William Hill owner warns of UK licence risk from new shareholder

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The owner of William Hill faces the possibility of losing its right to operate in the UK after regulators put its licence under review over concerns about a new shareholder’s links to a bribery investigation by the UK tax authority.

888 said the Gambling Commission told it on Friday that its licence was under review in relation to an almost 7 per cent stake built by FS Gaming Investment Consortium, a vehicle backed by former executives at GVC, the gambling giant later rebranded Entain.

The group includes Kenny Alexander, who built GVC into one of the world’s largest gambling companies, and its former chair Lee Feldman. The pair had pitched themselves as new management for 888, which has struggled with a large debt pile and compliance breaches.

The prospect of the pair taking control sent shares in 888 soaring when the stake was disclosed last month. 888 had held talks with FS Gaming over the proposal.

However, 888’s board, which has been hunting for a new chief executive since January, said on Friday that it had decided to terminate discussions with FS Gaming, citing “immediate and significant risk” of losing its licence if the proposed management team was installed.

Shares in 888 tumbled by 26 per cent in late afternoon trading following the warning from 888, which last year generated about two-thirds of its £1.8bn in revenues in the UK.

888 said it had sought clarification from FS Gaming over questions raised by the Gambling Commission “but the most basic assurances that addressed these concerns were not forthcoming”.

The regulator first reached out to 888’s board to seek clarity over whether FS Gaming’s stake exceeded 10 per cent after another major shareholder — activist fund HG Vora — backed plans for the consortium to assume management positions.

Entain announced in May that it was entering into a deferred prosecution agreement with the Crown Prosecution Service in relation to a UK tax authority investigation of offences under the bribery act in relation to GVC’s sale of its former Turkish subsidiary Sportingbet. Alexander was GVC’s chief executive at the time of the sale.

The Turkish business was sold in 2017 to one of Alexander’s horseracing associates. Alexander left GVC in 2020 shortly after the HMRC probe was announced. The company said at the time that his exit was not linked to the investigation.

Lord Jonathan Mendelsohn, 888’s chair who is serving as interim chief executive, said the William Hill owner was “fully co-operating” with the licence review. The review could result in immediate suspension of 888’s licence, permanent revocation or the imposition of conditions or financial penalties. 

The Gambling Commission declined to comment.

FS Gaming is also backed by former Entain chief executive Shay Segev, who succeeded Alexander as CEO and Stephen Morana, a former independent board director at Entain who the consortium had proposed as a possible finance director at 888.

FS Gaming said: “We were completely surprised by 888’s statement . . . we remain relatively small public shareholders with no access to any non-public information and we were engaged in dialogue regarding the best strategy to maximise the value of these world-class assets.”

“We will continue those efforts,” it added.

Mendelsohn added that 888 was “finalising its appointment [of a new chief executive] and expects to make an announcement in the very near future” after the process was “temporarily interrupted” by discussions with FS Gaming.