Entain allocates £585 million provision for ongoing deferred prosecution agreement

Lea Hogg 8 months ago
Entain allocates £585 million provision for ongoing deferred prosecution agreement

Multinational sports betting and gaming company Entain, has set aside a substantial provision of £585 million in relation to its ongoing negotiations for a deferred prosecution agreement (DPA) with the Crown Prosecution Service (CPS). The provision has been established in connection with the operator’s efforts to resolve an investigation initiated by HMRC into its past business operations in Turkey.

Divested its Turkish business

Formerly known as GVC Holdings, Entain divested its Turkish business in 2017. The current endeavor aims to address the historical business practices that came under scrutiny. Entain’s optimism regarding the likelihood of resolving the HMRC investigation has prompted the allocation of this provision. However, it’s important to note that the specific terms of the DPA are contingent upon judicial approval, which the company anticipates seeking in the fourth quarter of 2023.

To facilitate a potential settlement, Entain has earmarked the aforementioned provision of £585 million, which if utilized, would be distributed over a span of four years. This settlement relates to alleged violations of Section 7 of the 2010 Bribery Act. Section 7 refers to the failure of a commercial entity to establish mechanisms that could deter individuals associated with the company from engaging in acts of bribery to benefit the company.

The provision allocated by Entain for this purpose is based on the assumption that Entain will be granted full commendation for its extensive collaboration throughout the course of the investigation, both prior to and subsequent to entering into the deferrd prosecution agreement (DPA) negotiations.

Review of anti-bribery policy

Barry Gibson, Chairman of Entain, (pictured above) expressed, “In light of our comprehensive overhaul of business practices, strategic direction, and corporate culture in recent years, the current iteration of Entain is a far cry from its predecessor GVC.”

Entain has now taken proactive measures, including a thorough review of anti-bribery policies and procedures. Enhancements have also been made for a more thorough compliance framework.

The company’s board released a statement indicating that the company intends to bring closure to this matter and conclude the chapter concerning historical issues involving past third-party associates and former employees of Entain.

Barry Gibson further affirmed, “We are encouraged by the significant strides we’ve made in addressing this historical matter, which traces back to a business divestiture executed nearly six years ago by a previous management cohort. Our collaboration with the CPS during this process has been instrumental, and they have acknowledged our robust cooperation.”

Gambling Commission launched review on Kenny Alexander’s position

At the time of the alleged infridgement, Kenny Alexander held the position of Chief Executive Officer. He had been a potential candidate for a return to the UK’s gambling sector as the CEO of 888, following substantial investment by FS Gaming. However, the negotiations between 888 and Alexander fell through due to reservations expressed by the Gambling Commission in light of the ongoing HMRC investigation.

Isle of Man-based Entain owns Ladbrokes. At present, shares of Entain Plc (ENT.L) are trading at GBp1,342.00, reflecting a decrease of -2.75 percent.

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