It follows alleged failures of the company to prevent its employees from engaging in bribery between 2011 and 2017.
In the judgement, Dame Victoria Sharp blasted the operator’s conduct at the time but argued the public interest factors in favour of prosecution were outweighed by those against.
In particular, she highlighted Entain’s “proactive” corporate compliance programme, the historic nature of allegations and the wholesale change in senior management.
“One significant factor in this conclusion is that Entain is, both in form and substance, a different entity to GVC,” said Sharp.
However, the agreement legally commits the operator to a suite of regulatory requirements, most importantly to conduct its gambling operations only in regulated markets, subject to approval from local regulators.
This follows a January commitment from the business to exit all markets it no longer saw a domestic path to regulation.
Entain now has a 12-month deadline to exit the four “regulating markets” it is currently active in if regulation is not achieved.
The operator can request an additional 12-month extension in these markets; Brazil, Chile, Peru, Mexico; if it believes there are “reasonable grounds” that regulation will be introduced shortly.
What are the implications for the wider industry?
Chief Crown Prosecutor Andrew Penhale warned that the consequences of the agreement might extend to the entire UK-based gaming sector.
“The wider gaming industry may wish to reflect on the implications of this agreement for their own corporate compliance procedures and, where appropriate, take action to address and report any failings they identify,” he said.
“The S will continue to work closely with law enforcement partners in this area, such as HMRC, as well as the industry regulator, the Gambling Commission”.It is important to note that other large London-listed gambling operators have significant grey market liability including Flutter and 888 Holdings.
The S also highlighted that operators activities within the EU are covered by the free movement of services covered under the Treaty for the Functioning of the European Union.
Gaming consultants Regulus Partners argued the DPA demonstrated the legal status of grey markets is more ambiguous than ever.
“Other businesses might be tempted to assume that GVC was especially dodgy, that its previous senior or middle management was particularly malfeasant (and good at hiding it from eagle-eyed boards), or that Turkey represents an especially dangerous local risk,” it said.
“However, the S’s call-out of all .com markets should temper the temptation to downplay or ringfence the significance of Entain’s DPA on the wider online industry.
“The DPA demonstrates and accelerates a significantly changing world: .com risk has become a lot more serious for groups and senior directors of businesses which do not operate entirely in Point of Consumption markets in entirely compliant ways.”
Who else could end up in the dock?
The agreement with prosecutors only covers the business itself and not any current or former directors and employees.
Whether the S also intends to prosecute former of GVC Holdings senior management, such as ex-CEO Kenny Alexander, is unknown at this point.
However, when Alexander was floated the possible new CEO of 888 earlier this year, the Gambling Commission put the operator’s licence under review due to his connection with the HMRC probe.
The business is also required to continue to review and “where necessary” enhance its compliance procedures, as well as engage PwC to conduct an external compliance review.
“Entain’s DPA demonstrates just how dangerous ‘getting caught’ for dubious operational practices is at a corporate level,” said Regulus.
“The period where a legal confirmation that local gambling laws are archaic or patchily enforced was enough for boards to assume they had a compliant business is firmly over, in our view.”
