888 Holdings drops Kenny Alexander proposal amid Gambling Commission review

The British gambling regulator warned that 888 could lose its licence if it made Kenny Alexander CEO.

UK.- 888 has ditched a proposal for former Entain CEO Kenny Alexander to become its new CEO. The British Gambling Commission warned that the William Hill owner could lose its licence over the move due to an ongoing investigation of possible bribery at GVC Holdings (now Entain) when Alexander was CEO.

FS Gaming, an investment vehicle with backing from Alexander, acquired a 6.57 per cent stake in the business. It had proposed Alexander as 888 CEO along with other former Entain execs Lee Feldman as chair and Stephen Morana as chief financial officer. Such a move would probably take FS Gaming’s stake in 888 above 10 per cent, representing a change in corporate control needing approval from the Gambling Commission.

However, the regulator began an investigation of 888’s licence as a result and noted that it would have to revoke 888’s licence if it decided to accept the executive appointments. The commission noted an ongoing investigation into Entain’s (then GVC) former Turkish business Headlong by the HM Revenue and Customs. It said that since FS Gaming had failed to provide “the most basic reassurances” about its concerns, it had begun an investigation under Section 116 (2)(c)(ii) of the Gambling Act 2005.

FS Gaming has dropped its proposed appointments, recognising that there is “no reasonable prospect” of them being approved and that 888’s British gambling licences would be at risk. 888 executive chairman Lord Mendelsohn said the company would cooperate with the Gambling Commission’s review.

He said: “While this engagement temporarily interrupted the very thorough search process to appoint a new CEO, the board is finalising its appointment and expects to make an announcement in the very near future.

“The board remains firmly focused on delivering the group’s clear strategy to unlock shareholder value and I’m pleased to confirm that the business remains on track to deliver market expectations for 2023 adjusted EBITDA.”

Entain remains in deferred prosecution agreement negotiations with the Crown Prosecution Service with regards to the investigation of its former Turkey business, which GVC sold to Ropso Malta in 2017. It’s being investigation for offences under the Bribery Act 2010, and Entain has accepted that there may have been historical misconduct involving former third-party suppliers and employees.

In the meantime, 888 must continue to search for a new CEO following Itai Pazner’s departure in January. It has suspended its VIP business in the Middle East after an internal compliance review identified AML and KYC failings.

In June, 888 Holdings announced the completion of the sale of Its Latvian business, MrGreen.LV and WilliamHill.LV. It has sold the Latvian operations to Paf, the gambling operator owned by the regional government of Finland’s Åland Islands, for €28m.

Meanwhile, William Hill UK has reported its first annual results since its acquisition by 888 Holdings last July. Revenue was down by 0.5 per cent year-on-year at £1.24bn. Land-based revenue growth of 52.7 per cent to £514.2m largely offset a 19 per cent decline in UK online gambling revenue (£509.1m).

The rise in retail revenue was attributed to the return to normal trading following the end of Covid-19 countermeasures. Meanwhile, William Hill said the decline in online revenue was due to a combination of the return of retail operations and enhanced customer safety checks in advance of the recent UK gambling white paper.