Steep drop
Shares in 888 Holdings plummeted 27% on Monday morning after CEO Itai Pazner resigned as a result of a probe into 888’s VIP operations in the Middle East.
Certain issues came to light after an internal compliance review, sparking further investigations. It was discovered that best practices might not have been followed in relation to anti-money laundering and know-your-customer (KYC) systems for some of its VIP users in the Middle East.
suspended its VIP operations in certain markets
888 has suspended its VIP operations in certain markets until an internal compliance investigation finishes. The price drop in the London Stock Exchange-listed company is the biggest single fall in the firm’s history.
Making changes
The company’s board said that the financial impact of a permanent suspension of VIP customer accounts would be under 3% of total group revenue. The board’s understanding is that the issues only apply to the Middle East and no other regions. It is unclear if 888 will face any sort of regulatory action.
In a press release, 888 Holdings chairman Lord Jonathan Mendelsohn said that “We will be uncompromising in our approach to compliance as we build a strong and sustainable business.” Mendelsohn is stepping in as the interim chief executive.
A tough start to 2023
It has been a turbulent start to the year for 888 Holdings. Just a couple of weeks ago its chief financial officer (CFO) Yariv Dafna announced he would be stepping down following disappointing results in 2022. The company’s operations suffered a 3% year-on-year revenue drop last year.
Dafna will now remain as CFO until the end of 2023
The final full-year results will be published in March, which is when Dafna originally planned to leave his role. Following the news on Monday that the company’s CEO is stepping down, it was revealed that Dafna will now remain as CFO until the end of 2023.
888 is also in the process of integrating the recently acquired William Hill International into its operations. It bought William Hill’s non-US business last year for ￡1.95bn ($2.4bn). 888 hopes to generate synergies of ￡150m ($186m) by 2025 as a result of the acquisition. The company does have to contend, though, with ￡1.7bn ($2.1bn) of net debt following the transaction.