The Sunday Times November 28, 2021 7
BUSINESS
quarters in Gibraltar, a tax haven for
online gaming companies, and employs
400 people in its office near Tel Aviv. Paz-
ner, who has spent most of his career at
888, is dressed in jeans and a denim shirt.
“The Israeli hi-tech culture is very
informal,” he explains.
Pazner is acutely aware that his indus-
try is facing an uphill battle to prove it is
doing enough to protect problem gam-
blers. Ministers are holding a review of
the Gambling Act to ensure legislation is
fit for the digital age. The current regula-
tions have largely remained the same
since 2005, when online gambling was
still in its infancy. The government is
looking at measures such as adding extra
protections for young adults and impos-
ing online stake and spend limits, along
with restrictions on advertising.
Pazner is unfazed, remaining bullish
about the company’s chances. “888 has
been dealing with regulatory headwinds
since its inception,” he says. “There have
been much worse risks that we have man-
aged to overcome.”
An example is America, 888’s biggest
market until 2006, when the US outlawed
online gambling. “It shut down from one
day to the next,” says Pazner, who was
running its UK business at the time.
Instead of cutting back, 888 ploughed
investment into other markets, including
the UK and Europe. “We didn’t fire a sin-
gle person at the time — we took a punt.”
A US Supreme Court ruling in 2018 lib-
eralised sports betting in America and
888 has since re-entered the market,
striking up a partnership with Sports
Illustrated magazine.
Pazner is taking a further bet against
regulation through the acquisition of
William Hill, which will give it a 15 per
cent UK market share. “With all the
changes in regulations that could come
in, I still think the UK’s going to be one of
the biggest and most attractive markets
for a very, very long time,” he says.P
azner insists that holding on to Will-
iam Hill’s high street shops —
instead of selling them off — will
provide a leg up if rules on advertis-
ing tighten. “We actually see the
shops as a core asset of William Hill,” he
says. “A presence on the high street is an
added benefit from a brand perspective.
Some of the biggest online retail compa-
nies are now opening shops to create that
omni-experience.”
The son of a diplomat, Pazner spent
his childhood in Israel and America while
his father was on overseas postings. After
school, he served in an anti-aircraft unit
in the Israeli military before taking a job
at Internet Gold, a communications ser-
vice provider. He joined 888 as a market-
ing manager in 2001 and had worked his
way up to chief operating officer by 2017.
In January 2019, he replaced Itai Frie-
berger as chief executive.
In Israel, 888 is at the centre of a grow-
ing technology sector, which has formed
companies such as Waze, Viber and
Mobileye and has earned it a moniker:
the “start-up nation”. Google, Facebook
and Microsoft all have large regional offi-888 boss Itai Pazner tells Sabah
Meddings why he can offer
William Hill’s shops a bright future
Taking a
punt on
Britain’s
bookies
ces in Israel, which is home to almost 100
unicorns — private companies worth
more than $1 billion.
Israel’s short history has contributed
to this entrepreneurial culture, accord-
ing to Pazner, while the military’s tech-
nology training has helped create a
skilled workforce. “A lot of people who
come out of the tech units start compa-
nies after they leave the military,” he says.
Another factor is education: universi-
ties lean towards computer science, engi-
neering and maths. Shay Ben-Yitzhak,
one of the founders of 888, studied at the
Technion — the Israel Institute of Tech-
nology — in Haifa.S
hares in 888, which is chaired by
Labour peer Jon Mendelsohn, have
been volatile since it listed in the UK
in 2005. They climbed steadily at
the start of the pandemic to 478p in
September but have drifted since, closing
on Friday at 325p to value the company at
£1.2 billion.
In the face of regulation, 888 has
shifted its model away slightly from high
rollers towards mass-market punters. It
has also invested in safer-gambling meas-
ures — including a tool, The Observer,
able to flag concerning customer activity.
Safer gambling has become an increasing
focus in recent years, not least because of
blunders on 888’s part that forced action
by the regulator. In 2017, it was fined
£7.8 million by the Gambling Commis-
sion after more than 7,000 people who
had voluntarily banned themselves from
gambling were still able to access their
accounts due to a technical failure.
“We can always do more,” says Pazner
of the company’s efforts. He points to a
recent Gambling Commission survey that
showed the percentage of people who
had been harmed by online gambling had
fallen from 0.6 per cent in 2020 to 0.3 per
cent in September this year. A voluntary
ban on advertising, however, is not on the
cards; neither are hard-and-fast volun-
tary limits. “We just think ads need to be
done in a responsible way,” he says. “Peo-
ple have the right, if they have the money,
to spend within their means. As long as
they’re not doing it in a harmful way.”
During the various lockdowns, while
sporting events were cancelled and casi-
nos were shut, punters chose to spend
their money online. Pazner is careful to
argue that the lockdown helped online
businesses “in general” — Netflix, online
retailers and video games — not just gam-
bling operators.
“There was a big shift [online] and we
were well positioned to benefit from it,”
he insists, rejecting the suggestion that
talking about 888’s strong pandemic per-
formance is tricky in terms of PR.
“If you don’t think what your business
is doing is a bad thing, you don’t feel bad
about your business benefiting,” he says.
“We don’t think what our business is
doing is a bad thing.” He says 888 doubled
its responsible-gambling team during the
pandemic, allowing it to intervene with
more customers, and it set more limits on
the amounts customers could lose. “So
no, I don’t feel bad the business did well.”I
n the six months to June 30, 888
reported a 39 per cent jump in reve-
nues to £528.4 million, including
50 per cent growth in UK sales, and a
14 per cent rise in pre-tax profits to
£57.9 million.
888 has already secured the support of
almost a quarter of its investors, includ-
ing Aberdeen Standard Investments,
which owns 8.7 per cent, for William Hill,
agreeing to pay hundreds of millions
more than the second-highest bidder.
Roger Devlin, William Hill’s former chair-
man, said 888 had “paid a handsome
price given the UK regulatory uncer-
tainty ... but with Jon Mendelsohn’s
political connections and Itai’s technol-
ogy expertise, they are well placed to
grow an iconic sports brand.”
A question now is whether 888 will be
a target itself. The US casino firm Las
Vegas Sands is rumoured to have been
interested. “Interest can come our way at
any point in time, and has come our way
and will come our way,” says Pazner.
“I’m focused on executing our strat-
egy: combining these two businesses and
creating the best-in-class leading gaming
company,” he continues. “William Hill
has a world-class sports book, with a
huge amount of heritage and talented
people, so think about the combination.
What’s better than that?”
And do his plans include being a long-
term owner of William Hill’s shops? “I’m
not saying it’s a decision for ever, but it’s a
decision for now.”I
tai Pazner is so eager to get his
hands on William Hill’s European
business, he’s been going under-
cover on a guerrilla tour of its book-
ies in recent weeks. “They don’t
know me, I’m still anonymous,”
grins Pazner, chief executive of
online gambling company 888.
From early next year, if share-
holders approve the transaction,
Pazner’s online empire is expanding to
include 1,400 of William Hill’s high street
shops, a workforce of more than 10,500
and ownership of one of the oldest gam-
bling brands in Britain.
Casino games, poker and bingo opera-
tor 888 agreed to pay £2.2 billion for the
British bookmaker’s European business
earlier this year. Pazner’s years of remain-
ing under the radar are nearly over.
For 888, which was established in
Israel in 1997 and listed on the London
Stock Exchange in 2005, the acquisition
will make it the UK’s third-largest gam-
bling operator after Paddy Power Betfair
owner Flutter Entertainment and Entain,
which owns Ladbrokes Coral. The deal is
also a bet against looming regulation in
Britain designed to protect problem gam-
blers. Placing bets using credit cards has
already been banned, alongside a clamp-
down on controversial betting machines
known as fixed-odds betting terminals.
Thankfully for William Hill’s shop staff,
Pazner’s experience in-store was a posi-
tive one — they taught him how to fill out a
betting slip. “Colleagues are very friendly
— they helped and explained,” he says of
the experience.
Pazner’s swoop on William Hill comes
as the gambling sector rides a wave of
dealmaking. Entain has been at the cen-
tre of bids from American fantasy sports
site DraftKings and the Las Vegas casino
giant MGM, while FTSE 250 gambling
software firm Playtech has agreed a take-
over with Australian operator Aristocrat.
FTSE 100 firm Flutter is a combination of
Paddy Power Betfair and The Stars
Group. William Hill even tried to buy 888
in 2015, before its largest shareholder
blocked the deal. Then, a year later, 888
teamed up with Rank for an attempt at
William Hill.
Based in Israel, Pazner, 49, has come
to the UK to spend a few days working at
888’s small third-floor office in London’s
Marylebone. The business has its head-If you don’t think
your business
is doing a bad
thing, you don’t
feel bad about
it benefiting
itai Pazner sees digital platform 888’s move into bricks and mortar as creating an “omni-experience” for the brandTOM STOCKILL FOR THE SUNDAY TIMESTHE LIFE OF
ITAI PAZNER
VITAL STATISTICS
Born: July 24, 1972
Status: married to Didi, 45.
The couple have four
children and a dog
School: Gymnasia Ha’ivrit
Comprehensive High
School in Jerusalem
University: The College of
Management Academic
Studies in Rishon LeZion,
south of Tel Aviv
First job: assistant in a
video rental shop
Pay: $2.6 million total
compensation
Home: Ramat HaSharon,
close to Tel Aviv
Car: white Toyota
Land Cruiser
Favourite book: The Old
Man and the Sea by
Ernest Hemingway
Drink: The Macallan
whisky, and coffee.
“I became a coffee
obsessive during Covid”
Film: Pulp Fiction
Music: Prince,
Pearl Jam and Red
Hot Chilli Peppers
Gadget: Tesla, recently
bought for his wife
Watch: Swiss brand IWC
and an Apple Watchday in meetings before
going home at 7pm. He
sees his children for a
while before holding
meetings with America
from 9pm to 10pm.DOWNTIME
Itai Pazner enjoys
watersports including
kitesurfing. On the
weekends, he spends time
with his children. “We go to
the desert, we like spending
time outdoors and we go
to the beach,” he says.RISKY BUSINESS
1961
The first betting shops open
in the UK1986
New legislation allows
bookies to provide hot
drinks and TV screensEARLY 2000S
New machines, known as
fixed-odds betting
terminals (FOBTs), are
introduced to betting
shops. Bookmakers begin
stuffing them with as many
FOBTs as possible2005
The UK Gambling Act limits
FOBTs to four per shop. The
legislation leads to an
explosion in the number of
betting shops2018
Ministers slash the
maximum stake in one spin
on FOBTs from £100 to £2.
William Hill closes more
than 700 shops in the UK2021
Betting shops put a greater
focus on digital, including
touchscreen displaysCharity: a charity in Israel
hosting children who live
away from their families
Last holiday: Greece
in AugustWORKING DAY
The chief executive of
888 gets up at about
7am and organises his
children for school. He then
spends time exercising —
either on his Peloton bike,
running or playing tennis
— then drives to the
office to spend theApple’s Watch,
Pulp Fiction
and Prince are
all on Pazner’s
favourites list