Ladbrokes owner GVC faces probe by UK tax authority

21 July 2020

Ladbrokes owner GVC has said it is "stunned" the UK's tax body is broadening a questions into "prospective corporate upseting" associated with its former Turkish online gambling unit.

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

GVC sold its Turkish service in December 2017.

The business said it was co-operating with investigation.

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

It said it was "amazed by the decision to extend the investigation in this method and are dissatisfied by the lack of clarity offered by HMRC regarding the scope of its examination".

"HMRC has not yet offered details of the nature of the historic conduct it is investigating, with the exception of a recommendation 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 a person associated with that business bribes another person to acquire or keep organization, or to acquire or maintain a benefit in the conduct of business.

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 declined to comment.

In July 2019, GVC was forced to reject reports that it was still gaining from its previous Turkish subsidiary, stressing that it no longer had ties with the company.

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

"Furthermore, the board also unconditionally refutes recommendations that the group, or senior management, continue to take advantage of any operations servicing the Turkish market."

Liz Coleman, former HMRC tax inspector and consultant of advisory company Integrated Dispute Resolution, said the investigation could go on for a long time.

"HMRC examinations are typically prolonged and considering the size of GVC it could be going on for several years, although if there's a targeted approach it might be much shorter," she said.

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

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

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

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

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