888 subsidiary settles for £2.9m in Gibraltar

A subsidiary of the popular iGaming and sports betting company 888 holdings plc, VirtualGlobal Digital Services Ltd, has reached a settlement with Gibraltar’s Gambling Commissioner. The sum negotiated between the two parties has been pinned at £2.9m after an investigation discovered specific shortcomings with the subsidiary.

This comes just a few weeks after 888 also broke off negotiations with FS Gaming, a cohort of investors that was looking to assume leadership positions in the company.

According to the investigation, the company used high thresholds for Enhanced Due Diligence (EDD) and overrelied on this metric, but at the same time, there were no clear rules as to how this threshold was approached and when it applied.

Another matter that was cited as an issue was the consistency in the effectiveness of the aforementioned EDD checks. These checks were either too weak on specific accounts or not conducted quickly enough.

The watchdog also discovered some issues with the way the subsidiary decided to keep certain accounts open while shutting others down. Open-source checks were also prioritized over the company directly engaging with clients and asking them for the source of wealth documentation, by far one of the most preferred methods by regulators, AML Intelligence, a specialist media, reported.

Overall, KYC obligations and controls were not at the level that was expected from the company. However, Virtual Global Digital Services Ltd has been actively improving its controls and checks, following regulatory recommendations, and showing full cooperation to the Gibraltar Gambling Division during the AML review.

Some of the mitigating factors in the case include 888 Management’s swift reaction and informing the relevant authorities of the breaches, the Gambling Commissioner stated. Accounts that failed to meet the necessary checks and standards were immediately suspended upon discovery, once again at the behest of 888 Management.

An internal compliance review got underway immediately after the probe into the subsidiary launched in January. Meanwhile, 888’s Board had demonstrated its full cooperation with the Gambling Commissioner and accepted the shortcomings such as they were.

888 also dedicated additional resources from its compliance management division to ensure that the Gambling Division staff had enough hands on deck to complete the process swiftly.

The settlement has been adjusted to reflect this level of cooperation, openness, and willingness for change, including the already existing implementation of required AML and KYC checks and standards.

The money in the meantime will be allocated to the Center of Excellence for Responsible Gaming at the University of Gibraltar. "888 has enhanced its policies and procedures in remediating the identified historical deficiencies," a statement by the Gibraltar Government and regulator read, indicating that the company is fully capable of holding a gambling license from the jurisdiction.

The investigation was launched in the wake of the company’s VIP activities suspension specifically in the Middle East, which seemed to prompt the exit of Itai Pazner, the Group’s CEO, at the time.

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