Entain's Prosecution Agreement Changes Risk Levels, Lawyers Say

Entain’s December £615m agreement to settle Bribery Act charges clearly “changes the risk profile” for UK-licensed online gambling companies with so-called dot.com operations, lawyers said on Thursday (January 25).

The prosecution service made “a quite granular decision about specific markets”, said Eoin O’Shea of CMS law firm’s London office.

In December, Entain’s agreement with the Crown Prosecution Service (CPS) jolted an industry that has operated for several decades in what it calls “grey markets”. 

The agreement calls for a £615m penalty coupled with an order for Entain to leave certain “regulating” markets within a year.

The markets are Mexico, Brazil, Chile and Peru.

The settlement would be over alleged violations of the Bribery Act between 2011 and 2017, mostly in Turkey, under a previous management when the company was called GVC.

Entain would be permitted to stay in some of the Latin American grey markets through the terms of its deferred prosecution agreement if it could prove to the CPS that regulation was imminent. 

Legislation to allow for direct licensing has been passed in Brazil and Peru, but the timeline for the award of those licences is uncertain. In Mexico, Entain has recently partnered with a local casino through its bwin brand.

The prosecution service also had what O’Shea called a “quite striking” message for other British licence holders.

“The wider gaming industry may wish to reflect on the implications of this agreement for their own corporate compliance procedures and, where appropriate, take action to address and report any failings they identify,” said prosecutor Andrew Penhale.

The settlement shows that robust ethics and compliance programmes are essential for all gambling operators, and they should encompass third-party suppliers, said Tamsin Blow of CMS.

B2B companies are one step removed, and there is probably no general rule for them, Blow said.

But they are obliged to be mindful of anti-money laundering and due diligence procedures, along with adhering to proceeds of crime statutes, she said.