BetMGM’s Entain to pay to UK Authorities $729m for Turkish Bribery Case

• Daniel Horvat
• November 27, 2023

Entain, the 50-50 join owner of BetMGM, is forced to pay $729m to settle a case regarding bribery in Sportingbet, its now-defunct brand, on the Turkish market until 2017.

In the high-stakes world of international gambling, a scandal has erupted that has sent shockwaves through the industry. Entain, the corporate giant behind Ladbrokes and Coral betting shops, as well as a joint-owner of BetMGM with MGM Resorts International, has found itself at the center of a storm of controversy. The company, which once held sway over the Turkish market, stands accused of serious bribery offences.

The allegations are as damning as they are significant. Entain is charged with failing to prevent its former employees and third-party suppliers from engaging in bribery that would benefit the business. The charges suggest a systemic failure within the company to uphold ethical standards and maintain robust anti-bribery procedures.

The case revolves around alleged bribery offences at Entain’s former Turkish subsidiary, Sportingbet, which operated between 2011 and 2017.

The UK’s Crown Prosecution Service (CPS) and HM Revenue and Customs have been investigating “potential corporate offending” by the Turkish-facing online betting and gaming business. The offences under investigation include, but are not limited to, section seven of the Bribery Act 2010, which holds businesses liable for failure to prevent bribery.

The fallout from the scandal has been swift and severe. Entain’s shares took a hit, falling 3.3% on the news of the impending financial penalty. But the real blow came in the form of a staggering £585 million ($729 million) settlement. This colossal sum, to be paid over a four-year period, is a clear indication of the gravity of the allegations. It’s a price tag that speaks volumes about the potential consequences of allowing this case to proceed to the final verdict.

If the case wasn’t settled early, there surely would have been much more significant offenses than ‘failing to prevent bribery’, and, perhaps worse than that, the details of what happened exactly would have been revealed to the public.

The settlement is pending judicial approval of a deferred prosecution agreement. If approved, it will mark one of the largest penalties of its kind. The money will go to the UK’s Crown Prosecision Service, a stark reminder of the cost of corporate malfeasance.

Entain’s chairman Barry Gibson released a damage control statement that “the company is pleased to be making good progress towards drawing a line under this historical issue”.

Supposedly, being fined $729m is a positive thing.

This isn’t the first time Entain is facing action by the prosecutors and one must wonder if these fines are simply treated as a cost of doing business the Entain way.

In 2022, Entain Plc was fined £17 million by the UK Gambling Commission (UKGC) due to serious social responsibility and anti-money laundering failures across its online and retail businesses. The regulatory failures included:

Being slow to interact with, or not interacting with, certain customers in a way which minimised their risk of experiencing harms associated with gambling.

Allowing customers subject to enquiries and restrictions to open multiple accounts with the Licensee’s other brands.
Overseeing the failure of local staff or area managers to escalate potential concerns with customers sooner.
Failing to conduct an adequate risk assessment of the risks of their online business being used for money laundering and terrorist financing.

Allowing online customers to deposit large amounts without carrying out sufficient Source of Funds (SOF) checks.
This fine was issued on August 17, 2022. It’s worth noting that this is not the first time Entain has been fined by the UKGC. The company had previously settled a £5.9 million penalty for compliance failings. The UKGC has made it clear that further serious breaches could result in the removal of Entain’s license.

If Entain’s UK license was removed, it would mean that Ladbrokes and Coral, the mainstays of the British sports betting scene, that have over 3,300 betting shops across the UK combined, would lose the license because of corporate greed.

BetMGM has been performing exceptionally well, with a net revenue from operations of $1.44 billion in FY 2022, surpassing prior expectations. This represents a same-state growth in net revenue from digital operations of 51%.

BetMGM operates in 25 jurisdictions, providing access to approximately 45% of the adult population in the United States. The company expanded its online footprint in 2022 with launches in six new markets: New York, Louisiana, Illinois, Ontario, Kansas, and Maryland. It also opened four new retail sportsbooks, including the first retail sportsbook at an NFL stadium, the State Farm Stadium, home of the 2023 Super Bowl.

In terms of market share, BetMGM dominates the online casino and online poker play with a 30% market share. It also holds a 20% share of sports betting markets in which it operated from day one. Overall, it has a 13% sports-betting market share. BetMGM is the largest internet casino company in the US and the second-largest online sportsbook operator.

BetMGM is active in the following states in the USA: Arizona, Colorado, Washington D.C., Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wyoming.

As for casino services, BetMGM offers them in the following states: Michigan, New Jersey, Pennsylvania, West Virginia.
Entain is all about sports betting, and it owns the following brands: Ladbrokes, Coral (UK), BetMGM (USA), Ladbrokes (Australia), TAB (New Zealand), Eurobet (Italy), Sportingbet (South America), Supersport (Croatia), STS (Poland), BetCity (The Netherlands), Bwin (Germany, Belgium, France, Italy, Spain).