UK-based online gambling firm 888 Holdings Plc is currently facing a regulatory review after FS Gaming acquired a 6.6% stake in the company. The regulatory review was prompted by FS Gaming's investment as well as their proposal to make significant changes to 888's management team, including appointing a new chairman, CEO, and CFO. The news of the review caused a sharp decline in 888's share price, dropping as much as 26% following the announcement.
Details regarding the specific concerns of the regulatory review have not been disclosed. The Gambling Commission, which is responsible for overseeing the gambling industry in the UK, has declined to comment on the investigation or confirm whether 888 is under investigation. However, the review could potentially result in suspensions or fines for the company.
As a result of the license review, 888 has terminated discussions with FS Gaming regarding the proposed management appointments. The proposed appointments included Kenny Alexander as CEO, who has ties to FS Gaming and previously held senior positions at GVC, which has since been renamed Entain Plc.
Entain, the parent company of GVC, is currently involved in negotiations with the Crown Prosecution Service regarding a deferred prosecution agreement related to a bribery investigation in its Turkish business.
In addition to the regulatory review, 888 is also facing a separate probe into possible money-laundering breaches in its Middle Eastern VIP accounts. The company's CEO stepped down earlier this year amidst the ongoing investigation.
Despite the challenges, 888 is continuing its search for a new CEO and is reportedly finalizing an appointment. The company's chairman, John Mendelsohn, stated that the engagement with FS Gaming has temporarily interrupted the search process, but they are now focused on finding a new leader for the company.