British gambling firm Entain has set aside £585 million ($744.5 million) for a potential settlement with British authorities over alleged bribery offenses at its former Turkish betting business, Sportingbet. Entain, previously GVC, owned the brand between 2011 and 2017.
An investigation by the UK’s tax authority, HM Revenue and Customs (HMRC), included a review of Sportingbet, where Entain stated that historical misconduct involving former third-party suppliers and ex-employees of the group may have occurred, according to news agency Reuters.
Entain on Thursday said that it expects the potential financial penalty will be paid over four years after it officially enters into a deferred prosecution agreement with the UK Crown Prosecution Service, likely later this year.
As per the company’s estimates, the fine is likely to be the second-biggest in the UK imposed by the country’s authorities for criminal conduct under the deferred prosecution regime that introduced corporate plea deals, Financial Times reported.
HMRC’s ongoing probe was launched in 2019. The investigation looked into third-party suppliers for the processing of payments for online betting and gaming in Turkey. In 2020, HMRC started looking into potential corporate offending by entities within the group. Entain, formerly known as GVC, sold the business in 2017.
As per FT, the alleged offenses of Entain’s former Turkish business Sportingbet fall under section 7 of the bribery act. Under this act, a company has failed to prevent an individual from bribing another person or entity on their behalf.
Barry Gibson, Entain’s chairman
Barry Gibson, Entain’s chairman, said the company was “pleased to be making good progress towards drawing a line under this historical issue.” He added: “Following a complete overhaul of our business model, strategy, and culture in the past few years, the Entain of today bears no resemblance to the GVC of yesterday.”
Entain noted that its £585 million provision for the fine had been calculated on the basis that it would receive “full credit for its extensive co-operation” with UK authorities. Meanwhile, analysts at Shore Capital and Barclays said that the fine was higher than anticipated and that it would affect shares, which after the announcement fell 2.2 percent to £13.27 ($16.84).
Separately, Entain, which also operates online brands bwin and partypoker, noted that it expects its profit for the year to be in the range of £1 billion to £1.05 billion , which is an increase from the £993 million it posted last year. Entain’s net gaming revenue, including joint venture BetMGM, in the first half rose 19%, owing to a rise in online demand and growth in retail performance.
Amid the investigation of Sportingbet, former GVC members tried to install themselves as the management team of betting operator 888. However, 888 rejected the offer from FS Gaming Investment, which owns a 7% stake in 888, to appoint former GVC CEO Kenny Alexander as its new boss, citing the “potential risks” associated with the Turkey investigation. The company also noted that its license had been put under review due to FS Gaming’s investment.