Gambling Share Prices and Money Laundering: What Happened to 888’s VIP Gamers?

The cost of a gambling company either knowingly or accidentally engaging with money laundering activity was laid bare this week following the dramatic crash in gambling share prices for global brand 888 Holdings.

888, the 16th biggest gambling firm in the world according to Yahoo!, saw its share price plummet on Monday by more than 25 percent. It was found 888 had failed to follow best practices in anti-money laundering (AML) and know-your-customer (KYC) regulations.

The stock plunge came as the Gibraltar-based company removed chief executive Itai Pazner and “launched an investigation into failures to correctly follow anti-money laundering processes on VIP customer accounts,” reports the FT.

In a statement 888 said “best practices have not been followed”.

The firm has since suspended a number of VIP customer accounts based in the Middle East, which affects up to 3 percent of the group’s revenues – or roughly £50m.

888 Gambling Share Prices Fall

888 is no small name on the global gambling landscape. The firm is listed on the London stock exchange and has brands across Europe, North America and Asia. Its successful online casino and sportsbook presence has previously made it a strong brand for investors and the company has tended to trade well on the stock market.

That was until 2022, when 888 shares began to fall. In March the UK Gambling Commission (UKGC) fined 888 £9.4m after an investigation “revealed social responsibility and money laundering failings”.

That was the second time the company had been fined. In 2017 it was hit with a £7.8m penalty for failing vulnerable customers.

The gambling stocks at 888 haven’t recovered since falling by 20 percent in March 2022. Fast-forward to this January and this latest fine means the firm’s share price is now lower than it was in March 2020 when the UK announced its Covid-19 lockdown and the global economy began to shrink.

888 Share Price Timeline

• September 2021: Share price 458.00p – Record high share price
• March 2022: Share price 187.20p – £9.4m fine from UKGC
• June 2022: Share price 160.70p – Revenue forecast drops after William Hill acquisition
• January 2023: Share price 70.00p – Shares plunge as CEO quits after money laundering failures

Relationship Between VIP Gambling and Money Laundering

Investors and bettors are therefore right to question why 888 keeps getting into hot water. In this latest instance, the firm insists that the money laundering failures in the Middle East were “isolated” in that region. But CEO Pazner has now departed, following the exit of 888’s finance chief Yariv Dafna.

In a statement, 888 chair Lord Jonathan Mendelsohn said: “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. We will be uncompromising in our approach to compliance as we build a strong and sustainable business.”

Being seen to act swiftly on suspected money laundering is the natural step for any betting company or casino caught in the media spotlight. But it’s rarely enough to prevent investors from questioning their investments.

The problem for casinos and sports betting firms is that they’re susceptible to money launderers. Players can open VIP accounts and top them up with thousands of pounds, before withdrawing – sometimes into a different bank account. Betting firms have systems in place to trigger suspicious VIP gambling activity but it’s still not easy to track.

The main system UK firms use in this instance is a Source of Funds (SOF) check. This is meant to prevent criminals from dumping cash in betting accounts. In March the UKGC found 888 had allowed players to deposit as much as £40,000 before SOF checks.

There is no suggestion this is what happened in the recent instance with 888, but is instead an example of how easily money can be laundered if criminals find the right passage to go down.

What happens next at 888 remains to be seen. The firm could choose to maintain the suspension on the aforementioned Middle East accounts as it only amounts to 3 percent of group revenues. But 888 needs stability after spending £1.95bn to buy the European arm of William Hill off Caesars Entertainment, and its gambling share prices are still falling.

This debt pile needs to be reduced and investors may well begin to pressure 888 into addressing it. After all, 888 has debts nearly five times that of its market valuation – and further raps from the UK authorities won’t aid the company’s progress.

Gamble at Safe Casinos

All this to say 888 is not a bad casino. Quite the contrary. In fact, it remains one of the top-rated casinos here at TMC, with an overall rating of 3.8/5. It specialises in a great range of bonuses and promotions, and a customer with an 888 Casino account can use it on 888 Bingo and 888 Sports betting too.

Here at TMC we only feature reviews of safe, legal casinos. When it comes to money laundering no casino is 10 percent secure, but the vast majority adhere to the UKGC’s guidelines and guarantee player account safety.

So if you’re looking to play mobile slots at a trusted casino, check out our reviews today!