888 separated
On Monday, the bottom fell out of 888 Holdings plc shares when CEO and Executive Director Itai Pazner stepped down from both jobs as an internal inquiry into suspected failings in the company’s anti-money laundering (AML) and know-your-customer (KYC) systems was launched.
888’s stock dropped over 10% from Friday’s finish of 103.20p to Monday’s opening price of 93p. From then, things just got worse. The stock price reached a low of 72.65p and barely recovered to close at 74.85p, representing a shocking decline of 27.47% on the day.
888 announced in a public announcement that it is immediately banning VIP client accounts in the Middle East because “certain best practices have not been followed in reference to” AML and KYC processes. The business feels that the problems are isolated to that particular area.
888 also sought to reassure investors that the bans would only affect less than 3% of business revenue if they were to stay in place indefinitely. The financial markets seem to be less than persuaded.
Itai Pazner has been CEO of 888 Holdings since 2019 and had worked with the company for over 20 years. The company’s non-executive Chair, Lord Jonathan Mendelsohn, will serve as temporary CEO. Mendelsohn told analysts that Pazner’s departure “was the outcome of multiple management and compliance failures,” according to the Financial Times.
Interestingly, the preceding comment was not included in a later edition of the same Financial Times piece. Regardless, it is commonly thought that Pazner was driven out due to compliance difficulties that resulted in an inquiry and perhaps £50 million in revenue loss.
The organization has some baggage.
The fact that the UK Gambling Commission penalised 888 £9.4 million over a year ago for social responsibility and AML violations did not assist Pazner’s argument. In that case, some clients were permitted to deposit and/or gamble away five-figure sums without receiving any notification from 888 seeking proof of money or the like. The UKGC issued a formal warning and announced the appointment of an independent auditor.
888 is also in debt, totaling £1.8 billion, owing partly to its purchase of William Hill’s worldwide division last year.
The business will also lose its CFO at the end of the year, however Yariv Dafna will likely continue until the end of 2023, rather than leaving on March 31, as initially planned.
888 does not have a significant presence in the United States. It runs its own online casino and sports betting brand in New Jersey, but it also licenses its technology to other businesses. It powers the limited-reach SI Sportsbook, but it is better recognized in the US market as the powerhouse behind WSOP.com and Delaware’s racino-based online poker operations.
Source: www.pokernewsdaily.com