill bookies in the UK as well as host of casino websites – said chief executive Itai Pazner would leave with immediate effect after more than two decades at the company including four years at the top.
In a separate statement, 888 said it has suspended VIP customer accounts usually reserved for the wealthiest and most lucrative gamblers after an internal review found best practices had not been followed in some areas, including anti-money laundering processes.
Sacked: Gambling giant 888 said chief exec Itai Pazner (pictured) would leave with immediate effect after more than two decades at the company with four years at the top
Chief finance officer Yariv Dafna, who this month said he would leave in March, said he will stay on until the end of the year. It is understood this step was taken to ensure the company did not face the prospect of having no permanent chief executive or finance director in the coming months as the investigation continues.
Lord Mendelsohn, a Labour peer 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 revenues, or about £50million, raising questions about the number of customer accounts involved in the investigation.
VIP accounts generate substantial turnover for gambling firms as high-rollers are encouraged to bet huge sums 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 on VIP accounts in 2020, which saw the number of people enrolled in these schemes fall by 70 per cent for companies licensed in the UK.
Mendelsohn said: ‘The board and I take the group’s compliance responsibilities incredibly seriously. 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.’
Caretaker: Lord Mendelsohn, a Labour peer and the group’s non-executive chairman (pictured below with his wife Nicola), will take the reins at 888 until a permanent boss is found
The 888 chairman inherits a sorry state of affairs. Not only is the company grappling with regulatory uncertainty following the Government’s delays to the gambling white paper, which could chip away at revenues with affordability checks and restrictions on online betting, but it also carries a hefty £1.6billion debt pile after buying High Street bookie William Hill last year for £1.95billion.
AJ Bell investment director Russ Mould said: ‘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.’
Shares in the Gibraltar-based firm plunged 27.5 per cent, or 28.35p, to 74.85p in London following the news, taking losses since its 2021 peak to over 80 per cent.
888 was whacked with a £9.4million fine from the UK gambling watchdog last year following ‘social responsibility and money laundering failings’.
However, because the company is operating under a Gibraltar licence and the business operations are in the Middle East, this investigation does not fall under the Gambling Commission’s jurisdiction.
Mould added: ‘Investors may have been more reassured by [Pazner] staying in place to sort out the problems in the Middle East – an unenviable task which will now fall to Mendelsohn.’
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