888 Has Been Charged A Record Fine By The Gambling Commission

888 Holdings

A record fine was received for failing the vulnerable gamblers and has caused 888 to slip into a loss. In the first six months of the year, the pre-tax loss was recorded at $17.3 million. This was caused by a combination of a hefty German tax bill, and the provision of $50 million to cover the penalty from the United Kingdom. The pre-tax profit was recorded at $27.8 million, with the loss being a direct result of the charges.

The Gambling Commission is the regulator of the industry, and they publicly shamed 888 during the last week. The fine set a record and was based on their outrageous failings. According to the Watchdog, more than 7,000 people who were voluntarily trying to deal with their gambling addictions could still get into their accounts.

One customer, in particular, was given the authorization to make bets worth 850,000 in one year. The bets were placed with money that had been stolen from their place of employment. This was what the Gambling Commission said was a serious flaw. They also stated 888 made no effort to help prevent any harm from coming to their customers. The $5.5 million was the first-half provision in direct relation to the fine. The rest of the first-half fine of $45.3 million is in relation to money 888 set aside. The money was for business in Germany prior to 2015 regarding a potential VAT bill. 888 claims setting the money aside was a cautious approach, and they are still having discussions with the tax authorities in Germany.

According to Itai Frieberger, the Chief Executive, in the first half of the year, the gambling firm revenue saw an increase of 3 percent. This amounted to $270.1 million, the core casinos business was bolstered, there was an excellent performance in poker, and the demand for 888 Sport increased substantially. He additionally stated, during the second half of the year, regulatory headwinds are going to be faced by the industry. The third quarter trading meets the expectations of the board and is off to a good start. The current momentum, combined with the strong business model of the group, is giving the board confidence that 888 will continue to show progress, and the full year’s expectations will become a reality.

The revenue of 888 from the United Kingdom dropped to 39 percent during the first half. The growth in markets including Italy and Spain saw a growth of 46 percent last year. According to the firm, the increased regulations in the United Kingdom would cause an increase in their costs. Further regulations include expanding the gaming duties placed on the casinos, bingo free bets, and poker. These changes will take place during the second half of 2017 in the United Kingdom, and the cost base of the United Kingdom operators will be increased. The overall growth of the market in the United Kingdom is expected to be impacted by the enhanced regulations being placed on areas such as bonuses, advertising, and television.