Later last year, Entain plc (formerly GVC Holdings plc), an international sports betting and gambling company headquartered in London, concluded a deferred prosecution agreement (DPA) with the UK Crown Prosecution Service (CPS). It was for the first time that the CPS was a party to such an agreement: before that it had only been the Serious Fraud Office (SFO) to conclude DPAs, including those related to corruption offences.
The investigation into the infringement of section 7 of the UK Bribery Act (failure of commercial organisations to prevent bribery) followed the investigation conducted by His Majesty’s Revenue & Customs (HMRC) with regard to the Turkish branch of the company sold six years before that. The proceedings were held behind closed doors because of the ongoing prosecution against certain natural persons. This is the reason why the details of the corruption schemes remain unknown, except for the fact that the alleged misconduct took place in the period between July 2011 and December 2017 in Türkiye where gambling is not legalized.
Under the four-year DPA, the company is obliged to undertake the following measures by its expiry:
- Pay GBP 585,000,000 in the form of sanctions, including:
1) A financial penalty of GBP 465,000,000;
2) A disgorgement of GBP 120,000,000 of illegally obtained profits;
- Make a charitable payment of GBP 20,000,000 under the memorandum to be concluded between Entain and the CPS, which is not a standard term that had never been included by UK law enforcement in DPAs;
- Pay the CPS’s and the HMRC’ legal costs in an amount of GBP 10,000,000;
- Undertake gambling operations only in regulating markets;
- Continue to analyse and improve its compliance programme, as may be necessary;
- Commission an external compliance review to be conducted by PwC, the terms of reference for which will be agreed with the CPS.
The court judgment* states that the decision to reach a pre-trial resolution was motivated, in particular, by the fact that the company:
- Provided significant cooperation to the investigation and made significant admissions for the investigation; though there was no “self-report” in the case, law enforcement and the court considered that the extent of the voluntary production of material by the company was akin to “self-reporting”;
- There has been a wholesale change of senior management and revision of its culture and strategy. The court highlights that the company has exited approximately 160 international markets, of which approximately 140 were exited where there was no clear path to domestic gambling regulation. Additionally, there has been “a complete overhaul of the company’s compliance procedures”.
Experts believe that the Entain case indicates that, under the corporate proceedings in the UK, the DPAs:
- Are not anymore the prerogative of the SFO and will be more actively used by other authorities also in the framework of proceedings regarding corruption offences;
- Are likely to become even more widespread due to the new corporate corpus delicti associated with the failure of organisations to prevent fraud.
*In spite of the fact that DPAs are pre-trial resolutions, the approval of a court is needed for a DPA to enter into force under the UK law.