Entain braced for fine after Sportingbet bribery claims

Ladbrokes and Coral owner Entain braced for hefty fine after Sportingbet bribery claims

  • ‘Potential corporate offending’ at Entain’s former Turkish subsidiary Sportingbet
  • Analysts believe the fine could be up to £300m 

Ladbrokes owner Entain is gearing up for a hefty fine over bribery claims in Turkey as it becomes the latest gambling firm to find itself in hot water.

The betting company warned investors yesterday that it expects an investigation by HMRC and the Crown Prosecution Service to result in a ‘substantial financial penalty’ relating to a ‘potential corporate offending’ at its former Turkish subsidiary Sportingbet.

The UK’s biggest high street bookie said most offences relate to bribery laws, which involve a company failing to prevent an individual bribing another person or entity on their behalf.

Looming fine: Ladbrokes owner Entain said most offences relate to bribery laws

Entain could not estimate how large the fine would be, nor when the investigation would be concluded, but analysts believe it could be up to £300million.

The investigation was first disclosed by Entain in 2019, two years after it dumped the Turkish business ahead of its £4billion takeover of Ladbrokes. 

Barry Gibson, chairman of Entain, said: ‘We are keen to achieve a resolution to a business that was sold by the group nearly six years ago.’

Stating that it had been through ‘extraordinary transformation’, he added: ‘The board and leadership teams have been overhauled and 100 per cent of our revenue is now from regulated or regulating markets.’

But the sale was 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 links to Alexander.

The company said at the time the connections between the two had been fully declared, with the business sold following a competitive process. But eyebrows in the industry were still raised.

Analysts said uncertainty about a fine was likely to weigh on its share price but experts said the result of the HMRC investigation was unlikely to affect the UK gambling licence which Entain, run by Jette Nygaard-Andersen, has – meaning the practical impact would be limited.

Entain shares dipped 4 per cent, or 55.5p, to 1319p yesterday. The setback comes after a rocky few months for Britain’s biggest gambling firms.

Entain chief executive, Jette Nygaard-Andersen

Entain chief executive, Jette Nygaard-Andersen

William Hill, which is owned by 888, was whacked with a record £19.2million penalty in April for failures that let customers gamble £23,000 in minutes without checks.

Gambling Commission chief executive Andrew Rhodes said the failings were so alarming that a licence suspension had been considered.

This was the largest fine ever handed down by the commission, which has been on a mission to crack down on operators.

888 also had trouble in the Middle East, with VIP accounts worth an estimated £50million being frozen over failures to correctly follow anti-money laundering processes.

The action coincided with the departure of chief executive Itai Pazner and has raised questions about practices by London-listed firms overseas.

The Gibraltar-based group eventually reinstated these accounts in April, stating that it had implemented ‘robust policies and procedures’.

But campaigners have said that these practices feed into a much wider issue.

Will Prochaska, director of Gambling with Lives, said: ‘This Entain update is yet another sign of structural failings in the modern gambling industry, the business model of which is based on harming its customers and circumventing regulations designed to protect people and tax revenues.

‘It’s long-gone time for the industry to be cleaned up.’

Matt Zarb-Cousin, founder of online gambling blocker Gamban and who is a former gambling addict, said: ‘The sector has been developed under 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 be keeping a close eye on the result of this investigation.

The US has been an increasingly lucrative market for British firms looking to expand as more regions legalise sports betting. Flutter has had major growth, with the success of its Fanduel brand.

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