A group of institutional investors has filed suit in the United Kingdom against prominent gambling firm Entain, the parent company of numerous well-known gaming brands including partypoker. The lawsuit seeks £177M in damages as compensation for the ongoing slide in Entain's share price following its May 2023 settlement with the UK’s Crown Prosecution Service over bribery offenses last decade connected to its operations in Turkey.
Entain paid a £585M fine as part of a preferred prosecution agreement to resolve the matter. The illicit activity took place from 2011 to 2017, when the company was known as GVC Holdings. Entain also assured prosecutors that the individuals involved were no longer with the company, and the entire subsidiary wherein the bribery took place, Headlong Limited, has been sold off.
Nonetheless, the company's value took an immediate hit when the settlement was announced and approved, and rather than rebounding or leveling off, its share price has continued to slide. As tracked by the Financial Times, Entain shares have dropped 44% in value over the last year.
Fox Williams launches class action
In June, London financial-services legal firm Fox Williams published a call to action to institutional investors who believed that they had been damaged by Entain's (GVC's) earlier actions. The call to action promised to have the case ready by autumn of 2024, and it has beaten that deadline by a handful of weeks.
Fox Williams filed against Entain on allegations of bribery and corruption, and non-disclosure, which in turn presented a rosier view of the company's operations than actually existed. To date, Fox Williams has enrolled 20 institutional Entain investors as plaintiffs, with the expectation that more will follow.
Though the initial sag in Entain's share price can be closely linked to the announcement of the settlement with the CPS, it remains to be seen how much of the later slide can be linked back to the scandal. Last December, amid widespread shareholder disapproval, CEO Jette Nygaard-Anderson resigned after three years at the company's helm.
Entain has not commented publicly on the shareholder lawsuit, but it has disclosed that it has retained London's Slaughter and May legal firm to "robustly" defend the company's interests.
