Entain braced for fine after Sportingbet bribery claims
Ladbrokes and Coral owner Entain have braced themselves for a hefty fine following Sportingbet bribery allegations
- ‘Potential corporate violation’ at Entain’s former Turkish subsidiary Sportingbet
- Analysts believe the fine could be up to £300 million
Ladbrokes owner Entain is gearing up for a hefty fine over bribery claims in Turkey as it becomes the latest gambling firm to get into trouble.
The gambling company warned investors yesterday that it expects an investigation by HMRC and the Crown Prosecution Service to result in a “substantial financial fine” in relation to a “potential corporate violation” at its former Turkish subsidiary Sportingbet.
The UK’s largest bookmaker said most violations are related to bribery laws, where a company fails to prevent a person from bribing another person or entity on their behalf.
Fine looming: Ladbrokes owner Entain said most violations are related to bribery laws
Entain could not estimate how much the fine would be or when the investigation would be completed, but analysts believe it could be as high as £300 million.
The investigation was first revealed by Entain in 2019, two years after it dumped the Turkish company ahead of its £4 billion takeover of Ladbrokes.
Barry Gibson, chairman of Entain, said: ‘We are eager to reach a resolution for a company that was sold by the group almost six years ago.’
He stated that it had undergone an “extraordinary transformation,” adding, “The board and leadership teams have been overhauled and 100 percent of our revenue now comes from regulated or regulatory markets.”
But the sale has been a source of controversy, with former Entain chief executive Kenny Alexander selling Sportingbet to IT service provider Ropso Malta, which was part-owned by a businessman with close ties to Alexander.
The company said at the time that the connections between the two had been fully explained, with the company being sold after a competitive process. But industry eyebrows continued to be raised.
Analysts said uncertainty over a fine is likely to weigh on the share price, but experts said the result of the HMRC investigation is unlikely to affect the UK gambling license that Entain, run by Jette Nygaard-Andersen, has – meaning the practical impact will be limited. .
Entain shares fell 4 percent, or 55.5 pence, to 1319 pence yesterday. The setback comes after a difficult few months for Britain’s biggest gambling firms.
Involve CEO, Jette Nygaard-Andersen
William Hill, which is owned by 888, was fined a record £19.2 million in April for failures that allowed customers to gamble £23,000 in minutes without checks.
Gambling Commission chief Andrew Rhodes said the deficiencies were so alarming that a suspension of the license was being considered.
This was the largest fine ever imposed by the commission, which is on a mission to crack down on operators.
888 also had trouble in the Middle East, with VIP accounts worth an estimated £50 million being frozen for failing to properly follow anti-money laundering processes.
The move coincided with the departure of CEO Itai Pazner and has raised questions about practices of London-listed companies abroad.
The Gibraltar-based group finally reinstated these bills in April, stating it had implemented “robust policies and procedures.”
But campaigners have said these practices contribute to a much wider problem.
Will Prochaska, Director of Gambling with Lives, said: “This Entain update is yet another sign of structural flaws in the modern gambling industry, whose business model is based on harming its customers and circumventing regulations designed to harm people and protect tax revenues.
“It’s been a long time since the industry needs to be cleaned up.”
Matt Zarb-Cousin, founder of online gambling blocker Gamban and former compulsive gambler, said: ‘The industry has been developed in a climate of non-compliance. And now it feels like the chickens are coming home to roost.’
He said regulators in the US will also closely monitor the results of this investigation.
The US has become an increasingly lucrative market for UK companies looking to expand as more regions legalize sports betting. Flutter has experienced great growth, with the success of the Fanduel brand.