William Hill owner 888 warns of licence review due to regulator's concerns with investment group

Shares in William Hill parent company 888 crashed on Friday afternoon after it was revealed that the purchase of a stake in the firm by an investment group including gambling industry heavyweight and racehorse owner Kenny Alexander had led to the Gambling Commission initiating a review of its licence.

888 also said it had rejected proposals from the group that would have led to Alexander being installed into the vacant position of chief executive at the company.

Last month it emerged that New York-based FS Gaming Investments had built up a near 6.6 per cent shareholding in 888, leading to a jump in 888's share price.

Aside from Alexander – the former chief executive of GVC Holdings (now Entain, owner of Coral and Ladbrokes) whose racing colours have most famously been carried by dual Champion Hurdle winner Honeysuckle – other gambling industry figures involved in FS Gaming include former GVC chairman Lee Feldman and Stephen Morana, a former Entain board member and chief financial officer of Betfair.

It subsequently emerged FS Gaming was pushing the 888 board to appoint Feldman as chair, Alexander as chief executive and Morana as chief financial officer.

However, doubts remained due to the ongoing investigation by HM Revenue & Customs (HMRC) into GVC's former online gambling operation in Turkey, which Entain has said could lead to a substantial fine.

Kenny Alexander (centre) had been proposed as 888's new chief executiveCredit: John Grossick (racingpost.com/photos)

That investigation emerged in 2020, shortly after Alexander's departure from GVC.

888 said in a statement it had contacted the Gambling Commission (GBGC) in relation to FS Gaming's stake in the company and had been told the industry regulator had concerns regarding the HMRC investigation into GVC’s activities, "covering the time the individuals proposed to the board by FS Gaming were in senior leadership positions at GVC".

The statement added that 888 requested clarification from FS Gaming over the commission's concerns, "but the most basic assurances that addressed these concerns were not forthcoming".

The Gambling Commission has now told 888 it has decided to begin a review of the group's operating licences in light of FS Gaming’s investment and its proposal, a review which could lead to its licences being suspended or revoked or a fine being imposed.

888 said its board had therefore unanimously decided to terminate discussions as the appointments FS Gaming had proposed "have no reasonable prospect of being approved by the GBGC at this time and any actions by FS Gaming to effect a change of corporate control would likely put the group's licences to operate in the UK at immediate and significant risk".

Following the news, 888 share's price plunged and closed on Friday down by 25.12 per cent at 79.6p.

888's executive chairman Lord Mendelsohn said the company would be fully cooperating with the review.

He added: "As a board we devoted significant time to considering FS Gaming's proposal. However, following in-depth regulatory due diligence including engaging closely with the GBGC, the board had no option but to terminate discussions as it simply could not put licences in our largest market at significant risk."

888 has been without a permanent chief executive since the abrupt departure of Itai Pazner in January.

Lord Mendelsohn added: "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."

In response to the news, a spokesman for FS Gaming said: "We were completely surprised by 888's statement and perplexed by how the company has orchestrated this as we remain relatively small public shareholders with no access to any non-public information and we were engaged in dialogue regarding the best strategy to maximise the value of these world-class assets. We will continue those efforts."

A Gambling Commission spokesperson said the regulator would not discuss individual operators.

The spokesperson added: "In general, if any operator requests information on existing regulations then we will provide that as part of our drive to make gambling fair, safe and crime-free."

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