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Ladbrokes owner Entain will pay £615mn as recompense for failing to prevent bribery at its former Turkish subsidiary, as part of a deferred prosecution agreement that will resolve a years-long probe into the UK-listed gambling company.
The DPA with the Crown Prosecution Service was finalised in a London court on Tuesday for a term of four years. The deal brings an end to the corporate investigation by HM Revenue & Customs that was first disclosed by Entain in 2020. There may still be charges laid against individuals.
The deal follows alleged failures by Entain, which was named GVC Holdings at the time, to prevent bribery between July 2011 and December 2017, according to a public summary of the judgment. The alleged conduct occurred “primarily in Turkey” at a time when gambling in the country was not legal.
Dame Victoria Sharp, the judge presiding over the case, said in a written judgment that Entain’s co-operation — and the fact that there has been a “wholesale change of senior management and approach” — were key to the company’s eligibility for a DPA.
“One significant factor in this conclusion is that Entain is, both in form and substance, a different entity to GVC,” said Sharp. “The prosecution of Entain would have disproportionate consequences.”
Sharp said that, if the gambling company was prosecuted and convicted, it could lose its licences globally, which would put thousands of jobs at risk, while the revenue losses could damage shareholders, pension fund holders and supply chain providers.
Entain — which also owns the Coral and Bwin brands — has agreed to pay £585mn to settle the case, made up of a £465mn financial penalty and a £120mn disgorgement of profits. The gambling group will also donate £20mn to charity, and set aside £10mn to cover HMRC’s legal costs. The £615mn penalty is the second-biggest meted out by British courts since the DPA scheme began, behind a €991mn settlement with Europe’s aerospace champion Airbus agreed in 2020.
The resolution marks the first DPA the CPS has entered into since the UK introduced the tool in 2014. Under such a deal, a criminal prosecution is suspended based on certain conditions, which can include the company paying a fine, repaying profits, overhauling compliance and helping to bring cases against individuals. If a company breaches any of the DPA conditions a prosecution can resume.
Entain’s chair Barry Gibson hailed “the final step in a process that has hung over our business since HMRC launched its investigation”. The settlement will help to draw a line under legacy compliance issues at the gambling operator, which has also been hit with nearly £23mn in fines from the UK gambling regulator for social responsibility and anti-money laundering failures.
“Entain has now fundamentally and profoundly changed,” added Gibson. “We can now concentrate on the future.”
In late 2020, Entain vowed to withdraw from unregulated markets. By the end of this year, the group has said all of its revenues will come from nationally regulated gambling markets. But the costs associated with the DPA will continue to be a drag on earnings over the four-year term of the settlement.
Meanwhile, Entain is struggling with declining market shares for its US joint venture BetMGM and falling online revenues in core markets, such as the UK and Germany, which culminated in a revenue warning in September. The Financial Times reported last month that the company had three activists on its shareholder register, pushing for board seats and piling pressure on management.
Entain revealed in May this year that it expected to pay a large fine to settle the DPA discussions with British authorities. The deal was preliminarily agreed at a private court hearing last month.
The full judgment and statement of facts in the case will remain private until the conclusion of any related criminal proceedings against individuals, Sharp said.
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