Entain is bracing for a substantial UK financial penalty after a four year HM Revenue & Customs probe into tax and bribery offences by one of the Group’s former Turkish subsidiaries. The owner of Coral and Ladbrokes said it was in deferred prosecution agreement (DPA) negotiations with the Crown Prosecution Service (CPS) and is working towards achieving a resolution of the ongoing HMRC investigation. The HMRC began an investigation into the group’s former Turkish-facing online betting and gaming business, which it held from 2011 until it was sold in 2017, in November 2019.
In July 2020, HMRC widened the scope of the investigation and was examining potential corporate offending by an entity (or entities) within the group.
Barry Gibson, Chairman of Entain commented on the investigation and impending fine, stating: “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 per cent 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.”
Shares in the Isle of Man-based sports betting and gaming group fell by as much as 3.3 per cent after the announcement. Entain said the offences under investigation include, but were not limited to, section seven of the Bribery Act 2010. The relevant section of the act relates to the failure of UK commercial organisations to prevent bribery anywhere that they carry out business.
The company sold its Turkish business in December 2017, shortly before buying Ladbrokes Coral for £3.6bn. The company said in a statement that the HMRC 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.”