The investment vehicle of former GVC Holdings executives will retain 4.55 per cent of the London-listed gaming operator.
UK.- FS Gaming Investments, which is controlled by three former GVC Holdings executives, is to give up its voting rights in UK-listed gaming group 888 Holdings. The fund has announced that it will reduce its stake from 6.57 per cent to 4.55 per cent.
FS Gaming Investments’ founders include former GVC CEO Kenny Alexander. His successor at GVC (now Entain), Shay Segev (now CEO of DAZN), granted FS Gaming voting rights attached to his 9,063,313 ordinary shares of 888.
However, an attempt by FS Gaming to install Alexander as 888 CEO, along with former GVC chairman Lee Feldman and director Stephen Morana as chair and CFO, was abandoned after the Gambling Commission warned that 888 could lose its British gambling licence to an ongoing investigation of GVC’s involvement in alleged historic instances of bribery related to third party suppliers in Turkey.
The move would have required Gambling Commission approval because it would have taken FS Gaming’s stake in 888 beyond the 10 per cent threshold that would trigger a change of corporate control. 888 has named Per Widerström as CEO instead.
Entain has since announced that it expects to pay £585m in a settlement related to the allegations of bribery involving the former Turkish operation. The company expects to make the payment over a four-year period in a deferred prosecution agreement with the Crown Prosecution Service (CPS).
The operator had announced in May that it faced an HMRC investigation over the matter. The resolution still requires judicial approval, which Entain expects the HMRC to seek in Q4 2023. It said that it expects to be given “full credit for its extensive co-operation with the investigation prior, and subsequent, to entering into any DPA”.
Entain chair Barry Gibson said: “We are pleased to be making good progress towards drawing a line under this historical issue, which relates to a business that was sold by a former management team of the group nearly six years ago.
“We have been working closely with the CPS throughout this process and they have recognised our extensive co-operation. Following a complete overhaul of our business model, strategy and culture in the last few years, the Entain of today bears no resemblance to the GVC of yesterday.”
Meanwhile, 888 has announced that it has reached a settlement agreement in Gibraltar under which it will pay £2.9m as a result of the compliance failings in the Middle East that led to the resignation of former CEO Itai Panzer earlier this year.
The Gibraltar Gambling Commissioner had identified historic failings in know-your-customer (KYC) requirements on VIP accounts. It also noted overly high thresholds for enhanced due diligence (EDD) intervention and a lack of clarity and consistency in the checks. Other failings included an over-reliance on open-source checks to prove sources of funds.