By Geoffrey Smith
Investing.com -- Shares in 888 Holdings (LON:888) fell on Tuesday after the U.K.'s gambling regulator hit it with a record £19.2 million fine (£1 = $1.2325) for lax controls at William Hill, the bookmaker it bought last July.
The move is the strongest action yet taken by British regulators to clamp down on a sector notorious for encouraging addiction and allowing itself to be used for money-laundering purposes.
"When we launched this investigation the failings we uncovered were so widespread and alarming serious consideration was given to licence suspension," Andrew Rhodes, the Gambling Commission's chief executive, said in a statement. "However, because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history."
Among the incidents cited by the Commission was the case of a new customer who was allowed to spend £23,000 in 20 minutes without any checks by William Hill. Another new customer was allowed to spend £18,000 in 24 hours, while a third spent £32,500 over two days without any intervention by the company.
The Commission also highlighted repeated failures to ask for proof that the source of customers' funds was legitimate.
The biggest part of the fine will be paid by Gibraltar-based WHG (International) Ltd., which will pay £12.5M, while William Hill Organisation Limited, which operates 1,344 bookmakers shops and bingo halls around Britain and will pay £3M.
888 Holdings stock has collapsed from a pandemic-era peak of nearly 500p a share to only 54.5p as of Monday's close. 888 Holdings shares fell another 1.8% in early trading on Tuesday to a new 11-year low on the news.