The operating permit of 888 Holdings is being reviewed by the UK Gambling Commission (UKGC) after the company announced that its discussions with proposed former GVC Holdings executives have been terminated over concerns over investigations of some bribery allegations.
Recent reports of 888 Holdings’ licence review by the UK gambling regulatory body have made the future of the online gambling and sports betting group look uncertain.
The three individuals involved in the bribery investigation – Kenneth Alexander, Lee Feldman, and Stephen Morana, had previously occupied senior executive roles at GVC Holdings, now operating as Entain Plc. Their proposed appointment as Chief Executive Officer, Chair, and Chief Financial Officer, respectively, caused the discussions, with some concerns regarding their association with an ongoing probe into alleged bribery offences involving Entain also being raised.
Entain itself had admitted that it has been in talks with the Crown Prosecution Service in regard to a deferred prosecution agreement. As part of the probe, it has faced a review of its former Turkish-facing unit and has been investigated for alleged misconduct involving former third-party suppliers and employees.
The UK Gambling Commission has turned to 888 Holdings for some clarification of these concerns. However, the regulatory body found categorised the assurances provided by the investment group backing the three aforementioned appointments, FS Gaming, to be inadequate.
The Proposed Appointments of Three Ex-GVC Holdings’ Executives Causes Regulatory Concern over Alleged Bribery
As a result of the ongoing concerns, the UKGC has decided to start a review of 888 Holdings’ operating licences under the provisions of Section 116(2)(c)(ii) of the country’s Gambling Act 2005. The gambling industry watchdog has warned that the investigation could lead to various outcomes, including financial penalties, immediate suspension, and could even see the online gambling business’ licences revoked. Apart from that, the UK Gambling Commission also highlighted the fact that it is empowered to reject any change of corporate control that poses a risk to the company’s operating permits.
After the discussions with the proposed former GVC Holdings executives were terminated, the Executive Chair of 888 Holdings – Lord Mendelsohn – shared that the online gambling operator intends to continue cooperating with the regulator’s review in full. The company’s Board of Directors is also finalising the process of the appointment of a new CEO and expects to be able to make an official announcement soon. Despite the regulatory challenges, Lord Mendelsohn proceeded to assure 888 Holdings’ shareholders that the company is still on track to delivering its strategy and meeting its market goals for 2023.
Unfortunately, the regulatory probe initiated by the UK Gambling Commission has had a significant negative impact on the share price of 888 Holdings, as it triggered a share price decline of more than 25%. As a result, the company’s investors and shareholders are closely monitoring the situation because the operating permit’s regulatory review could have even more severe consequences for the business.
The investment group that supported the proposed leadership appointments, FS Gaming, has noted it was surprised at the termination of discussions. It also shared it intended to continue making an effort to boost the value of its existing stake in 888 Holdings. Early last month, the group acquired a 6.6% stake in the company. It, however, has not been the only company seeing further potential in the business, because the activist investment group HG Vora also boosted its 888 Holdings stake to 5.5% in June 2023.
- Author
Olivia Cole
