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 expanding an inquiry into "potential corporate offending" connected to its previous Turkish online gambling system.

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

GVC sold its Turkish service in December 2017.

The company stated it was co-operating with examination.

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

It said it was "shocked by the decision to extend the examination in this way and are dissatisfied by the absence of clarity offered by HMRC as to the scope of its examination".

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

Section 7 states that an industrial organisation is guilty of an offence if a person related to that company bribes another person to acquire or maintain organization, or to obtain or maintain a benefit in the conduct of service.

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 examination.

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 business.

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

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

Liz Coleman, previous HMRC tax inspector and specialist of advisory firm Integrated Dispute Resolution, stated the examination might go on for some time.

"HMRC investigations are typically prolonged and thinking about the size of GVC it could be going on for several years, although if there's a targeted approach it might be shorter," she stated.

"They need to analyse all the computer records too, so this might include even more time."

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

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

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

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