Entain in Storm: Class Action Against Gaming Giant
•
12 Sep 2024 •
Reading time: 2 minutes British gambling giant Entain, owner of Ladbrokes Coral and Sportingbet, is facing a new storm. After being fined nearly £600 million, Entain is now facing the wrath of its investors.
Corruption in Turkey
The scandal dates back several years. Entain, then known as GVC Holdings, had been implicated in corruption and money laundering through its Turkish subsidiary, Sportingbet Turkey. The latter had been accused of paying bribes to Turkish officials to obtain preferential treatment.
Following this, Entain was fined £585 million (approximately €700 million) by the UK Revenue and Customs Service, the largest penalty of its kind in the country’s history, for historical corruption and money laundering violations by a Turkish subsidiary.
Entain eventually agreed to pay a £600 million (approximately €710 million) fine to settle the case. The amount is one of the largest financial penalties ever imposed on a company in the UK.
Investors seek compensation
The scandal has had a direct impact on Entain’s share price, which has fallen by almost half since May 2023. A group of 20 major Entain shareholders have filed a lawsuit against the company in the UK High Court, seeking compensation for the share price decline.
Law firm Fox Williams has announced that it is preparing a class action against Entain. The plaintiffs accuse the company of failing to disclose the risks associated with its operations in Turkey. They say Entain should have informed its investors of the ongoing investigation by the UK tax authorities.
Entain has acknowledged the existence of the legal proceedings but said they are in their early stages. The company intends to vigorously defend itself against any proceedings.
The case is expected to be heard in the UK High Court later this year.
Potential consequences
If the class action is successful, Entain could be ordered to pay millions of pounds in compensation to injured investors. The case could also have significant consequences for the company’s reputation and for the wider UK gambling industry.
The Turkish scandal and the resulting class action represent a further blow to Entain. The company now faces a crisis of confidence and major legal challenges. It will have to work hard to restore investor confidence and rebuild its reputation.