The shares of Gibraltar-based online gambling operator 888 Holdings dropped by more than 28% during January 30th trading after announcing the departure of its chief executive officer and executive director Itai Pazner following the launch of an internal probe into suspected money laundering that has been taking place on the company’s VIP customer accounts.
The beginning of the week saw the gambling group confirm that it had suspended a number of VIP customer accounts in the Middle East after it became known that 888 Holdings had failed to follow the best practices linked to anti-money laundering (AML) and know-your-customer (KYC) regulations. In a statement to the London Stock Exchange, the online gambling company shared that an internal compliance review has already been underway.
At the time 888 Holdings also revealed that the company’s board had made the decision to suspend VIP customer accounts in the Middle East region with immediate effect while further internal investigations are taking place.
According to reports, the financial impact on group revenues of the suspension of the aforementioned accounts is less than 3%, or about £50 million, should the ban on the Middle Eastern VIP customer accounts remain in place. The group further noted that the process deficiencies were isolated to the aforementioned region only.
Two Key Executives Leave 888 Holdings in a Matter of Weeks, Leaving the Company’s Business in Uncertainty
As reported above, Itai Pazner was leaving his CEO and executive director roles at 888 Holdings with immediate effect, after spending four years in these positions, and more than 20 years at the Gibraltar-based gambling company. This is not the first major executive’s change in the company’s management team in 2023. Earlier in January, the finance chief operating officer of 888 Holdings, Yariv Dafna, revealed that he would leave the online gambling operator’s business at the end of March 2023.
The loss of both the CEO and CFO so quickly after one another leaves 888 Holdings in an uncertain position, as the company will have to reassure worried shareholders of the stability of its assets with plans to reduce its £1.8-billion debt pile that has been largely based on the purchase of the non-US operations of its rival William Hill.
At the same time, the group has experienced a share price decline of more than 50% over the past year, following a slowdown in its online gambling business after the market situation started getting back to normal after the Covid-19 pandemic. On the other hand, 888 Holdings faced a massive, £9.4-million fine from the UK Gambling Commission (UKGC) in 2022 after the country’s gambling regulatory body found some money laundering and social responsibility failures.
The group’s non-executive chair, who is also a Labour peer, Lord Jonathan Mendelsohn, is set to run the business while the gambling giant’s board is looking for a new chief executive officer.
In a statement released after the confirmation of Mr Pazner’s departure, Mr Mendelsohn shared that both he and the board took the compliance responsibilities of the group extremely seriously. He further shared that the board of directors had taken decisive actions as soon as its members had been alerted about the issues regarding some of the VIP customers of the company in the Middle East. Mr Mendelsohn explained that the company would make no compromise in its approach to compliance with AML and KYC rules because it was willing to build and retain a strong and sustainable business.
- Author
Olivia Cole
