888 CEO resigns amid investigation into Middle East VIP accounts

Online gambling giant 888 has announced the exit of its chief executive, Itai Pazner. The company broke the news while disclosing that a number of its VIP accounts in the Middle East had been suspended pending the results of an internal compliance investigation.

888’s CEO stepped down just weeks after the betting company revealed that Yariv Dafna, its chief financial officer, had “mutually agreed” to resign from his position after the firm posted a fall in revenue. Although Dafna was to leave his office by the end of March, 888 said that the executive would stay on until the end of 2023.

Pazner has been a part of 888 for 20 years and assumed the CEO position four years ago. The company announced to its shareholders that the resignation was with immediate effect. While 888 scouts for a new CEO, British Labour peer Lord Mendelsohn will temporarily occupy the executive chair position.

In a separate statement, the online gambling company disclosed that after an internal compliance review, it was discovered that “certain best practices” were not adhered to. This includes knowing “client and anti money laundering processes for 888 VIP customers in the Middle East region”.

In response, 888 suspended the affected VIP accounts pending the results of the internal inquiry. The company revealed that there were ongoing internal investigations and that the suspensions impacted only 3% of its revenue, which is around £50 million. 888 also emphasized that the process deficiencies only involved the Middle East.

“While further internal investigations are underway, the board has taken the decision to suspend VIP customer accounts in the region, effective immediately,” 888’s statement read.

“The board currently estimates that the impact is less than 3% of group revenues, should the suspensions remain in place.”

On Monday, the Gibraltar-headquartered gambling group’s shares plummeted 24% after the announcements. This is after an almost 70% plunge over the past year due to reduced online gambling post-pandemic. It can also be linked to investor caution after 888’s takeover of William Hill’s European operation outside the United States. This placed the company in considerable debt.

Pazner had overseen William Hill’s £1.95 billion acquisition, which included approximately 1,500 betting shops.

“The board and I take the group’s compliance responsibilities incredibly seriously. When we were alerted to issues with some of 888’s VIP customers, the board took decisive actions,” Mendelsohn said.

“We will be uncompromising in our approach to compliance as we build a strong and sustainable business.”

The UK Gambling Commission issued 888 a £9.4 million fine last year for neglecting its social responsibility and anti money laundering duties.

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