Entain prepares for hefty fine over Turkish bribery allegations
Entain has told shareholders that it’s negotiating a deferred prosecution.
UK.- The FTSE-listed gambling giant Entain has warned that it expects to be hit with a “substantial financial penalty” as a result of an investigation into tax and bribery offences allegedly committed by a former Turkish subsidiary. The UK tax authorities began an investigation back in 2019.
In a statement to shareholders, the owner of Ladbrokes and Coral said it was negotiating a deferred prosecution agreement with the Crown Prosecution Service (CPS) and was seeking to resolve an inquiry by HM Revenue and Customs (HMRC). Investigations began in late 2019 and relate to an online betting and gaming business that targeted Turkey, where online gambling is illegal.
Entain (then GVC Holdings) owned the business between 2011 and December 2017, selling it shortly before it bought Ladbrokes Coral for £3.6bn.
Entain said it initially believed the HMRC was investigating its former third-party payment suppliers in Turkey. However, it announced back in July 2020 that the tax agency was probing potential corporate offending by “an entity (or entities) within the group”, including for offences under section seven of the Bribery Act 2010, which relates to failings to prevent bribery.
It said in a statement that the investigation “includes a review of its former Turkish-facing business and acknowledges that historical misconduct involving former third party suppliers and former employees of the group may have occurred … The group continues to cooperate fully with HMRC and the CPS.”
The company said it could not predict how the investigation would conclude, and that prosecution of one or several entities was a possibility. It added that it was unable to reliably estimate the size of any potential financial penalty.
It said: “Negotiations remain ongoing and any resolution would be subject to judicial approval.”
Last year, Entain Entain was issued with a £17m financial penalty – then the largest ever doled out by the British gambling regulator, the Gambling Commission. The operator also had conditions added to its licence and was ordered to implement an improvement plan. Since exiting Turkey, the company has established a goal to cease all operations in unregulated markets.
