888 Account Suspensions, Exec Exits, Company Shares Lose More Than a Quarter of Value
Several 888 Holdings VIP customer accounts are now suspended after an investigation into anti-money laundering failings.
Currently, the probe is focused on the Middle East but regulators worldwide, including the United States, will certainly be paying close attention to the matter.
The impact is already being felt in the financial markets. 888 Holdings lost more than a quarter of their value on Monday after the company removed its chief executive. The company's shares tumbled as much as 14.4% on the news, before recovering a little to stand about 11% lower by 0815 GMT.
Chief Executive Officer Itai Pazner will step down immediately. He has served in the position since January 2019 and received in excess of US$5 million from 888 last year (£4.03m/€4.59m).
“Itai Pazner is leaving his role with immediate effect”, the notice confirmed.
Lord Jonathan Mendelsohn, 888’s Non-executive Chair, will be appointed Interim Executive Chair.
“On behalf of the board I would like to thank Itai for his significant contributions to the business over more than 20 years, including the last four as CEO,” said Lord Mendelsohn.
The Gibraltar-based gambling group said on Monday the VIP customer account suspensions were the result of “best practices have not been followed” in relation to “know your client” and anti-money laundering regulations.
Further investigations were underway, however, the errors appear to be “isolated” to the Middle East region. 3% of the group's revenues are affected by the suspensions, or about £50mn.
It remains to be seen how this news will impact 888's partnership with Sports Illustrated. The joint venture has culminated in the SI Sportsbook, which currently operates in the commonwealth of Virginia and two others U.S. states: Colorado and Michigan. 888 also runs an online sportsbook in New Jersey.
The company continues to struggle after witnessing a disappointing 15% year-over-year drop in 2022 online revenue from £1.57 billion ($1.92 billion) to £1.33 billion ($1.62 billion).
- Aaron Goldstein, Gambling911.com
