Leading iGaming Operator 888 Rocked by Internal Investigation
World-famous online casino and sportsbook operator 888 has had a turbulent start to 2023 after an internal investigation was conducted into the company’s processes to prevent money laundering. Gibraltar-based 888 was made aware of a failure to adhere to its processes. It launched a wide-ranging review to ensure that it was compliant with its own standards and those of international anti-money laundering authorities. Because of this, trust in the company seems to have plummeted, leaving the heads of the business with tough decisions to make early into the year.
European iGaming giant 888 has had to take some drastic steps in order to restore an element of stability within the organization. One of these measures has been suspending VIP accounts in the Middle East. That is a bold move considering that those accounts reportedly make up around 3% of the group’s global revenue, which showcases just how seriously those at the top are taking these breaches. A spokesperson announced the decision to make such a move by saying that during the investigation, “the board has taken the decision to suspend VIP customer accounts in the region, effective immediately.”
Incidents of Concern Not Worldwide but Effects Are
While this all appears to be extremely bad news for the company, it’s worth noting that the reported breaches of procedure have apparently come solely in one geographic region. That is the Middle East. The spokesperson for 888 clarified this when saying, “the process deficiencies identified are isolated to this region only.” This is a positive to a very minor extent, as it appears that the company has pinpointed exactly where the issues lie but it still hasn’t done much to appease investors and users alike. Because of that, there have been wholesale changes right at the very top of the organization in an attempt to show sweeping changes to the deficient structure in place.
Itai Pazner was appointed the CEO of 888 Holdings in 2019 but, four years later and two decades on from his start with the company, he has now been let go as part of the shake-up of the company hierarchy. It was perhaps inevitable that such a step would have to be taken, given that shares took a nosedive in the wake of the announcements of the failures to act according to procedures. Shares reportedly took a nosedive of nearly a quarter in the days and weeks after the deficiencies and the earliest steps to correct them were made. And, with Pazner believed to be collecting a $5 million annual salary, it’s clear to see why the decision was quick to be made.
What Does the Future Hold for 888?
In tumultuous times such as this, it’s easy to lose sight of both the future and the past. 888 has been a mainstay in the European gaming scene for decades, even acting as one of the earliest iGaming operators to sponsor English Premier League teams like Aston Villa and Middlesbrough in the early 2000s. That pedigree should be enough to retain a loyal user base and also curry favour with newer players through sheer brand recognition and longevity. With that said, the outlook may be dire but it’s not quite panic stations just yet, even if the CEO of nearly half a decade has lost his job. However, likely in an effort to combat the bad press, outgoing CFO Yariv Dafna has been handed a request to delay his leaving date from March until the end of 2023.
In the interim, the CEO role will be filled with a stop-gap. Lord Johnathon Mendelsohn, who is currently the acting non-executive chair, will step temporarily into a new role of interim executive chair. The British lobbyist has decades of experience working with companies in the industry and, in his role as a member of the House of Lords, has plenty of influence when it comes to dealing with governments and authorities. This should make him the perfect stand-in while the search begins for a more permanent CEO, especially as he looks to put out fires that could potentially involve legal red tape and the involvement of external authorities.
Looking at the current situation, it’s clear to see why many hold grave concerns about the company’s status in such a competitive industry. One leading investment director described the current goings-on as, “incredibly damaging,” and it’s easy to see why. The last year has seen a monumental share market value drop of around 70%, representing the worst year in the company’s history since 2006. Adding further turmoil on top of that surely won’t be helpful, but it will be interesting to see how the famous name will battle through.