William owner 888 has set aside more than £100 million for possible legal action as bosses grapple with regulatory pressure abroad.
British gambling firms have come under scrutiny in Austria after the country’s three highest courts found they had been operating illegally.
Casinos Austria, which is the state-backed gambling company, has held a monopoly since 2016 and judges ruled that other firms doing business there were breaching the law and should return any player losses.
William Hill: British gambling firms have come under scrutiny in Austria after the country’s three highest courts found they had been operating illegally
It now means that some gamblers across Europe are taking action to recoup money they lost on betting websites.
In total, 888 has earmarked £116million for ‘ongoing legal and regulatory matters principally in Austria and Germany’, according to its recent annual report.
The provisions come at a testing time for the group. 888, which owns online brands such as 888 Poker and Mr Green, has been blighted by compliance failings and management uncertainty over the past 18 months.
This came to a head in January last year when the firm suspended VIP customer accounts in the Middle East over fears that they violated moneylaundering policies.
The saga prompted chief executive Itai Pazner to step down, leaving the business in limbo and shareholders anxious.
Standing at 84p, 888 shares have fallen by almost 50 per cent in the past five years and have fallen by 10 per cent since the start of this year alone.
The company is also facing pressure at home. The UK is pushing ahead with regulatory changes, including limiting stakes in online betting. The move is part of the
Government’s gambling white paper published last year.
In a desperate bid to turn 888’s fortunes around, new chief executive Per Widerstrom, an online betting veteran, has vowed to focus on key markets and drive down debt.
He will also change the company’s name to Evoke, which he says will better reflect the ‘mission to make life more interesting by delighting players with world-class betting and gaming experiences’.
Danni Hewson, an analyst at investment platform AJ Bell, said: ‘It’s not a new thing for a gambling company to change its name to something softer, less aggressive in a bid to win over potential customers and try and put past bad behaviour out of its mind.
But 888, or Evoke, can’t escape the legal proceedings still dogging it in countries like Austria and Germany.’
888 said: ‘The group only operates where it has a justifiable legal basis to do so. Based on the extensive advice and opinion received, we are absolutely confident in our legal and regulatory position.’
An 888 spokesperson added: ‘We remain completely confident in our position under EU law to offer these services to our players from Austria, alongside many other competitors.’
