Entain sets aside half a billion for investigation into alleged Turkish bribery offences
Ladbrokes owner Entain has set aside an ‘eyewatering’ £585m to cover a potential settlement as it nears an end of a bribery investigation into its legacy Turkish facing business, launched in 2019.
In an update posted this morning, the global betting giant said it has “a sufficient degree of confidence to take a provision of £585m against a potential settlement”, to resolve the alleged bribery offences.
The provision would be paid over four years if approved by the court.
The FTSE 100 company said the offences under investigation at its Turkish facing business, which it held between 2011 and 2017, include breaching the bribery act.
Shares in the company were down over 1.3 per cent on Thursday morning.
Chairman Barry Gibson said: “We are pleased to be making good progress towards drawing a line under this historical issue.
“Following a complete overhaul of our business model, strategy and culture in the last few years, the Entain of today bears no resemblance to the GVC of yesterday,” he added.
“This is eye-watering stuff,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.
“The Turkish business was sold for €150m, so the provision, which likely closely matches an impending fine, is roughly 4x the value received in the sale,” he explained.
Matt Britzman, equity analyst at Hargreaves Lansdown, said Entain and investors alike are keen to draw a line under the investigation.
“But nonetheless, this entire set of events highlights why governance is so important and shines a spotlight back on a sector that’s come under scrutiny plenty of times in the past,” he said.
In a separate trading update, Entain announced its interim results.
The gambling giant reached a record number of active online users in the six months ending 30 June, up 23 per cent year on year.
Jette Nygaard-Andersen, chief executive of Entain, said: “We are making excellent progress in broadening our customer base and deepening our audience engagement, as evidenced by the record number of active online customers on our platform.
“This clear focus on driving sustainable long term growth combined with our global operating capabilities underpins our confidence in our prospects for FY23 and beyond and delivering value for our shareholders.”
In June, it began a 25 year partnership with TAB NZ, giving the company “unrestricted access” to the regulated New Zealand market.
In April, the government announced its gambling white paper to reform the betting industry.
Gambling companies will be subject to tighter regulations including a statutory levy and stricter checks on losses.