888 Plunges as Regulator Reviews Problem-Gambling ControlsBy
U.K. Gambling Commission probes social responsibility measures
Shares slide as much as 10% as company may face penalty
Online betting operator 888 Holdings Plc plunged in London after regulators started investigating the company’s U.K. business over its compliance with rules to prevent problem gambling.
A review by the U.K. Gambling Commission will assess whether 888 operates an effective self-exclusion process for gamblers that want to take a breather, the company said in a statement Monday. The announcement comes about 18 months after the regulator ordered online gaming companies to let customers temporarily suspend their accounts by clicking on a website link, rather than having to contact a call center.
888 shares fell as much as 10 percent, the most since June 2016 on an intraday basis. They were down 7 percent at 10:35 a.m. in London.
The U.K. is stepping up scrutiny of online gambling companies’ social responsibilities, last year reaching settlements with companies including Paddy Power Betfair Plc, Betfred and Gala Coral. Should 888 be found to have breached rules, possible punishments include a fine, or in a worst-case scenario, the revocation of its license, Canaccord Genuity analysts said.
“This would be an unprecedented action,” the analysts said in a note.
888, which operates online poker, sports betting and other gaming, said it was cooperating with the commission’s review.
According to Peel Hunt analysts, the most likely outcome is a fine and some change in business practices.
“It appears this public process is now the commission’s preferred way of regulating the gambling industry and fines and bad publicity are part of the cost of doing business,” the analysts said in a note.