Ladbrokes owner GVC deals with probe by UK tax authority

21 July 2020

Ladbrokes owner GVC has said it is "stunned" the UK's tax body is widening an inquiry into "prospective business angering" related to its previous Turkish online gaming system.

It said HM Revenue & Customs had expanded its probe into providers GVC used in Turkey to include other entities within its group.

GVC offered its Turkish company in December 2017.

The business stated it was co-operating with examination.

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GVC were notified 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 choice to extend the examination in this method and are disappointed by the lack of clearness supplied by HMRC as to the scope of its investigation".

"HMRC has not yet offered information of the nature of the historical 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 offence if a person related to that business kickbacks another individual to get or keep organization, or to get or keep a benefit in the conduct of organization.

GVC's share rate 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 required to reject reports that it was still gaining from its former Turkish subsidiary, worrying 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 straight or indirectly connected to the Turkish market," GVC said.

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

Liz Coleman, former HMRC tax inspector and specialist of advisory company Integrated Dispute Resolution, stated the examination could go on for a long time.

"HMRC investigations are normally prolonged and considering the yohaig code size of GVC it could be going on for several years, although if there's a targeted method it could be much shorter," she said.

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

The HMRC's choice 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 company's acquisitions of competitors Ladbrokes Coral and Bwin.party.

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

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