Entain reaches Deferred Prosecution Agreement with CPS
Entain PLC (Entain) one of the world’s largest sports betting and gaming groups which now owns Ladbrokes and Coral has had a Deferred Prosecution Agreement (DPA) with the Crown Prosecution Service (CPS) approved by the High Court.
Under the terms of the DPA which comes into effect today, Entain has agreed to pay a financial penalty plus disgorgement of profits totalling £585m. It will also make a charitable donation of £20m and contribute £10m towards CPS and HMRC costs.
The total financial penalties will be paid by instalments over a period of four years.
In imposing the penalties totalling £615m, the Court considered Entain’s "exemplary" co-operation with HMRC and the CPS and the comprehensive change of senior management and an overhaul of culture and practices.
DPAs involve companies reaching an agreement with a prosecutor, where the company is charged with a criminal offence, but proceedings are automatically suspended. The company agrees to a number of conditions, which may include payment of a financial penalty, payment of compensation and implementation of a corporate compliance programme. If the company complies with all the conditions of the DPA, criminal charges will not be instituted.
DPAs can be used for fraud, bribery and other economic crime. They apply to organisations and not to individuals. The proceedings against Entain, which included four counts under section 7 of the Bribery Act 2010 (failure to prevent bribery) are automatically suspended.
DPAs do not rule out the possibility of criminal prosecutions of individuals.
In November 2019, HMRC launched an investigation into the activities of the Turkish-facing business of Entain (then known as GVC Holdings), its third-party suppliers, and former employees for alleged bribery offences, in failing to have the correct procedures in place to stop people taking part in bribes that benefit the business.
Whilst the Entain DPA is the UK’s 13th, it is the first one agreed with the CPS. The previous twelve DPAs have all been agreed with the SFO.
Barry Gibson, Chairman for Entain, stated:
"This is the final step in a process that has hung over our business since HMRC launched its investigation into a business that was sold by a former management team six years ago. We have cooperated extensively and proactively at every stage of the process which, I am pleased to say, has been recognised by the Court. Entain has now fundamentally and profoundly changed. We can now concentrate on the future."
In terms of corporate compliance, the DPA acknowledged that Entain has introduced significant enhancements to its ethics & compliance programme including to strengthen its internal controls, policies, and procedures regarding compliance with the Bribery Act 2010 and other applicable anti – bribery and corruption laws. Entain has also substantially implemented the recommendations of external group-wide compliance reviews conducted since December 2020.
Comment
From the gambling perspective, it is noteworthy that as part of the DPA, Entain has been required to exit four jurisdictions in Central and South America within 12 months (Mexico, Brazil, Peru and Chile). These are jurisdictions which are not as yet subject to full gambling regulation but where the process is underway. Entain is allowed to seek an extension of the 12 month period from CPS where there are reasonable grounds to consider that the process of regulation will be completed within a reasonable period.
The DPA references that Entain has exited 140 markets where there was no clear path to regulation.
Until such time as the Statement of Facts is issued it is not possible to interpret the meaning of non-legal markets as referenced in the judgment of the President of the King’s Bench Division in approving the DPA.
However, the Statement of Facts cannot be issued as there are individuals who remain the subject of investigation.
The comments from the CPS Chief Crown Prosecutor will reverberate across the gambling industry:
The wider gaming industry may wish to reflect on the implications of this agreement for their own corporate compliance procedures and, where appropriate, take action to address and report any failings they identify.
The CPS will continue to work closely with law enforcement partners in this area, such as HMRC, as well as the industry regulator, the Gambling Commission”.
For further information regarding Deferred Prosecution Agreements, or if you have any regulatory or financial crime queries, please contact Colette Kelly or Andrew Cotton
