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FS Gaming Investments reduces Stake in 888 Holdings

FS Gaming Investments reduces Stake in 888 Holdings
by
August 21, 2023
in Finance News, iGaming News
40

In a significant move, investment firm FS Gaming Investments has lowered its ownership stake in 888 Holdings from the initial 6.57% to 4.55%. This strategic decision comes after FS Gaming’s acquisition of the stake in June and follows the cancellation of a deal with Shay Segev.

The reduction of approximately 2% of the stake by FS Gaming is primarily attributed to an investigation conducted by the UK’s HM Revenue & Customs (HMRC). The investigation revolves around the business activities of Kenny Alexander and Lee Feldman during their tenure at Entain, which was previously known as GVC.

The HMRC investigation in the United States focused on Entain’s former Turkish-facing operations. Entain acknowledged historical misconduct involving former third-party suppliers and employees. The company was under scrutiny for various offenses, including potential violations of Section 7 of the Bribery Act 2010.

Entain’s Q2 report revealed that £585 million (approximately $746.3 million) has been set aside to address the matters raised by the HMRC. Barry Gibson, the current Chairman of Entain, emphasized, “Today’s Entain bears no resemblance to the GVC of the past, which had a different management team, a different strategy, and – to be frank – different standards.”

Following the announcement of the HMRC investigation, negotiations between FS Gaming and 888 Holdings for a 6% stake were temporarily suspended. This deal would have resulted in Lee Feldman, Kenny Alexander, and Stephen Morana assuming the roles of Chairman, CEO, and CFO of 888, respectively. Ultimately, these discussions were terminated.

The decision by FS Gaming to reduce its original 6.57% stake in 888 Holdings to 4.55% is widely perceived as a direct response to 888’s choice to halt FS Gaming’s investment offer in July.

Entain’s Struggle: Navigating the Past and Shaping the Future

The recent developments shed light on Entain’s efforts to address historical misconduct while also steering its course towards a transformed corporate culture. FS Gaming’s reduction of its stake hints at a change in strategy and underscores the potential impact of regulatory and legal challenges on business decisions.

A Move with Broader Implications

FS Gaming’s decision to diminish its stake in 888 Holdings carries consequences not only for the involved parties but also for the entire industry. It raises questions about the market’s sensitivity to legal matters and how investors respond to such uncertainties.

Moving Forward Amid Challenges

As Entain continues to grapple with the aftermath of the HMRC investigation, the industry awaits the company’s navigation through these challenges. Observers are keen to see how Entain addresses its past to build a solid foundation for a sustainable future.

FAQs

Why did FS Gaming reduce its stake in 888 Holdings?

The reduction of FS Gaming’s stake appears to be a response to regulatory challenges and uncertainties arising from the HMRC investigation.

What were the impacts of the HMRC investigation on Entain?

The HMRC investigation prompted Entain to set aside £585 million to address the matter. It concerned historical misconduct involving former third-party suppliers and employees.

What was the objective of the HMRC investigation?

The HMRC investigation focused on Entain’s former Turkish-facing operations and examined potential violations of the Bribery Act 2010.

How did Entain react to the investigation?

Entain emphasized that it has undergone significant transformation since the events in question and now operates with different standards, a new management structure, and a different strategic direction.

What were the implications of the deal’s cancellation for FS Gaming?

The cancellation of the deal with Shay Segev, coupled with uncertainties stemming from the HMRC investigation, led FS Gaming to reduce its stake in 888 Holdings as part of a strategic realignment in a shifting landscape.

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