Ladbrokes owner GVC deals with probe by UK tax authority

21 July 2020

Ladbrokes owner GVC has stated it is "surprised" the UK's tax body is expanding a questions into "prospective corporate angering" related to its former Turkish online gaming system.

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

GVC offered its Turkish business in December 2017.

The company stated it was co-operating with investigation.

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

It stated it was "amazed by the choice to extend the investigation in this method and are dissatisfied by the absence of clarity supplied by HMRC as to the scope of its examination".

"HMRC has actually not yet provided information of the nature of the historical 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 an industrial organisation is guilty of an offence if an individual associated with that business allurements another individual to obtain or keep business, or to get or retain a benefit in the conduct of organization.

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

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

HMRC decreased to comment.

In July 2019, GVC was required to deny reports that it was still taking advantage of its former Turkish subsidiary, worrying that it no longer had ties with the service.

"The board re-iterates the yohaig code fact that subsequent to the yohaig code disposal of the group's Turkish-facing business, GVC has no activity either directly or indirectly connected to the Turkish market," GVC said.

"Furthermore, the board also categorically refutes suggestions that the group, or senior management, continue to gain from any operations servicing the Turkish market."

Liz Coleman, previous HMRC tax inspector and expert of advisory firm Integrated Dispute Resolution, stated the investigation could go on for some time.

"HMRC investigations are generally prolonged and considering the size of GVC it could be going on for many years, although if there's a targeted technique it might be shorter," she stated.

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

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

Mr Alexander took over in 2007 and manage the business's acquisitions of rivals Ladbrokes Coral and Bwin.party.

GVC reported a 22% drop in overall net revenues for the 2nd quarter this year due to the impact of the Covid-19 pandemic.

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