The Gibraltar Gambling Commissioner has announced a £2.9 million regulatory settlement with 888 Holdings subsidiary Cassava Enterprises following an investigation into historical compliance issues.
Compliance Weaknesses Unveiled:
The regulatory review revealed several shortcomings in 888’s historical compliance approach, including:
Ineffective Know Your Customer (KYC) procedures that failed to adequately record and verify customer address details in specific cases.
Overreliance on high thresholds for Enhanced Due Diligence (EDD) without sufficient clarity and consistency in their application.
An inconsistent approach to account management, including open accounts with restrictions versus account closures.
Overreliance on open-source checks, neglecting to request customers to provide source of funds and source of wealth documentation.
Middle Eastern VIP Scandal and CEO Resignation:
The compliance investigation was prompted by issues related to 888’s VIP customers in the Middle East.
Itai Pazner, the CEO of 888’s parent group, was removed from his position due to non-compliance with KYC and anti-money laundering (AML) processes in the Middle East.
While the case was specific to the Middle East, the review was conducted in conjunction with the Gibraltar Commissioner, given 888’s Gibraltar headquarters.
Remedial Measures and Risk Assessment:
In response to the compliance review, 888 implemented new policies and procedures to prevent similar issues in the future.
Relevant accounts underwent an updated risk assessment process to enhance compliance.
No specific instances were identified involving 888 dealing with the proceeds of crime or terrorist financing.
Regulatory Settlement and Allocation:
Instead of a financial penalty, the Gibraltar Commissioner reached a regulatory settlement of £2.9 million with the 888 subsidiary.
Part of the settlement will contribute to the Centre of Excellence for Responsible Gaming at the University of Gibraltar.
Gibraltar licensees are urged to integrate lessons from this case into their risk assessments, systems, and controls.
Pro Forma Revenue and Focus on Compliance Initiatives:
888 Holdings reported a 6.5% decline in pro forma revenue to £881.6 million for H1 2023.
The decrease was attributed to online segment decline offsetting retail growth.
The 888 board emphasized its commitment to sustainability and compliance initiatives, considering them fundamental to the company’s future.
The £2.9 million regulatory settlement between the Gibraltar Gambling Commissioner and 888 subsidiary Cassava Enterprises underscores the importance of robust compliance measures in the iGaming industry. While 888 has taken corrective actions, this case serves as a reminder to all Gibraltar licensees to prioritize compliance and responsible gaming practices.