888 avoids any regulatory punishment following licence review
London-listed operator’s shares initially jump 7% following announcement of the conclusion of Gambling Commission’s probe
888 has revealed that the UK Gambling Commission (GC) will not issue any “licence conditions, financial penalties or other remedies” following the conclusion of the regulator’s review of the operator’s licence.
Following the news of no regulatory action, 888 shares leapt 7% on the London Stock Exchange before settling back to around 89p at the time of writing.
The GC announced that it would be reviewing the operator’s licence in July 2023, following the news that investment vehicle FS Gaming, backed by former Entain (then GVC) chiefs including ex-CEO Kenny Alexander, had acquired a 6.57% stake in 888, which owns William Hill and Mr Green.
FS Gaming then proposed that Alexander become the new CEO of 888. The proposal also put forward the appointmentof Lee Feldman to become chair and Stephen Morana CFO.
However, 888 then said it was in discussions with the gambling regulator regarding FS Gaming’s proposal and stake in the business as the regulator had concerns about the potential deal
Concerns were raised by the GC over the ongoing investigation by HMRC into GVC’s historical operations in a Turkish business sold in 2017, which occurred when the aforementioned trio were in situ at the operator.
Entain has since settled the case with the Crown Prosecution Service, with Entain agreeing to pay a settlement totalling more than £600m. As part of its deferred prosecution agreement, the operator has agreed to repay profits totalling £585m while also making donations to charity worth £20m and a further contribution of £10m to repay costs incurred during the investigation.
888’s licence was placed under review in accordance with Section 116 (2)(c)(ii) of the Gambling Act 2005, which states that the regulator can review any matter connected with the provision of facilities for gambling as authorised by an operating licence if the GC “for any reason thinks that a review would be appropriate”.
The GC’s review examined FS Gaming’s investment in 888 and the proposal put forward by FS Gaming to appoint new personnel to the operator’s management team.
On commencement of the review in July, 888 concluded that FS Gaming’s proposed appointments had “no reasonable prospect of being approved by the GC at this time” and therefore 888’s board unanimously decided to terminate the discussions with FS Gaming.
Six months on, 888 released a statement this morning, 22 March, stating that the GC would not be taking any regulatory action against the business.
The statement said: “The Commission has concluded the licence review without imposing any licence conditions, financial penalties or other remedies on the group after being satisfied that the risk to the licensing objectives under the Gambling Act that led to the review have been appropriately managed and adequately mitigated.”
In response to the operator’s statement and in response to a request for comment by EGR, the GC said: “In June 2023, the Gambling Commission was informed by 888 of the intention to put in place a new management team by some of their recent shareholders. This new team had formed the core of the management team previously in place at GVC, and this proposal would necessitate both a Change of Corporate Control application as well as a series of Personal Management Licence applications.
“The individuals proposed were also in key control functions at GVC during the period investigated by HMRC for potential bribery offences.
“Given this position, the GC raised a series of questions with regard to the risks and appropriateness of the proposals. We remained unsatisfied with the responses to these questions and so instigated a s.116 review of the licence on the grounds that we believed it was appropriate to do so in all the circumstances.
“We understand from 888 the management proposals put forward by the new shareholders are no longer being pursued and have not been for some time.
“As a result of this, alongside wider assurances provided as to those involved in the management of the operator, it has not been necessary for the Commission to make any determination in this case or to make any assessment of the suitability of the proposed individuals, and we have therefore discontinued the review of 888 Holdings’ licence to operate with no further action required.”