Entain Facing £100M Class Action Lawuit Over Turkish Bribery Probe
UK online gambling giant Entain is facing a class-action lawsuit from investors that could see it on the hook for £100 million (US$118 million.)
Entain’s Turkish arm, Headlong, was so poorly overseen that employees were bribing Turkish officials and embezzling money from the online gambling giant, according to HMRC. (Image: ted Learning)
London-based law firm Fox Williams says it is preparing to file the suit. It accuses Entain of failing to keep investors abreast of an investigation by HMRC, the UK tax body, into bribery and corruption at its former Turkish arm.
In November 2023, Entain agreed to pay £600 million (US$760 million) to resolve the case, one of the biggest corporate fines ever seen in the UK.
Shares in the company have nearly halved since May 2023 when it warned shareholders it expected to pay a “substantial financial penalty.”
Fox Williams said this week argued Entain had failed to “report honestly (or at all) to investors regarding its knowledge of (among other wrongdoing) bribery and corruption” in its Turkish subsidiary, Headlong, between 2011 and December 2017.
Palms Greased
Headlong once accounted for a third of Entain’s revenues. Online gambling is illegal in Turkey, and so the subsidiary had been using shady cash-collection networks and payment processors to hide transactions from Turkish financial institutions. It had also allegedly been bribing Turkish officials to turn a blind eye to the operation.
Entain, then known as GVC, offloaded Headlong for free in December 2017 to grease the skids on its takeover of Ladbrokes-Coral, which completed in March 2018. Clearly, it was felt that its Turkish ops would not sit well with UK regulators scrutinizing the Ladbrokes deal, or with potential financiers.
HMRC announced in July 2020 that it was examining “potential corporate offending” by the Turkish arm, which sent Entain’s shares spiraling by 12%.
Ultimately, Entain was accused by HMRC of failing to have the right protocols in place to stop Headlong employees engaging in bribery. In fact, the unit was so poorly overseen that some of its employees were siphoning off money.
Corporate Misbehavior
Entain could have been prosecuted under the UK Bribery Act, but there were concerns this could result in it losing its licenses globally, putting thousands of jobs at risk.
This claim will offer institutional investors the opportunity to recover substantial losses but more importantly serve to improve transparency and governance within the UK’s gambling sector, reminding public companies that they need to take their disclosure obligations seriously,” Andrew Hill, a partner at Fox Williams said.
“Hopefully this will therefore have the knock-on effect of improving corporate behavior, because public companies should know that their shareholders won’t let them get away with misconduct,” he added.
Entain said it was unaware of any litigation but added it would defend any such action “robustly.”
The post Entain Facing £100M Class Action Lawuit Over Turkish Bribery Probe appeared first on Casino.org.
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