Online gambling behemoth 888 Holdings has run into a spot of trouble. This is because one of its subsidiaries has recently come under the investigation of the UK Gambling Commission (UKGC). The UK’s gambling watchdog has been placing a lot of emphasis on safe gambling. It has begun to question the different mechanisms used by operators to ensure that their customers have the tools to gamble enjoyably, yet responsibly.
The UKGC requires online casinos to offer customers a way to self-exclude from gambling easily. They should be able to freeze their gambling activities merely by clicking a link available on the website. Any requirement of the gambling site where customers are required to contact a call centre or send emails to ensure self-exclusion will be considered to be insufficient and obstructive. BGO Entertainment had faced the ire of the regulator last May. It was on account of a series of confusing advertisements featured on its website and those of its affiliates. The company was hit with a £300,000 fine because it chose to ignore the warnings issued by the UKGC to change its marketing content.
The subsidiary of 888 Holdings remains unnamed as of now. But it will most likely have to pay a huge fine in punishment. It might also have its license reviewed and perhaps even revoked, although this action would not have any precedent. This has caused shares of the company to drop almost 10% in value. It is clear that companies that do not follow the norms set down by the watchdog will face serious consequences. It’s all thanks to the negative publicity they receive. The gambling industry giant has websites for sports betting, casino as well as poker. It has also announced that it will provide the regulator with all necessary co-operation. So the exact nature and extent of the transgression can be understood and a suitable punishment decided accordingly.
JackpotJoy Faces Losses Because of Rising Debt
Jackpotjoy’s decision to increase its debt load in order to finance an acquisition has proved to be very costly to them. The online gambling company was listed earlier this year. It has shown losses during the initial three months of 2017. This is because the high-interest costs faced by the company have served to nullify the company’s profits. As a matter of fact, the company faces a pre-tax loss. In comparison, the company showed a healthy profit of £5.2 million during the same period in 2016.
JackpotJoy’s current financial woes stem from one of its decision. That is, to borrow an additional £150 million to purchase some brands from its main rival, Gamesys. The company’s total borrowing then touched £407 million. Interestingly, the publication of the company’s losses hasn’t reduced investors’ interest in the company. As a matter of fact, the JackpotJoy share price rose 3% to touch 588p that day.
Expect Additional Bad News Due to the JackpotJoy Losses
The company has warned that it will have additional bad news to announce. This is true if the UK government goes ahead with its decision to levy a tax on bonuses as free bets are known. Andrew McIver, the company’s Chief Executive also had something to say. He said that the company’s profits could be held back as a result of this decision.
JackpotJoy profits are also under pressure. This is because of the high tax rate in Spain where its business is currently expanding very rapidly. This decision of the governments is actually a sore point with the industry. Especially since it will be levied on all companies operating in the UK. It doesn’t matter whether it is located in the country or not.
JackpotJoy year-on-year results for March indicated a 15% rise in the number of active customers. Also, it indicated a 2% rise in their average spend to touch £87. The JackpotJoy site contributes 71% of the company’s revenues whereas the Vera&John casino site accounts for around 20%.