With Chickens Coming Home To Roost, Entain Expects To Get A Roasting For Turkey
UK gambling giant Entain–owners of Ladbrokes Coral, bwin, PartyPoker, et al–is facing a mega multi-million pounds fine for historic bribery and financial breaches by its former Turkish affiliate, the company fessed up this week.
The share value of the FTSE-100 company, formerly GVC Holdings, fell two percent to £13.45-a-share Wednesday morning (May 31), when the news hit the street.
British tax authorities, the HMRC (His Majesty’s Revenue and Customs), have been investigating Entain’s Turkish operations since 2019, Entain revealed in a company statement.
According to sources who are familiar with the case, the Turkish malfeasance–covering a period between 2011 and 2017, when Entain operated as GVC Holdings–amounts to a sum in the region of £230 million (US$284.6m/€266.32m).
The case has now been handed to the UK’s Crown Prosecution Service (CPS).
Stressing that the breaches were “historic” in nature, concerning alleged bribery between former employees and third-party vendors, Entain confirmed it was offering full cooperation to British investigating authorities.
In a statement, the company conceded it was facing “a substantial financial penalty”.
Sources who are familiar with the case say that most of the offences fall under Section 7 of the UK Bribery Act, namely: A company has “failed to prevent” an individual “bribing” another person or entity on their behalf.
Entain sold its Turkish platform Headlong Ltd. in 2017 – before the Omnichannel engineered its £4 billion (US$4.94bn/€4.63bn) takeover of Ladbrokes, which created the UK’s biggest high street bookmaker.
“[We] are keen to achieve a resolution to what is an historical issue,” affirmed Entain Chair Barry Gibson. “We have taken decisive action in recent years to improve corporate governance.
“The board and leadership teams have been overhauled, 100 percent of our revenue is now from regulated or regulating markets and our business model, strategy and culture have been reviewed, analysed, and stress-tested,” he continued.
“Since the investigation first commenced, the group has undertaken a comprehensive review of anti-bribery policies and procedures and has taken action to strengthen its wider compliance programme and related controls,” Gibson underlined.
The sale of then-GVC subsidiary Headlong was finalised in controversial circumstances in November 2017, being moved on to Ropso Malta, a tech firm, for €150 million (£129.54m/US$160.29m).
In a major break for Entain, because the investigation concerns historic breaches, analysts do not expect the investigation to affect the company’s UK gambling licence.
Collectively, to date, the Entain and GVC avatars have been fined a total of £22.9 million (US$28.33m/€26.51m) by the UK Gambling Commission for consumer protection and anti-money laundering failures.