Entain has obtained preliminary judicial approval for its legal compliance case at the Royal Courts of Justice, with final approval set to be sought on December 5th. The terms of the Deferred Prosecution Agreement (DPA) align with the original provision announced in August, which includes a financial penalty and disgorgement of profits totaling £585.0m (€674.0m/$736.1m). Entain will also be making a charitable donation of £20.0m and contributing £10.0m to CPS and HMRC costs.
The payments will be made in installments over the four-year term of the DPA. At the time of posting this article, Entain’s share price experienced a slight decrease of 2.38% at market opening, but had since rebounded to a 0.95% decrease by 3:35pm UK time.
This DPA is the result of an investigation by HMRC into Entain’s historical Turkish business. The company had previously stated in May that it anticipated a significant penalty in relation to the HMRC investigation. The investigation dates back to 2019 when HMRC requested additional information regarding Entain’s online betting and gaming operations. Prior to this request, the company, then known as GVC Holdings, had denied benefiting from its Turkish business, Headlong Ltd.
Entain’s chair, Barry Gibson, characterized the matter as a legacy issue involving a business that was sold six years ago by a former management team. He highlighted the significant changes the company has undergone since then, emphasizing its commitment to operating solely in regulated markets and maintaining high levels of corporate governance.
Entain emphasizes that participation in the DPA is voluntary and that it fully addresses investigations into its own business matters. The final court approval on December 5th will provide further clarity on the ramifications of this case for Entain.
The investigation into Entain’s Turkish operations led to significant changes within the company. Former CEO Kenny Alexander stepped down days before the investigation was announced, with Shay Segev taking over as his replacement and later moving on to DAZN. Jette Nygaard-Andersen succeeded Segev as CEO, and the company relocated its place of management and control from the Isle of Man to the UK.
The outcome of this case may have an impact on Entain’s financial position, including its licenses in various markets and future M&A activity. The company’s Q3 report indicated a slowdown in online net gaming revenue growth. Entain’s executives and board members have increased their shareholdings, potentially signaling confidence in the company’s future prospects.
Former executives involved with Entain at the time of the Turkish operations may still face charges, as today’s agreement specifically pertains to the company and its group, rather than former individuals. The settlement relates to alleged offenses under Section 7 of the 2010 Bribery Act, which requires companies to implement anti-bribery measures.
Entain will provide further updates on the case after the court hearing on December 5th.
