The UK Gambling Commission launched an investigation of 888 Holdings’s operations in the United Kingdom. After a probe of the companies’ responsible gaming policies was announced by the UKGC, 888 shares dropped 8%.
The units being studied are 888 Holdings sites which accept British players: 888casino, 888poker, 888sports, and 888bingo. The UK business done by the four gaming websites represents about 45% of 888 Holdings’ revenues.
Review of 888 Holdings’ Responsible Gaming Policies
The UK Gambling Commission is focusing on how 888 promotes responsible gaming. The UKGC said it is testing to see whether “certain measures” were taken by the gaming sites to ensure “social responsibility” for its customers.
In particular, the gaming regulator plans to look at the mechanisms 888 has in place to help customers exclude themselves from gambling online. 888 said in a press release it planned to improve “effective self-exclusion tools across different operating platforms“.
UK Self-Exclusion Laws
The United Kingdom has one of the most robust self-exclusion laws in the world. In the past, players had the ability to ban themselves from gambling for six months, 1 year, 5 years, or a lifetime. In 2015, a new law required companies to institute a “panic button”, which would allow gamblers to exclude themselves anwhere between 24 hours and 6 weeks.
The panic button (also known as a “time-out feature”) was designed to give players who felt themselves going on tilt or getting caught up in the moment to ban themselves temporarily, with the idea that some gamblers would stop short of a months-long or even permanent ban.
William Hill complained last year that the panic button had hurt its online gambling numbers significantly in the United Kingdom. Amidst a poor 2016 Q2 financial report attributed largely to the panic button, William Hill’s CEO was forced to resign. With such results, it is no wonder that other UK operators have dragged their feet in instituting similar policies.
Recent UKGC Fines for Gaming Sites
In February 2016, Paddy Power agreed to upgrade its responsible gaming and anti-money laundering technology to bring it in line with UK gaming laws. At the same time, Paddy Power paid £280k to socially responsible causes.
In June 2016, Betfred paid an £800k fine for similar wrongdoing. At the time Betfred was fined, the UK Gambling Commission said it was sanctioned due to “failures in anti money laundering and social responsibility practices“.
BGO Fines for Deceptive Ads
The 888 investigation comes at a time when the UK Gambling Commission appears to be ramping up enforcement. On May 2, the UKGC announced its first-ever fine for advertising breaches. BGO was fined £300k for failing to comply with standards.
The BGO fine was in response to 9 gambling ads the commission considered deceptive and illegal. Since then, BGO has been forced to rewrite content on their site in order to spell out the exact meaning of deposit bonuses, freeplay money, and other terms and conditions.
Simon Davies on UK Gambling Commission Regulations
Analyst Simon Davies of Canaccord Genuity said the BGO fine and the 888 review are a sign of things to come. Mr. Davies said companies are entering a time of “increased regulatory activity in the UK online gaming market“.
Simon Davies said the 888 investigation believe the company may have to pay for a failure to fully institute the self-exclusion technology on their sites, as well as institute anti-money laundering measures on their sites. Mr. Davies said whatever fines are not likely to harm 888 Holdings permanently, as “888 is highly profitable, and has a strong balance sheet.”
Peel Hunt on 888 Fines
Peel Hunt analysts made similar estimations. The gaming analysis firm suggested that 888 Holdings’ generally solid reputation meant it likely would not face a huge fine, and suggested the fine would be “tolerable, based on past experience“.
The Peel Hunt analysis suggested that other UK gaming companies would soon need to follow the same standards, so the advantages rendered to other companies would be short term and minimal. The Peel Hunt report said, “And the rest of the industry will have to follow whatever changed business practices are required, neutralising any competitive impact.”
Thus, the 888 Holdings stock is likely to recover from the current decline in short order. The UK Gambling Commission appears to be going after top sites as an example to the other operatoirs. Each of them might be tagged eventually, since the commission has targeted Paddy Power, Betfred, BGO, and now 888 within the past year. Ultimately, 888 Holdings is likely to be fined less than they would have lost, had they followed William Hill’s example.
