Monster fine in the cards
Online gambling operator 888 Holdings is facing a record-breaking fine from the UK Gambling Commission (UKGC) following an investigation into the company’s anti-money laundering and social responsibility obligations.
set aside £15m ($17m) to cover the penalty
According to the Daily Mail, the global betting giant has set aside £15m ($17m) to cover the penalty. Industry sources, however, told the Mail the penalty could exceed £20m ($23m), which would surpass Paddy Power’s £17m ($20m) as the UK’s record gambling fine.
While the UKGC remains tight-lipped on the potential fine, industry insiders say an official announcement is imminent. Keystone Law’s Richard Williams said the situation did not bode well for companies that had failed to learn from previous mistakes, even if the alleged failings related to previous owners of William Hill.
The company’s shares fell by 0.9% following news of the impending fine
Nightmare in the UK
The impending fine drives a deadly stake into 888’s already haemorrhaging vitals. Share prices have tanked an astounding 85% since September 2021, form that will see the firm get booted out of the FTSE 250 this month.
Triggering 888’s staggering collapse was its £1.95bn ($2.31bn) purchase of William Hill from Caesars Entertainment in May. Fast-forward to November, however, and banks including JPMorgan Chase & Co have returned to market to offload $417m of the 888 debt they took on for financing the William Hill buyout by selling it to investors.
The UK industry is also awaiting the long-delayed gambling white paper, which could bring about market-altering changes.
888 also faces more fire over other regulatory issues, including an internal investigation into money laundering on VIP accounts in the Middle East. The company has since suspended its VIP customer accounts in the Middle East.
CEO Itai Pazner abandoned ship
Last month, CEO Itai Pazner abandoned ship upon news of the Middle East investigation, leaving Lord Mendelsohn, the group’s chairman, to take on daily operations as an interim measure.
In the most aggressive market of all, US sports betting, 888 has fared no better, having gone the way of MaximBet, Fubo, and Unibet when it announced in November it would pull out of sports-betting-only states.
The company’s full-year results are due at the end of March.