Lisa Cheban | 17 February, 2023 12:19 | Last update on: 28 September, 2023 12:36
888, one of the most respected and reliable online betting firms on the international stage, recently announced the removal of its CEO and the suspension of VIP player casinos in the Middle East. This is after internal investigations were launched to show if the gambling site failed to follow anti-money laundering procedures.
The company said that specific best practices must be applied concerning knowing clients and anti-money laundering laws. 888’s websites have been accepting players from Middle East countries, including Qatar, Kuwait, UAE, etc.
An official statement released by the company said that the board had resolved to suspend all VIP accounts from the region amid ongoing investigations. The report adds that the board’s understanding is that the deficiencies being investigated only apply to accounts from this region.
Following the suspension, the Gibraltar-based group saw its shared drop by more than 25%. This is the most significant share drop for the operator since 2006. Over the last year, 888’s market value has dropped by more than 70%. The company statement revealed that the suspended accounts make up the group’s 3% of revenues (around $50 million) if they remain suspended.
Immediate Departure of CEO
Of course, heads had to roll following the new revelations. 888 announced the departure of the company’s chief executive for the last four years, Itai Pazner. The official has been part of the group for more than two decades.
To dispel investor fears, 888 requested Yariv Dafner, the company’s chief financial officer, to stay until the year ends. The official was expected to depart 888 by the end of March this year.
Meanwhile, the company’s chair, Jonathan Mendelsohn, would temporarily perform executive duties as they hunt for Pazner’s replacement. Mr Mendelsohn is married to Nicola Mendelsohn, the European Meta executive.
After his appointment, Mr Mendelsohn commented, “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.”
Speaking of the latest development at 888, Russ Mould, AJ Bell’s Investment Director, said news of VIP account suspensions in the Middle East over best practices regarding money laundering could damage the company’s public image. Mould said that betting stocks are under enough scrutiny already, and inviting further attention could be damaging.
It’s to be remembered that the UK Gambling Commission has fined 888 multiple times over the years over compliance issues. Last year, the company was fined £9.4 million by the commission over various failings. This is the highest amount a company has been fined in the UK’s regulated gambling scene.