William Hill Regulatory Failures in the UK Could Set a New Record for 888
Posted on: March 9, 2023, 09:13h.
Last updated on: March 13, 2023, 05:57h.
Making a deal to purchase William Hill’s non-US gambling assets from Caesars Entertainment might be a nightmare for new owner 888. The bookmaker, one of the largest companies of its kind in the world, is facing one of the largest fines in history.
The UK Gambling Commission (UKGC) could impose a fine between £15 million (US$17.81 million) and £20 million (US$23.75 million) on William Hill, according to reports from The Daily Mail. That could surpass the £17 million (US$20.19 million) fine Entain received last year.
The fine results from violations within the scope of “social responsibility and anti-money laundering obligations.” One source told the media outlet the fine against William Hill could be “north of £20 million.”
888 has reportedly already set aside money to cover the fine. But the fine would be a massive blow to the company. 888 may drop off the FTS250 index this month, a stock market index containing 250 UK-based mid-market cap companies listed on the London Stock Exchange.
Since September 2021, its share price has fallen by 85%.
888 bought William Hill last summer from Caesars for £2 billion (US$2.37 billion). Its portfolio includes online casinos and more than 1,000 retail sports betting points.
Running with Trouble
This isn’t the British operator’s first run into trouble. In January, an investigation began into accounts of VIP customers from the Middle East about suspected money laundering.
888 determined that many of its betting whales could deposit and withdraw massive sums of money with virtually no oversight. As a result of the scandal, CEO Itai Pazner immediately stepped down after more than 20 years with the company. Lord Mendelsohn, 888’s chairman, will act in the position until the board finds a permanent replacement.
Its current CFO, Yariv Dafna is also planning to step down.
888 will release a new financial report at the end of March.
More Trouble on the Horizon
Austria’s supreme court has also recent found the company guilty of operating illegally in the country. It argues 888 and Flutter have been offering their services in Austria. Casinos Austria is the only company licensed in the country.
The court determined that users could file claims with 888 and Flutter to receive reimbursement for their losses. The Financial Times reported a few days ago that more than 2,500 users had received more than €75 million (US$79.31 million) in compensation from several operators since January.
888 and Flutter also reportedly owe around an additional €34 million (US$35.95 million), which they allegedly withhold as they fight Austria.
On two occasions since 2017, 888 has had to pay regulatory fines in the UK. Those amounted to £17.2 million (US$20.5 million) in just two penalties, and it doesn’t look like the company will close its checkbook anytime soon.
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