Broadly, DPA's are a case disposal method which allows proposed defendants to avoid prosecution in exchange for significant financial penalties, including disgorgement of profits and costs and – in some cases – a period of enhanced scrutiny or 'monitorship'. This is the first known DPA negotiated by the CPS, with the other 11 UK examples all entered into by and agreed with the Serious Fraud Office ("SFO")
The Investigation and Allegations
In November 2019, Her Majesty's Revenue and Customs (HMRC) launched an investigation into the activities of the Turkish-facing business of Entain (then known as GVC Holdings), its third party suppliers, and former employees for alleged bribery offences.1
Entain's regulatory announcement indicates that the alleged bribery offences gave rise to potential corporate criminal liability for an offence of "failure to prevent bribery" under section 7 of the Bribery Act 20102.3 It is a defence to section 7 for a relevant commercial organisation to prove that there were adequate procedures in place to prevent bribery.4 As a DPA requires the defendant to admit the offending behaviour, it would appear that such a defence was not available to Entain.
It is unusual for HMRC to be the investigatory body in a case where bribery appears to be the principal issue, ordinarily investigated by the SFO. However, HMRC's involvement may indicate that the offending may have been discovered – or reported – through HMRC's powers to inspect and investigate companies for potential tax issues, In any event, its collaboration with the CPS serves as a useful illustration of its willingness to proactively engage in respect of corporate criminal issues.
Entain's corporate background
It is notable that, despite Entain (which now owns well known bookmakers Ladbrokes and Coral) selling the Turkish unit of business in 2017, Entain nevertheless remains exposed to criminal liabilities for conduct apparently contained within a specific - and since sold - business unit. At this stage, very little is known about how the offending was discovered and the extent to which the sale of the business features in that discovery and the subsequent investigation, including whether or not there was a self-report by Entain. The current UK (SFO) scheme in respect of self-reporting is detailed under the SFO's Corporate Co-Operation Guidance 2019 – you can read further in this alert, where we consider the application of this guidance to corporate transactions, here.
The Deferred Prosecution Agreement
As noted above, DPAs can be reached between defendants and prosecutors and may allow a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions.
Conditions include substantial financial penalties and Entain's statement confirms that, "the Company has agreed to pay a financial penalty plus disgorgement profits totalling of £585 million, to make a charitable donation of £20 million and to pay a contribution of £10 million to HMRC and the CPS' costs."5 An earlier statement (10 August 2023) also gives an insight into what other behaviours are expected of companies looking to secure a DPA, confirming that "since the investigation first commenced, the Group has undertaken a comprehensive review of anti-bribery policies and procedures and has taken decisive action to significantly strengthen its wider compliance programme and related controls."
What's next for Entain? Watch this space…
Barry Gibson, Chairman for Entain, has indicated that Entain has "changed immeasurably"6 since the matters which are the subject of HMRC's investigation took place, and is committed to achieving "the highest levels of corporate governance across all aspects of our business."7 From this statement, one may reasonably assume that Entain have since implemented adequate procedures to prevent bribery offences across those subsidiaries over which it exercises control.
At a hearing on 24 November 2023, Dame Victoria Sharp of the King's Bench Division provided judicial approval of the DPA.
Entain and the CPS are now required to agree an application for final approval, which the CPS will submit to the Court as soon as is reasonably practicable. It will be open to the Court to decline approval of the DPA. However, if the DPA is approved, the Court will make the declaration in open Court and, in the majority of cases, the prosecutor will be required to publish a copy of the DPA and Court declaration, including the agreed facts which should give some further insight into the relevant conduct and investigations, as well as the adequacy of Entain's anti-bribery procedures at the time.
1 Entain plc, 'GVC Holdings PLC / HM revenue & Customs' (21 July 2020) https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=3794739&lang=en-GB&companycode=lu-gvc&v=newdesign
2Section 7(1) sets out that, if a person associated with a relevant commercial organisation bribes another to obtain business or advantage for the organisation, the organisation itself will be guilty of an offence.
3Entain plc, 'Update on Deferred Prosecution Agreement' (24 November 2023) https://www.entaingroup.com/media/ukhjhbq5/entain-update-on-dpa-24-nov-23.pdf
4The Bribery Act 2010, Section 7(2)
5Entain plc, 'Update on Deferred Prosecution Agreement' (24 November 2023) https://www.entaingroup.com/media/ukhjhbq5/entain-update-on-dpa-24-nov-23.pdf