Entain facing 'substantial' fine after HMRC investigation into former Turkish business
Entain has said it is facing a "substantial" financial penalty following an investigation by HM Revenue & Customs (HMRC) into the company's former online gambling business in Turkey.
The parent company of Ladbrokes and Coral said it acknowledged "that historical misconduct involving former third party suppliers and former employees of the group may have occurred".
Entain added that offences under investigation included section 7 of the Bribery Act 2010.
The HMRC investigation first came to light in November 2019 with the authorities asking for information regarding the Turkish-facing business Entain held between 2011 and 2017.
At that time Entain understood HMRC’s investigation was directed at a number of former third-party suppliers, relating to the processing of payments for online betting and gaming in Turkey.
However, in 2020 it was announced that HMRC was widening the scope of its investigation and was examining potential corporate offending within the group.
Entain told the City on Wednesday that it was in "deferred prosecution agreement" negotiations with the Crown Prosecution Service (CPS) – under which a prosecution is suspended provided an organisation meets certain specified conditions – and was working towards achieving a resolution of the ongoing HMRC investigation.
It added: "While the company cannot say at this stage what the consequences of the investigation will be, it is likely that they will include a substantial financial penalty which is yet to be determined. The company cannot identify reliably at this stage the size of any financial penalty."
Entain chairman Barry Gibson said the company would continue to work closely with the CPS and HMRC to ensure the matter is concluded as soon as possible.
He added: "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."
Entain's share price was down 29.5p or 2.15 per cent at 1,345p on Wednesday morning following the announcement.
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