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Entain Reaches £585.0m Settlement in Turkish Operations Case

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Entain, a prominent player in the gaming industry, has taken a decisive step towards resolving its historical legal predicament. The company has reached a groundbreaking Deferred Prosecution Agreement (DPA) in principle with the Crown Prosecution Service (CPS) concerning its past activities in Turkey. With preliminary judicial approval secured, Entain is now poised for a final judicial review on December 5th. This monumental agreement, which entails a substantial £585.0 million settlement, aims to bring closure to the case, shedding light on a complex chapter in the company’s history.

Entain, a leading name in the gaming industry, is charting a path towards resolution in a significant legal case involving its historical activities in Turkey. The company has successfully reached a Deferred Prosecution Agreement (DPA) in principle with the Crown Prosecution Service (CPS). This landmark development marks a critical juncture in addressing past issues related to its Turkish operations.

The DPA, which received preliminary judicial approval at the Royal Courts of Justice, is a pivotal step towards finalizing the agreement. Entain is scheduled to seek the crucial final judicial approval on December 5th. This agreement’s terms align closely with the provisions announced earlier on August 10th, outlining Entain’s commitment to address its historical business matters.

Under the terms of the DPA, Entain has agreed to a substantial financial settlement totaling £585.0 million. This includes both a financial penalty and disgorgement of profits. Additionally, the company has undertaken to make a charitable donation of £20.0 million and contribute £10.0 million to cover the costs incurred by CPS and HMRC (Her Majesty’s Revenue and Customs). These financial commitments will be disbursed in installments throughout the four-year term of the DPA, starting from the date of final court approval.

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Entain’s decision to enter into this Deferred Prosecution Agreement underscores its commitment to addressing historical issues in a transparent and responsible manner. This case is related to an investigation by HMRC into Entain’s historical Turkish business activities, a matter that dates back to 2019. At that time, HMRC sought additional information from GVC Holdings, which was the company’s name before it rebranded as Entain. The inquiry was specifically related to online betting and gaming operations in Turkey.

Barry Gibson, Chairman of Entain, emphasized the evolution of the company since the events in question. He stated, “This legacy matter concerns a business which was sold by a former management team six years ago. The group has changed immeasurably since these events took place, and the DPA process has provided a reminder of the stark differences between the GVC of yesterday and the Entain of today.”

Entain’s commitment to operating exclusively in regulated markets reflects its dedication to responsible corporate governance. Over the years, the company has earned recognition as a best-in-class operator, upholding the highest standards of corporate governance across all facets of its business operations.

The case’s historical context involves GVC’s ownership of the Turkish subsidiary Headlong Limited from 2011 to 2017. Subsequently, the business was sold to Ropso Malta Limited, a deal that included a performance-related earn-out of up to €150 million. While GVC later waived the earn-out to facilitate approvals for Ladbrokes Coral, reports persisted that the company continued to benefit from Turkish operations.

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The HMRC investigation initially focused on seeking additional information but gradually expanded its scope to encompass “potential corporate offending” in 2020. Entain had previously indicated that the inquiry pertained to former third-party suppliers, later clarifying that there was no connection between its former payment subsidiary Kalixa, the collapsed Wirecard, and the Turkish operations.

This legal journey prompted significant changes within Entain. In 2020, Kenny Alexander, then CEO, stepped down, leading to the appointment of Shay Segev, who later moved to the position of CEO at sports streamer DAZN. Currently, Jette Nygaard-Andersen holds the CEO title. Furthermore, Entain underwent corporate restructuring and rebranding in 2020, reflecting its commitment to responsible and ethical business practices.

In the wake of this recent agreement, it is important to note that it pertains specifically to Entain’s business and the group as a whole. This suggests that former executives who were associated with the company during the period in question may still face charges.

The settlement addresses alleged offenses under Section 7 of the 2010 Bribery Act, which requires businesses to establish proper procedures to prevent individuals associated with the company from engaging in bribery for the organization’s commercial gain. Entain had previously acknowledged historical misconduct involving former third-party suppliers and group employees.

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The impact of this case continues to reverberate, especially for individuals who were leading Entain at the time. Notably, Kenny Alexander, along with former chair Lee Feldman and former CFO Stephen Morana, faced challenges when they attempted to assume leadership roles at 888 Holdings earlier this year. While FS Gaming, an investment vehicle backed by this trio, initially acquired a 6.57% stake in 888 Holdings, their efforts were met with a regulatory intervention by the Gambling Commission. The case’s connection to the Turkish operations raised concerns, leading to the suspension of the proposed leadership change. As a result, 888 Holdings appointed Per Widerström as CEO in July.

Entain intends to provide further updates on the case following the next court hearing scheduled for December 5th.

Jerome, a valuable addition to the Gamingo.News team, brings with him extensive journalistic experience in the iGaming sector. His interest in the industry was sparked during his college years when he participated in local poker tournaments, eventually leading to his exposure to the burgeoning world of online poker and casino rooms. Jerome now utilizes his accumulated knowledge to fuel his passion for journalism, providing the team with the latest online scoops.

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FDJ’s Acquisition of Kindred Group Shaping the Future of Global Gaming

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FDJ’s acquisition of Kindred Group, facilitated by regulatory approval and strategic shareholder engagement, signifies a transformative moment in the gaming industry. This deal exemplifies the intricate balance between regulatory compliance, shareholder value, and strategic growth ambitions. As the industry stands at the cusp of further consolidation and innovation, the FDJ-Kindred transaction heralds a new era of strategic realignment and competitive positioning in the global gaming landscape.


A Monumental Shift in Gaming Dynamics

The Swedish Financial Market Supervisory Authority (SFSA)‘s approval of Française des Jeux’s (FDJ) offer to acquire Kindred Group marks a pivotal moment in the global gaming and betting sector. This green light not only accelerates FDJ’s strategic expansion but also underscores the evolving landscape of international gaming regulations and corporate alignments.

Navigating Regulatory Waters

The SFSA’s endorsement is a crucial step in FDJ’s ambitious acquisition plan, setting the stage for a public offer slated to commence imminently. This regulatory approval highlights the meticulous scrutiny and compliance standards governing mergers and acquisitions within the sector, ensuring that such transactions align with market stability and shareholder interests.

A Call to Action for Kindred Shareholders

The forthcoming Extraordinary General Meeting (EGM) represents a critical juncture for Kindred Group, with proposed statutory amendments necessary for facilitating the acquisition. This meeting, aimed at achieving the requisite shareholder consensus, signals the importance of shareholder engagement in steering corporate direction and strategy.

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The Path to Acquisition: Shareholder Conviction and Strategic Vision

FDJ’s pursuit of Kindred Group, contingent upon securing 90% of total capital, reflects a strategic maneuver to consolidate its position in the global gaming market. The offer per share, valuing Kindred at approximately €2.6 billion, has garnered unanimous board endorsement and significant shareholder backing, illustrating the alignment of strategic interests and the perceived value of this consolidation.

Activist Influence and Strategic Realignment

The role of activist shareholders, notably Corvex Management, in advocating for Kindred’s sale underscores the dynamic interplay between corporate governance and shareholder activism. Their successful campaign for board representation and strategic evaluation reflects a broader trend of active investor engagement in shaping corporate trajectories.

Implications for the Global Gaming Industry

This acquisition not only exemplifies the financial and strategic considerations underpinning such deals but also highlights the regulatory complexities and shareholder dynamics involved. As the gaming industry continues to evolve, driven by technological advancements and regulatory changes, the FDJ-Kindred merger serves as a case study in strategic growth, market consolidation, and the pursuit of competitive advantage.

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