Entain Shareholders Sue Over $760M Turkish Bribery Fine
Posted on: August 22, 2024, 06:43h.
Last updated on: August 23, 2024, 09:09h.
A group of investors in UK-based online gambling giant Entain (OTC: GMVHF) have filed a class-action lawsuit that seeks compensation for damage done to the company’s share price by a bribery probe into its former Turkish operations.
![Entain, shareholder lawsuit, class action, Turkey, Headlong, bribery, HMRC](https://www.casino.org/news/wp-content/uploads/2024/08/ENTAIN-858x515.jpg)
The complaint, filed Wednesday in London’s High Court by 20 institutional shareholders, demands $150 million in damages. It claims that Entain failed to properly inform investors of an investigation by the UK tax agency, HMRC, into bribery and corruption at the Turkish subsidiary, Headlong.
Ultimately, Entain would pay one of the biggest fines in UK corporate history, £600 million (US$760 million) to resolve the case. Shares in the company have almost halved since May 2023 when it warned shareholders of the impending penalty.
Shady Networks
Entain, then known as GVC Holdings, offloaded Headlong for free in December 2017 ahead of its proposed takeover of British legacy betting group Ladbrokes-Coral.
Online gambling is illegal in Turkey, and the company wanted to rid itself of black-market ops that might give regulators a reason to nix the Ladbrokes deal.
But once upon a time, Headlong accounted for a third of Entain’s revenues, and the company employed sketchy cash-collection networks and payment processors to hide transactions from Turkish financial institutions. It also, allegedly, bribed Turkish officials to turn a blind eye.
HMRC accused Entain of failing to stop Headlong employees from engaging in bribery. The unit was so poorly overseen that some of its employees were defrauding the parent company by siphoning off money.
Entain, which now owns half of BetMGM, could have been prosecuted under the UK Bribery Act but prosecutors ultimately decided against this because it could have resulted in the company losing licenses across the world, potentially putting thousands of jobs at risk.
Internal Unrest
Should the case proceed to trial, a judge will need to determine the degree to which the Turkish investigation caused Entain’s stock market downturn. There have been many other factors that have damaged its share price over the past few years, including a series of misfiring acquisitions.
Activist investors have lately taken an increasingly prominent position in the group and have voiced concerns about its strategic direction. This may have led to the resignation of then-CEO Jeannette Nygaard-Anderson in December 2023 amid rumors of internal unrest.
Andrew Williams, a partner at Fox Williams, the law firm that filed the complaint, said he hoped the lawsuit would “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.”
Related News Articles
Sheriff Gaming CEO Faces Four Years in Dutch Prison
Mystery Wynn Macau Director in $2.8M Bribery Case, Accused Pleads Guilty
Most Popular
SPHERE OF FAILURE: U2 Concert Film is Vegas Orb’s First Flop
VEGAS MYTHS RE-BUSTED: The Strip’s Naked City Was Named for Sunbathing Showgirls
Star Gold Coast Can Recoup $38.7M Debt from Billionaire Ex-Betting Exec
Wynn Las Vegas Strikes $130M DOJ Settlement, Largest Fine Ever for a US Casino
Most Commented
-
VEGAS MYTHS RE-BUSTED: You Don’t Have to Pay Resort Fees
August 2, 2024 — 17 Comments— -
VEGAS MYTHS RE-BUSTED: Elvis Was a Straight-Up Racist
August 9, 2024 — 11 Comments— -
ANTI-SOCIAL BEHAVIOR: Vegas Casino Buffet Stunt in Poor Taste Goes Viral
August 16, 2024 — 7 Comments—
No comments yet