The future of online betting group 888 Holdings, which owns William Hill, has been cast into uncertainty as its license to operate in the UK comes under review by the UK Gambling Commission (UKGC).
Former GVC Executives’ Proposed Appointments Trigger Investigation into 888
The three individuals, Lee Feldman, Kenny Alexander, and Stephen Morana, had previously held senior roles at GVC Holdings (now Entain plc). Their proposed appointments as Chair, CEO, and CFO, respectively, were at the core of the discussions. However, concerns were raised about their connections to ongoing investigations into alleged bribery offenses involving Entain.
Entain had admitted to being in talks with the Crown Prosecution Service regarding a deferred prosecution agreement. The investigation includes a review of its former Turkish-facing business and potential misconduct involving former third-party suppliers and employees. The UKGC sought clarification from 888 Holdings regarding these concerns but found the assurances provided by FS Gaming, the investment group backing the proposed appointments, to be inadequate.
As a result, the Commission has decided to initiate a review of 888 Holdings’ operating licenses under Section 116(2)(c)(ii) of the Gambling Act 2005. The review could lead to various outcomes, such as immediate suspension, revocation of licenses, or the imposition of financial penalties. The Commission emphasized that it has the authority to reject any change of corporate control that poses a risk to the company’s licenses.
888 Holdings Vows Full Cooperation with UKGC Review
Following the termination of discussions, Lord Mendelsohn, Executive Chair of 888 Holdings, expressed the company’s commitment to cooperating fully with the review. The Board of 888 Holdings is also finalizing the appointment of a new CEO and expects to make an announcement soon. Despite the regulatory challenges, Mendelsohn assured stakeholders that the business remains focused on delivering its strategy and meeting market expectations for 2023.
The intervention by the UKGC has had a significant impact on 888 Holdings’ share price, causing a decline of over 25%. Shareholders and investors are closely monitoring the situation, as the review of the company’s operating licences could have far-reaching consequences.
FS Gaming, the investment group behind the proposed leadership appointments, expressed surprise at the termination of discussions and stated its intention to continue efforts to maximize the value of its stake in 888 Holdings. The group acquired a stake of 6.6% in the company at the beginning of June. FS Gaming was not the only company that saw potential in 888 Holdings. Activist investment group HG Vora also upped its stake in the company to 5.5% in June.