Investigations into 888 Derail FS Gaming's Position with Sports Betting Giant

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A pair of investigations into legal sports betting giant 888 has derailed a restructuring, sent shares tumbling, and left the parent company of William Hill and 888sport with concerns about its operating status in the United Kingdom. 
The gaming company announced Friday that it cut off talks with FS Gaming, an investor group led by former GVC CEO Kenny Alexander. He was in conversation with the board to take over at 888 before a review from HM Revenue Customs in the U.K. questioned his involvement in a possible bribery case of a GVC-owned Turkish company before the GVC rebranded as...

A pair of investigations into legal sports betting giant 888 has derailed a restructuring, sent shares tumbling, and left the parent company of William Hill and 888sport with concerns about its operating status in the United Kingdom. 
The gaming company announced Friday that it cut off talks with FS Gaming, an investor group led by former GVC CEO Kenny Alexander. He was in conversation with the board to take over at 888 before a review from HM Revenue Customs in the U.K. questioned his involvement in a possible bribery case of a GVC-owned Turkish company before the GVC rebranded as Entain. 
Alexander, who left GVC in 2020, was supposed to be joined by fellow titans of the industry in former GVC Chairman Lee Feldman and Stephen Morana, formerly of Betfair, at 888. The trio in FS Gaming bought a 6.6% stake in the company in June with the idea of restructuring the UK betting site and putting that trio into power.
British commission gets involved
The HMRC having questions also turned into a similar investigation by the Great Britain Gambling Commission that could lead to 888’s gaming license being suspended or revoked in the U.K. 
The GBGC sent 888 a detailed list of recommendations, leaving the company with no other option than ending the relationship with FS Gaming. 
Had Alexander and FS Gaming gained more than 10% control, which was predicted, it would’ve defined “change in corporate control” to the GBGC, which would’ve had to approve of 888's power structure to retain its operating status.  
“As a Board, we devoted significant time to considering FS Gaming’s Proposal,” 888 executive chair Lord Mendelsohn said. “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 licenses in our largest market at significant risk.”
Stock takes a hit
A little over a month ago, having Alexander and FS Gaming buying into 888 was applauded as a good thing. The stock rose 18% following the announcement. 
Following Friday’s news, though, shares in the company fell by more than 20%. 
Now, the company is in flux awaiting new leadership. Mendelsohn said 888’s board plans to name a CEO in the “very near future,” but that didn’t stop shareholders from being scared off of the loss of FS Gaming and a clear direction.  
“The Board remains firmly focused on delivering the Group’s clear strategy to unlock shareholder value and I’m pleased to confirm that the business remains on track to deliver market expectations for 2023 Adjusted EBITDA,” Mendelsohn said. 
A risk not worth taking
888 had financial success in the last fiscal year, announcing $1.53 billion in revenue and an 82% increase in its adjusted EBITDA in April. 
William Hill is one of the largest sportsbook brands in the world and is renowned throughout Europe. It’s unthinkable what losing its operating license in the U.K. would’ve done to 888, a risk certainly not worth taking for a company that also has North American holdings. 
888 also owns SI Sportsbook, which operates in U.S. states Colorado, Michigan, and Virginia, as well as Ontario. 
SI Sportsbook has plans to expand into markets in Indiana, Iowa, and New Jersey.  This article originally appeared on Covers.com, read the full article here
Source: https://www.covers.com/industry/888-license-in-...