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On 5 December 2023, global online sports betting business Entain plc (Entain) formally entered into the UK’s thirteenth DPA. The DPA was approved by Dame Victoria Sharp DBE of the Royal Courts of Justice sitting at Southwark Crown Court.
The decision is a timely reminder to clients that there are a number of investigative and prosecuting authorities that collaborate together when investigating financial crime. Moreover, it is not, and never was, solely the realm of the SFO.
The case was heard in private due to ongoing related criminal proceedings against individuals and so the details are relatively high-level. However, what we know is that Entain’s conduct covers offending stretching a period of just under seven years.
The court formed the view that the DPA was in the interests of justice and that the terms were just, reasonable and proportionate. Eclipsed only by the Aribus DPA in 2020, Entain will have to pay £585 million, comprising (i) a £465 million financial penalty; and (ii) £120 million disgorgement of profits. The business, which also owns the Coral and Ladbrokes brands, will donate £20 million to charity and pay £10 million to cover the CPS’ and HMRC’s prosecution costs. Payment will be made over the course of four years.
Entain must also (i) conduct its gambling operations only in regulated markets; (ii) continue to review and, where necessary, enhance its compliance procedures; and (iii) engage with PwC to conduct an external compliance review, with terms of reference to be agreed with the CPS.
When considering the terms of the DPA, the court picked up on the fact that a prosecution would be a disproportionate response to the offending, particularly given that Entain is now a different entity to its predecessor (GVC Holdings plc).
Although there was no self-report by the business, the court noted that there was “significant” cooperation with the investigation, which was followed up by voluntary production of material to the CPS. The court viewed this as being “akin to self-reporting”.
The court also took into account the potentially disastrous effect that a prosecution would have on employees among Entain’s global workforce. Shareholders, pension fund holders and supply chain holders would also be significantly impacted by any prosecution of the business.
So what’s new about this DPA?
The immediate point that will strike practitioners, and those generally interested in this field, is that this is the first DPA entered into with the CPS – all the previous DPAs having been entered with the SFO. This may signal a maturity about the manner in which the CPS will consider and resolve financial crime allegations where a corporate is the offending party, rather than it proceeding with the tried and tested method of charge, prosecute and hedge its bets with the court system (see R v Skansen [unreported]).
In developing the above argument, the information released to the public suggests that the CPS undertook a proper and rigorous review of the DPA Code, the Joint Prosecution Guidance and the UK’s commitment to abide by the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, when arriving at its decision to enter into the DPA following negotiations with Entain. This may, indirectly, ease some pressure from the SFO, which may view the CPS’ novel approach as the target shifting from its back.
The investigation was also not lead by the police. Instead, it was rolled out by HMRC, which, in 2019, applied for and was granted a production order compelling Entain’s Turkish subsidiary to produce information/material relevant to its enquiries. Although the HMRC’s statutory power to prosecute was removed in 2010, when the Revenue and Customs Prosecutions Office merged with the CPS, it retains its investigative powers, which includes making arrests.
Clients should therefore be wary that notwithstanding the time it takes for an SFO investigation/prosecution to kick into life, access to the UK’s anti-financial crime armoury is also open to other law enforcement bodies.
Iskander Fernandez's comments were featured in City AM.
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