888 CEO steps down due to compliance issues in the Middle East market
Online gaming giant 888 Holdings has parted ways with Chief Executive Officer Itai Pazner, with immediate effect. A recent internal review has shown several shortcomings regarding AML & KYC procedures for players in the Middle East. As a result, the VIP scheme in this market has been suspended until an official investigation is carried out.
Following the news, the 888 shares have plunged by 26.6%, the biggest drop since 2006, before bouncing back a little. Until a new CEO is appointed by the board, Lord Mendelsohn will act as an interim executive chair.
A split after 20 years
Pazner joined 888 almost two decades ago, and he rose through the ranks, eventually becoming the group's CEO in 2019. As the top executive, he was at the helm in critical moments like the acquisition of the international operations of William Hill in 2021. Moreover, he worked on the expansion of 888 in the US and Canada.
“On behalf of the board I would like to thank Itai for his significant contributions to the business over more than 20 years, including the last four as CEO”, Mendelsohn stated.
“Itai has played a very important role in building a business with powerful proprietary technology and has overseen successful early stages to the William Hill integration process, and we wish him well in his future endeavors” the interim CEO concluded.
888 to address all AML & KYC issues
According to a regulatory statement on Monday, together with the departure of Pazner, 888 Holdings also added that it suspends VIP activities for players in the Middle East. The official reason given, is that several Anti-Money Laundering and Know Your Customer procedures were not followed in these markets and an investigation is underway.
If the restrictions remain, then the impact will be around 3% of 888's total revenue. Some concerns were raised about compliance failures in other markets as well, but 888 has denied that and said that they are only limited to the Middle East. Jonathan Mendelsohn also added that the group takes compliance responsibilities incredibly seriously and will be uncompromising in that aspect.
On a similar note, another departure was declared earlier in the month, as Chief Financial Officer Yariv Dafna, was about to step down on March 31. However, in the wake of recent news, the group reported that he will remain in his position until the end of 2023.
It is also worth noting that 888 has decided to lay off a significant number of employees from the office in Tel-Aviv in order to cope with higher costs of regulation and KYC.
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