Investor publications in the UK have been reporting that GVC Holdings share prices have been impacted by allegations that subsidiary Ladbrokes offered a “hush money” payment to a problem gambler’s employer to avoid the issue being reported to the UK regulator.
The issue surfaced after a report in the Guardian newspaper that alleged that Ladbrokes had agreed to pay the victims of the problem gambler GBP 1 million in return for a pledge to not inform the industry regulator
According to The Guardian report Monday, which claimed sight of a settlement document, Ladbrokes had agreed to pay the victims from whom the problem gambler had stolen the money – clients of a Dubai-based property business – which the problem gambler spent on gambling.
The gambler admitted to having stolen the funds, with Ladbrokes agreeing to pay the money to five of the victims who accused the bookmaker of accepting stolen funds.
The Guardian said it had seen the settlement agreement which had included a demand by Ladbrokes that the victims “agree not to bring any complaint or make any report to any regulator in relation to the claim” in order to receive the money.
The paper also revealed that it had been passed text messages and photos that revealed the company had offered the gambling addict generous incentives, including free tickets to Arsenal games, the company box at the Royal Ascot, and return flights from Dubai.
However, the issue was exposed when the problem gambler reported it to the UK Gambling Commission, breaking the terms of the settlement. An area of particular concern is text messages exchanged between the gambler and an account manager assigned to him, which apparently raise doubts around the company’s compliance with regulations designed to prevent problem gambling and money laundering.
The UK Gambling Commission has confirmed that it is investigating the case to “ascertain the full circumstances” behind the allegations.