Hefty fine in the cards
Gambling group Entain is facing yet another significant fine from the UK authorities.
The company was hit with a then record-breaking £17m ($21m) financial penalty by the UK Gambling Commission (UKGC) in August 2022 for social responsibility and anti-money laundering failings. Now, Entain is in hot water again over potential bribery involving its former online gambling business in Turkey.
Entain is cooperating with the Crown Prosecution Service
The Ladbrokes parent company revealed on Wednesday that it expects to receive a significant fine on the back of an investigation by the UK’s public prosecutor and tax authority. It cannot estimate the size of the penalty, but analysts speculate that the sum could reach as high as £300m ($373m). Entain is cooperating with the Crown Prosecution Service and His Majesty’s Revenue & Customs (HMRC) on the matter.
Suspicions of bribery offenses
Entain disclosed in 2019 that an HMRC investigation was underway in relation to possible “corporate offending” at its former Sportingbet subsidiary in Turkey. The business was under the firm’s ownership between 2011 and 2017.
Most of the offenses fall under section seven of the Bribery Act, which relates to a person associated with an entity bribing “another person intending to obtain or retain business or a business advantage for the organization.” Investigators initially just looked at third-party suppliers, but expanded the scope of their probe to include former employees and entities of the group.
Entain wiped its hands of the Turkish subsidiary in 2017, but questions were raised at the time regarding the transaction. The group’s former chief executive Kenneth Alexander sold it to a company that was part-owned by a businessman to whom he had links.
Another hit to its reputation
When Entain received a £17m fine last year from the UKGC, it came with a warning that its license could be in jeopardy if the company committed further transgressions. As the alleged failings in Turkey are a historical issue, it is unlikely that the UKGC would take such drastic action over this particular matter.
That didn’t stop investors from reacting negatively to the news on Wednesday, with Entain’s share price dropping 4%.
Despite the recent hits to its reputation, Entain has been making changes to try to prevent similar issues from arising again. The firm’s leadership and board have changed significantly in recent years and its revenue now comes completely from “regulated or regulating” markets.