iGaming giant Entain has once again found itself in the spotlight, but this time for far less glorious reasons. Former executives of the company, including its ex-CEO, have decided to file a lawsuit against their former employer, accusing the company of breaching privileges in previous legal proceedings. This case, which could have major repercussions for Entain’s reputation and finances, raises crucial questions about the company’s internal practices.
The origins of the conflict
To understand this case, we need to go back several years. Entain, then known as GVC Holdings, was under fire for its activities in Turkey, a market where online gambling regulations were unclear.
Between 2011 and 2017, GVC Holdings operated online gambling services in Turkey, a country where online gambling was banned. Despite this ban, the company continued to operate, generating substantial revenues. In December 2017, anticipating regulatory and legal complications, GVC decided to withdraw from the Turkish market by divesting its operations.
In 2019, HM Revenue & Customs (HMRC) in the UK launched an investigation into GVC Holdings, focusing on allegations of bribery relating to its former Turkish operations. The charges focused on failures by the company to prevent acts of bribery, in breach of Section 7 of the Bribery Act 2010. These alleged offences were said to have taken place primarily in Turkey during the period that GVC was active there.
In 2023, Entain entered into a deferred prosecution agreement with HM Revenue & Customs (HMRC) in the UK, agreeing to pay £585 million to end the investigation. The agreement also included a charitable donation of £20 million and the payment of £10 million to cover legal costs. The law firm Addleshaw Goddard (AG) advised Entain throughout these proceedings.
Legal action by former directors
Alexander and Feldman claim that AG disclosed confidential information about them without their prior consent. They argue that, as former directors, they were also clients of AG and that any information concerning them should have remained protected by professional secrecy. They claim that Entain used illegally obtained confidential information to incriminate them in the case.
The two former directors are seeking a court declaration confirming their status as clients of AG. If the court recognises this status, it would mean that the legal advice provided by AG to Entain should also be available to them. Such recognition could potentially strengthen their position in any future litigation relating to this case. In addition, the case risks damaging Entain’s reputation, which has already been weakened by previous scandals.
Implications for Entain
For the time being, Entain is remaining discreet about this affair. The company has declined to comment publicly on the accusations.
The legal action comes at a sensitive time for the company, which is already in the spotlight due to the HMRC investigation and the deferred prosecution agreement. The company could face additional challenges if the court rules in favour of its former directors. Such a decision could lead to a reassessment of internal practices for managing confidential information and relationships with external law firms.
Entain
Entain PLC is a UK company specialising in sports betting and online gaming. Founded in 2004 as GVC Holdings, it changed its name in 2020 to reflect its commitment to responsible gambling.
It owns a number of popular brands including Ladbrokes, Coral, Bwin, PartyPoker and Sportingbet, operating both online and via physical outlets. It has a presence in many countries.
The company has recently found itself in the spotlight due to its legal and regulatory problems. Despite this, it continues to invest in innovation and expansion into new markets, including the US and Latin America.