Entain May Face 'Substantial Financial Penalty' In UK Investigation

May 31, 2023
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Entain has said it is likely to face a “substantial financial penalty” stemming from its former Turkish-facing online gambling unit.

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Entain has said it is likely to face a “substantial financial penalty” stemming from its former Turkish-facing online gambling unit.

The company said it is negotiating a deferred prosecution agreement with the Crown Prosecution Service (CPS) as it seeks to resolve an ongoing investigation by HM Revenue & Customs (HMRC) over its former involvement in Turkey.

The investigation includes, but is not limited to, possible offences under the Bribery Act 2010, the London-listed company said today (May 31).

Entain said it “acknowledges that historical misconduct involving former third party suppliers and former employees of the group may have occurred”.

Although it does not know the results of the investigation, Entain said “it is likely that they will include a substantial financial penalty which is yet to be determined”.

“The company cannot identify reliably at this stage the size of any financial penalty.”

The company, then called GVC Holdings, had a Turkey-facing unit from 2011 to 2017.

GVC obtained the Turkish operations as part of a 2011 deal with Sportingbet.

In November 2019, the company disclosed that HMRC was seeking information on the former Turkish holdings, and in July 2020 it said the tax agency was widening its investigation.

Since the investigation was launched, Entain said it has reviewed its anti-bribery policies and procedures and “has taken action to strengthen its wider compliance programme and related controls”.

Barry Gibson, chairman of Entain, said: “We are keen to achieve a resolution to what is an historical issue relating principally to a business that was sold by the Group nearly six years ago.

"Entain has been through a period of extraordinary transformation since then, and has taken decisive action to be a best-in-class, responsible operator with outstanding corporate governance. The Board and leadership teams have been overhauled, 100% of our revenue is now from regulated or regulating markets, and our business model, strategy and culture have been reviewed, analysed, and stress-tested.

"We will continue to work closely with both the CPS and HMRC to ensure that this matter can be concluded as soon as is practical.”

A deferred prosecution agreement is made between a prosecutor and an organisation which could be prosecuted, under a judge’s supervision.

It allows prosecution to be suspended for a certain period if the organisation meets specified conditions.

The company's shares fell around 3.3 percent in early trading on the London Stock Exchange, following its announcement.

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