888 Holdings PLC (LSE:888) shares stumbled after its William Hill arm was hit by a record punishment from the UK's gambling watchdog.
William Hill, which was acquired by the group last year, will have to pay penalties of £19.2mln for failing to protect consumers and weak anti-money laundering controls.
The company avoided a harsher punishment after agreeing a settlement with the Gambling Commission, resulting in the payment of the largest penalty in the history of the Gambling Commission.
This came after the regulator found “widespread and alarming” issues at the company, which were “so widespread and alarming [that] serious consideration was given” to suspending the firm’s licence.
But Andrew Rhodes, the Gambling Commission’s chief executive, said that 888 “immediately recognised their failings" and agreed to swiftly implement improvements.
The regulator found that customers were allowed to deposit large sums of money without the companies conducting any checks.
One customer was allowed to open a new account and spend £23,000 in 20 minutes without any checks.
Another was allowed to open an account and spend £18,000 in 24 hours without any checks and a third was allowed to open a new account and spend £32,500 over two days without any checks.
It is the latest trouble to hit 888 which at the end of January suspended VIP activities in some of its online markets pending the outcome of an internal compliance investigation and, separately, announced the departure of Itai Pazner, its chief executive officer (CEO) and executive director, after its finance chief agreed to leave earlier in the year.
The group also dropped out of FTSE 250 in the latest reshuffle, having last year lost any of the market value gained during the pandemic and is down over 70% for the past 12 months.
Shares in 888 fell almost 3% to 53p on Tuesday morning.
An 888 spokesperson said the settlement “relates to the period when William Hill was under the previous ownership and management. After William Hill was acquired, the company quickly addressed the identified issues with the implementation of a rigorous action plan.”