Ladbrokes owner GVC faces probe by UK tax authority

21 July 2020

Ladbrokes owner GVC has stated it is "shocked" the UK's tax body is widening an inquiry into "potential corporate upseting" associated with its previous Turkish online gambling system.

It said HM Revenue & Customs had actually broadened its probe into suppliers GVC utilized in Turkey to consist of other entities within its group.

GVC sold its Turkish organization in December 2017.

The business stated it was co-operating with examination.

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GVC were informed of the development on Monday, however said it had yet to be notified of which of its subsidiaries were being examined.

It said it was "amazed by the choice to extend the examination in this method and are disappointed by the absence of clearness offered by HMRC as to the scope of its investigation".

"HMRC has actually not yet offered details of the nature of the historic conduct it is examining, with the exception of a referral to section 7 Bribery Act 2010, nor has it clarified which part of the GVC group is under examination."

Section 7 states that a business organisation is guilty of an offense if an individual connected with that business kickbacks another individual to acquire or maintain company, or to acquire or retain a benefit in the conduct of service.

GVC's share cost was down 10.6% to 778.2 p on Tuesday following the news.

The UK Gambling Commission told the BBC that it was "assisting" with the investigation.

HMRC declined to comment.

In July 2019, GVC was required to reject reports that it was still taking advantage of its previous Turkish subsidiary, stressing that it no longer had ties with business.

"The board re-iterates the truth that subsequent to the disposal of the group's Turkish-facing business, GVC has no activity either directly or indirectly linked to the Turkish market," GVC stated.

"Furthermore, the board likewise categorically refutes ideas that the group, or senior management, continue to take advantage of any operations servicing the Turkish market."

Liz Coleman, previous HMRC tax inspector and expert of advisory firm Integrated Dispute Resolution, said the examination could go on for a long time.

"HMRC examinations are usually lengthy and thinking about the size of GVC it might be going on for several years, although if there's a targeted method it could be much shorter," she said.

"They have to evaluate all the computer records too, so this could include even more time."

The HMRC's choice comes simply a week after Kenneth Alexander revealed that he was stepping down as GVC's president.

Mr Alexander took control of in 2007 and oversaw the business's acquisitions of competitors Ladbrokes Coral and Bwin.party.

GVC reported a 22% drop in total net profits for the second quarter this year due to the impact of the Covid-19 pandemic.

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