The United Kingdom Gambling Commission (UKGC) has fined three gambling companies under the William Hill Group (WHG) a total of £19.2 million ($23.8 million in today’s exchange rate) due to alleged social responsibility and anti-money laundering failures. The fine is the largest enforcement payment in UKGC’s history.
WHG International Limited will pay £12.5 million ($15.5 million), Mr. Green Limited will pay £3.7 million ($4.6 million), and William Hill Organization Limited will pay £3 million ($3.7 million).
UKGC decided not to suspend the licenses of these companies. It reasoned that they immediately recognized their alleged failings and cooperated in implementing improvements.
What Were the Alleged Compliance Failures?
William Hill’s alleged failures include many responsible gambling policies. That includes alleged insufficient controls to protect new customers, UKGC claiming it didn’t identify customers at risk of gambling-related harm, and allegedly allowing large deposits without proper checks. The company is also accused of failing to block hundreds of customers who have self-excluded from other websites within the company’s umbrella.
UKGC will use all £19.2 million for socially responsible purposes as part of a regulatory settlement. UKGC will also impose additional license conditions to ensure improvement and third-party audits.
888 Bought William Hill’s Non-US Assets In 2022
Many US players may recall that Caesars Entertainment (Caesars Entertainment 46,75 +4,54%) acquired William Hill for $3.7 billion in 2021. However, Caesars opted to retain only the US operations and to sell the international unit.
In 2022, 888 Holdings – the parent of 888 Casino – agreed to buy the William Hill Group for £1.95 billion ($2.6 billion at the exchange rate at the time). It’s estimated that Caesars Entertainment netted about $730 million in proceeds from the transaction. Meanwhile, 888 Holdings assumed £1.76 ($2.16 billion) in debt to finalize the deal.
We could say that there was a contrast in fortunes from the deal. Caesars netted a large sum, while the agreement intensified the challenges faced by 888 Holdings.
The Fine Is Yet Another Setback For 888 Holdings
The gaming company has been rocked with troubles in recent times. 888 Holdings CEO Itai Pazner resigned on Jan.30. That came after investigating compliance failures in the Middle East, resulting in the latest alleged compliance failure under Pazner’s management.
The first one dates back to 2017, when the company was fined £7.8 million ($9.7 million) for alleged responsible gaming failures. The fine was the highest UKGC had ever issued. Also, in 2022, 888 Holdings was fined £9.4 million ($12 million) for alleged violations of social responsibility and anti-money laundering.
The multiple compliance failures and the debt acquired from the Williams Hill deal have resulted in 888 Holdings’ stock plummeting. It dropped 29% on the day of Pazner’s resignation and, at the time of writing, is down 40%, year-to-date. Also, the stock has fallen 72% in the last year, while for the previous five years, it has plummeted 81%.
That has resulted in 888 Holdings losing its place in the FTSE 250 index for the London Stock Exchange (LSE). The FTSE 250 comprises the 101st to 350th largest companies listed on LSE.
Will the William Hill Fine Hurt 888 in the US?
In the US, 888 Holdings runs 888 Casino while supplying WSOP and SI Sportsbook technology. So far, the financial and operational troubles of the company haven’t seemed to affect the US operations. After gaining a casino license in Michigan, the company launched the new SI Casino in February.
But elsewhere, it risks losing market share. 888 Holdings is the technology provider for the Delaware Lottery. That license is up for renewal this year. It’s possible the state will go a different route, given 888 Holdings’ recent performance.
Unibet Casino & Sportsbook Parent Got Large UKGC Fine
Kindred Group, the parent company of Unibet Casino, has received a £7.1 million ($8.8 million) fine from the UKGC for alleged social responsibility and anti-money laundering failures, similar to William Hill’s.
This development comes only several months after the allegations from the Norwegian gambling authority, which accused Kindred of operating an offshore site within the country. The Norwegian agency imposed a fine of up to $42 million per year, which Kindred believes is illegal and is appealing.
The resolution of the situation in Norway and the UKGC fine could potentially hinder Kindred’s ambitions to expand Unibet’s presence and competitiveness in the US. The online casino operates in New Jersey and Pennsylvania, while the sportsbook is live in six states.