The Gambling Commission initiated its review in the wake of FS Gaming acquiring a 6.57% stake in the business last month, which was followed by a proposal for a trio of former Entain executives to take charge.

Alexander would have been named chief executive under the proposal, with former Entain chair Lee Feldman taking on the same role at 888, and Stephen Morana becoming its chief financial officer.

Basic assurances ‘not forthcoming’

As a result of the ongoing investigation into Entain’s former Turkish business, the regulator expressed concerns over this arrangement, requesting regular updates from 888 on the matter.

When Entain updated the market on Her Majesty’s Revenue and Customs’ (HMRC) investigation into the Turkish business, it noted historical misconduct involving former third party suppliers and former employees may have occurred.

While 888 asked FS Gaming to provide clarification on the issues raised by the Gambling Commission, “the most basic assurances that addressed these concerns were not forthcoming”.  

888 said that a combination of the Commission’s licence review, its own due diligence and “publicly available information” meant that the appointments proposed by FS Gaming had “no reasonable prospect of being approved”.

It added that any attempt by FS Gaming to action corporate control could jeopardise 888’s current UK licence conditions, putting it “at immediate and significant risk”.

888 chair: We will cooperate fully with GC investigation

“We will be fully cooperating with the GBGC’s Section 116 (2)(c)(ii) review, arising from potential issues with respect to FS Gaming’s investment and Proposal, and look forward to bringing the review to a conclusion expeditiously,” 888 executive chair Lord Mendelsohn said.

The board had no option but to terminate discussions with FS Gaming, he explained, as it “simply could not put licences in our largest market at significant risk”.

“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,” Mendelsohn added.

“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.”

Investigation begins

The Commission confirmed its considerations in a letter to the 888 board, detailing the basis of the investigation.

The Commission told the board that it must assess what roles relevant individuals may have played during the period being addressed by the HMRC investigation into Entain.

The regulator also emphasised that it does not have to wait until legal proceedings conclude to revoke or suspend operating licences. It also “strongly recommended” that 888 consider the Commission’s considerations before acting.