(qlmbusinessnews.com Thur, 10th Aug, 2023) London, UK —
Entain, the British gambling company, announced on Thursday that it has reserved £585 million ($744.5 million) in anticipation of a potential settlement with British tax authorities in connection with an investigation into potential bribery activities linked to its former Turkish business.
The UK's tax authority, HMRC, conducted an inquiry that encompassed a review of Entain's former business in Turkey. The company acknowledged the possibility of historical misconduct involving former third-party suppliers and former employees of the group.
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The parent company of Ladbrokes and Coral betting shops has been engaged in discussions regarding a deferred prosecution agreement with the Crown Prosecution Service and expressed optimism about reaching a resolution.
The settlement, payable over a four-year period, will have an impact on the company's financial performance across those years, stated Chief Finance Officer Rob Wood.
Entain anticipates receiving judicial approval during the fourth quarter.
In early trading, the company's shares experienced a decline of up to 3%.
HMRC initiated an investigation in 2019 targeting several former third-party suppliers involved in processing payments for online betting and gaming activities in Turkey. Entain, previously known as GVC, divested the business in 2017.
This investigation also triggered challenges for the bookmaker 888, whose UK operating license underwent review by the GB Gambling Commission. The review arose when shareholder FS Gaming suggested appointing individuals with past senior roles at GVC to executive positions at 888. These candidates had occupied significant roles during the period under scrutiny by authorities.
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In a separate announcement, Entain, which also manages online brands like bwin and partypoker, projected its core profit for the year to range between £1 billion and £1.05 billion.
According to a consensus compiled by the company, analysts had an average expectation of core profit around £1.03 billion.
The gambling company reported a 14% surge in net gaming revenue for the first half of the year ending in June, attributed to a record number of online active customers.
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