In a noteworthy financial move demonstrating confidence in enterprise resilience and projected growth, Barry Gibson, Chair of global sports betting and gaming group Entain, has added 9,000 shares to his portfolio in the company. This acquisition took place on 6 December, less than a month since Gibson and CEO Jette Nygaard-Andersen both augmented their stakes in the firm. The previous share increase saw Gibson take on 93,664 shares, tallying up to a total of 123,500, while Nygaard-Andersen purchased 35,000 shares, swelling her total to 65,381.
These recent purchase decisions by Entain’s senior executives arrive just days after a significant legal resolution. Entain had reached a final Deferred Prosecution Agreement (DPA) with the UK’s Crown Prosecution Service (CPS) concerning charges rooted in past transactions in Turkey. As defined by the DPA, disclosed on November 24, the gaming corporation is obligated to pay both a fine and the surrender of profits amounting to £585.5 million in total. Further to this, Entain will contribute a £20 million donation to charitable causes and cover associated costs of £10 million towards HMRC and CPS.
In an address following the consensus on the DPA, Gibson articulated optimistic sentiments regarding Entain’s future trajectory. “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,” he remarked, indicating a palpable sense of closure for the company. Gibson also recognized Entain’s substantial cooperation with legal entities at every stage, which reportedly did not go unnoticed by court authorities.
The agreement on the DPA marks an end to a rigorous inquiry by His Majesty’s Revenue and Customs (HMRC) into earlier dealings by Headlong Limited, the Turkey-facing business unit that Entain, formerly recognized as GVC Holdings, offloaded in 2017. HMRC’s investigation, instigated with a production order in November 2019, sought in-depth information regarding the company’s online betting and gaming operations. The investigatory lens specifically zeroed in on potential contraventions of Section 7 of the Bribery Act of 2010.
Previously, Entain had refuted allegations of reaping ongoing benefits from Headlong Limited in 2019. Official acknowledgment of the HMRC’s inquiry into “potential corporate offending” came forward from Entain in 2020. As the year 2021 unfolded, Entain anticipated a “substantial” penalty related to the investigation and consequently earmarked a £585 million provision pending the approval of the DPA.
The road to the DPA has not been devoid of fluctuations for Entain. Remarkably, despite registering a net gaming revenue uptick of 7% for the third quarter, and witnessing a 9% surge in revenue, the company experienced a downgrade from “buy” to “sell” as per the analyzation by financial services colossus, Goldman Sachs, in November. This was mostly attributed to Entain’s growth performance in recent months.
Additionally, Entain has been active on the mergers and acquisitions front as it awaits the DPA settlement confirmation. Notably, it completed the acquisition of a digital gambling outfit, Angstrom Sports, at a valuation of £203.0 million. Moreover, the company’s Central and Eastern Europe (CEE) segment, Entain CEE, procured Polish bookmaker STS Holding for £750 million, a deal that garnered an astounding 99.3% approval from STS investors and concluded in August.
However, Entain’s journey has also included its fair share of challenges. In August of the same year, more than 50 job positions were cut from its Australian division, indicating a business strategy recalibration. Complexities also emerged within its esports venture Unikrn, leading to a strategic scaling back of its B2C operations.
In summary, while Entain faces the aftermath of legal confrontations and market readjustments, its leaders have shown not just a stoic front but also a significant financial commitment, suggesting a robust confidence in the long-term prosperity and governance of the enterprise.
