888's Subsidiary Settles with Gibraltar Gambling Commissioner for £2.9m Over Middle East VIP Failing
888's subsidiary, Virtual Global Digital Services Ltd, has reached a settlement of £2.9 million (€3.4 million/$3.7 million) with the Gibraltar Gambling Commissioner concerning failures related to VIP operations in the Middle East.
The Commissioner identified several weaknesses in 888's compliance approach, including ineffective know your customer (KYC) obligations and an overreliance on high thresholds for enhanced due diligence (EDD) checks. Other issues included inconsistency in account handling and reliance on open-source checks without requesting source of funds and source of wealth documentation.
The investigation led to the suspension of Middle East VIP activities and the resignation of Itai Pazner as CEO of the 888 parent group. Despite the case's focus on the Middle East, the review aligned with the Gibraltar Commissioner's agreement, as 888 operates from Gibraltar despite its global presence.
888 has since implemented new policies and procedures to prevent similar issues and conducted an updated risk assessment for relevant accounts. The Commissioner's decision took into account 888's self-declaration, suspension of impacted accounts, and the prompt launch of an internal compliance review.
In the absence of a financial sanction, the regulatory settlement of £2.9 million was agreed upon, with part of the sum going to the Centre of Excellence for Responsible Gaming at the University of Gibraltar.
The news of the settlement coincided with 888's first-half results for 2023, showing a 6.5% pro forma revenue decline to £881.6 million due to online segment decline offsetting retail growth. Pro forma results factored in the acquisition of William Hill's non-US assets for £1.95 billion.
888's executive chair, Lord Jon Mendelsohn, emphasized the impact of compliance and sustainability initiatives, highlighting their fundamental role in building the business amid regulatory risks.
By fLEXI tEAM