888 Shares Plunge as CEO Walks Amid Middle East Money Laundering Probe

Posted on: January 30, 2023, 10:05h. 

Last updated on: January 31, 2023, 03:13h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Shares in online gambling giant 888 Holdings [LON: 888] plunged almost 27% in early trading Monday. That’s after the Gibraltar-based company announced CEO Itai Pazner had quit amid an internal review that found deficiencies in its anti-money laundering (AML) program.

In a filing to the London Stock Exchange, 888 said it had chosen to suspend VIP activities in the Middle East pending the outcome of an internal compliance investigation.

“[…] it has come to light that certain best practices have not been followed in regard to KYC (Know Your Client) and AML (Anti-Money Laundering) processes for 888 VIP customers in the Middle East region,” said 888. “The Board currently estimates that the impact is less than 3% of Group revenues, should the suspensions remain in place. Based on the Board’s current understanding, the process deficiencies identified are isolated to this region only,” it added.

Whatever the exact nature of the crisis at 888, investors were spooked, wiping more than a quarter off the company’s value in one morning. It was the biggest single-day downswing in 888’s history.

Biggest Single-Day Downswing

888 said its current chairman, Lord Jonathan Mendelsohn, will become executive chair on an interim basis as the company searches for a replacement for Pazner.

Meanwhile, CFO Yariv Dafna has said he will remain in his role until the end of the year. He had been due to leave at the end of March.

“The board and I take the group’s compliance responsibilities incredibly seriously,” Mendelsohn said in a statement. “When we were alerted to issues with some of 888’s VIP customers, the board took decisive actions. We will be uncompromising in our approach to compliance as we build a strong and sustainable business.”

Past Troubles

Pazner held the top role at 888 for four years. Previously, he was COO, and before that, he spent six years as VP of the group’s B2C division.

Andrew Rhodes, UKGC chief executive, said last year that any future infractions by 888 would give the regulator cause to “seriously consider the suitability of the operator to uphold the licensing objectives and keep gambling safe and crime-free.”