February 22, 2023
888, a leading online gambling company, has closed its VIP player accounts in the Middle East amid an internal investigation into non-compliance with anti-money laundering regulations. The company's board announced the immediate suspension of these accounts due to process deficiencies only in this region.
In a statement, 888 said specific protocols regarding KYC (Know Your Customer) and anti-money laundering rules were not followed. The company operates some of the best live casino sites in the Middle East, including 888 Casino and 777 Casino.
As a result of the latest development, investor fears have seen the share price of the Gibraltar-based company slump by over 25%. This is 888's biggest share drop since 2006. Note that the market value of the gambling firm has decreased by more than 70% over the last twelve months.
Even worse, the company noted that their revenues could be adversely impacted by up to 3% (roughly £50m) if the suspensions remain in place. This proves just how important Middle East players are to 888.
At the same time, 888 announced the departure of Itai Pazner, who had been the CEO for the last four years. Pazner had worked with the company for over two decades. Jonathan Mendelsohn, the company's chair, will fill this void, taking up interim executive duties as the board searches for a successor to Pazner.
Mendelsohn emphatically declared that he and the board prioritize meeting their compliance obligations. He said the board took decisive steps after learning of the issues regarding 888's VIP accounts in the Middle East. Mendelsohn added that 888 would be resolute in its compliance efforts to create a robust and sustainable business.
To allay any investor fears, 888 Gaming requested Yariv Dafna, the CFO who was expected to depart at the end of March, to remain until the year ends.
It's to be noted that in recent years, the UK Gambling Commission has imposed penalties on 888 due to the lack of adherence to regulations. The British gambling regulator imposed a £9.4m fine on a betting firm last year, the third-highest ever, due to multiple issues that caused customers to suffer significant losses during the pandemic.