Entain Fine on Bribery Charges Includes Demand to Exit Latin America
Posted on: December 11, 2023, 07:58h.
Last updated on: December 11, 2023, 12:21h.
Global gaming giant Entain is grappling with a $730-million fine linked to bribery allegations from its past operations in Turkey. The UK’s Crown Prosecution Service (CPS) is now adding a new condition — Entain must exit from the Latin American market.
Entain, the company behind popular gaming brands like Ladbrokes and PartyPoker, has previously expressed its intention to withdraw from markets lacking regulatory frameworks. However, it has continued its operations in certain jurisdictions.
The CPS has now mandated that the company depart from Brazil, Chile, Mexico, and Peru within a year. Failure to comply will result in the enforcement of the prosecution order.
The CPS is willing to show flexibility if Entain can convincingly demonstrate that the target country is on the verge of establishing a regulated market. Entain must meet this requirement within one year from the date of the court order, December 5.
When the ruling was issued, Entain chair Barry Gibson said that the company had “fundamentally and profoundly changed” without further details.
The company hasn’t provided feedback on its next steps. However, Entain, experiencing an investor revolt, isn’t likely to withdraw immediately.
The news is already affecting the company’s stock, however. It was $19.18 at the end of January. As of today’s date, the stock is $10.03.
Entain currently operates several brands in Latin America, including Sportingbet and Betboo. Neither has performed as well as the company had hoped, but they still provide significant financial support to Entain’s bottom line.
Latin American Gaming Market
Four countries in Latin America are attempting to create regulated gaming frameworks.
In Brazil, the provisional measure allowing temporary sports betting operations just expired. After a lengthy legislative process, sports and igaming may finally be officially legalized. The Chamber recently approved bill 3626/23 of Deputies. The final text of the legislation is pending approval. If the bill is passed in the Senate, sports betting and online casino games will be directly licensed for the first time.
This legislation has faced significant delays over the past five years.
Chile is also making progress in online licensing, but debates persist over the bill’s content. The current proposal includes a one-year cooling-off period for operators, adding complexity to the legislative landscape. That period would mean that any operator currently active would have to wait a year from the date of legalization to reenter the market.
Mexico presents a more challenging scenario. The existing legal framework permits licensed operators to collaborate with third parties to offer online gambling through their licenses. Entain, through its Bwin brand, has partnered with a local casino.
However, a recent presidential decree seems to prohibit this practice, meaning the government can no longer issue new licenses, and existing permits won’t be eligible for renewal upon expiration.
In Peru, a regulatory decree has been enacted to allow online gambling operators to obtain licenses, with the issuance expected to commence next year. Despite this positive development, the regulatory timeline remains uncertain, potentially necessitating Entain’s exit from the market in the interim.
Related News Articles
January 24, 2024 — 12 Comments—
January 29, 2024 — 11 Comments—
January 24, 2024 — 6 Comments—
January 16, 2024 — 5 Comments—
February 2, 2024 — 5 Comments—