Investigation of 888 company practices in Middle East leads to resignations
The key factors behind mega-power 888’s success have been its focus on innovation, quality, and technology. According to arabwinners.com, the Shaked brothers recognized the potential of the internet as a promising venue for online gambling from the company’s inception and pushed to develop features that would set 888 apart from the competitors. Despite its many achievements, 888 has faced its share of challenges over the years, including regulatory hurdles, financial difficulties, and intense competition from other online gaming companies.
The company has recently made headlines with some unsettling news. 888 is currently facing an investigation into its VIP services in the Middle East which has led to the departure of key executives, and a significant drop in its share value. This news has sent shockwaves through the online gambling industry and it’s important to understand the full extent of the situation.
A series of internal investigations
Regrettably, 888 is no stranger to regulatory scrutiny. In 2017, the company was fined £7.8 million for inadequate anti-money laundering measures and failure to safeguard vulnerable customers. The company paid £4.25 million in compensation to affected customers. The second investigation into the online gaming company began in November 2021, when the UK Gambling Commission announced that it was reviewing the company’s license. The UKGC focused the investigation on 888’s self-exclusion process, which allows customers to refrain from gambling activities if they feel they have a problem. Additionally, the Commission found multiple failures to comply with AML laws. The company was fined by the UKGC for the second time in 2022 for the same failings and it paid a £9.4 million penalty.
This last in the string of scandals is the suspension of the company’s VIP activities in the Middle East due to a lack of compliance with AML regulations. VIP customers are high-value players who generate significant revenue for gambling companies, and the suspension of these activities is a downfall for 888. An initial review of 888’s operations found negligence in the AML and KYC processes for VIP customers in the Middle East. The suspension will remain in place until the company can ensure full compliance with all relevant regulations.
High card replacement
In another surprising move, the CEO of 888 Holdings, Itai Pazner, has stepped down after thriving as a manager since 2019. He is credited with leading 888 through a period of notable success and growth in recent years. In his place, the company appointed Lord Mendelsohn, a respected business leader and member of the UK’s House of Lords, who could help provide the company with greater credibility and visibility in the UK and beyond. In his statement, Lord Mendelsohn thanked Itai for his contributions to the business and praised his role in the William Hill integration process and the development of the company.
Another losing hand and fold
The company is facing another setback with the departure of its finance boss Yariv Dafna, at the end of March. Dafna’s departure comes at a time of significant storm for the company, which has seen its share value fall by over 50% due to investor caution over its debt levels.
The acquisition of William Hill’s European operation came with a weighty price tag, and 888 took on a large amount of debt in order to finance the deal. The company’s troubles have continued with reports announcing that 888 postponed an investor event that was scheduled for the end of January.
The event was supposed to provide investors with a detailed update on the company’s financial performance and growth plans, but it was postponed amid ongoing uncertainty and speculation about the company’s future direction. It is hoped that this delay will allow 888 to address any issues that may have arisen and to present a more confident strategy for the future.
What’s in the cards?
Despite these complex challenges, there are reasons to be optimistic about 888’s long-term prospects. The company remains a major player in the online gaming industry, with a strong track record of growth and innovation. If the company is able to identify and address any issues with its VIP services and implement effective measures to prevent similar problems from arising in the future, it may be able to regain the trust of its customers and investors.
In the meantime, it is important for 888 to remain straightforward and communicative with its stakeholders. The company will need to keep investors and the public updated on any developments related to the investigation, as well as provide clear and convincing explanations for any actions it takes in response.