Why Gambling Companies Should Return Covid Relief Funds

A section of the media feels that gambling companies should return COVID-19 relief funds because of high profits after tax. William Hill has already done so, and the press wants Entain, the owner of Ladbrokes, to follow in its footsteps.

Whilst there are many companies that have "stolen" COVID relief funds just because they could, there are even more online gambling companies that have done the same. There are quite a few listed US gambling firms which have no problem offering no deposit bonuses and very little chance of winning anything that also claimed and received hundreds of millions in relief funds. One such company is Entain.

Entain May Return Furlough Money

Entain CEO Jette Nygaard-Andersen said that Entain may return the Covid-19 relief payment of £102 million it received from the UK government. Her statement was in response to a critical press report about the company’s alleged misuse of taxpayer funds. She also stated that the company might not return the money.

Recently, the Guardian reported that the UK gambling company had claimed £57.5 million in 2020 and £44 million in 2021 although it generated revenue of £3.6 billion in 2020 and made a profit of £114 million after taxes.

The company claimed to have used the relief funds to pay the 14,000 people working in its Ladbrokes Coral betting shops their full salary. But this was when the betting shops had to be shut down because of the Coronavirus pandemic.

Rival William Hill Returns Support

While Entain faces flak for claiming relief money despite making a profit through its online betting services, rival William Hill has paid back the support funds saying that it has generated revenue because of online betting.

Although Entain claimed Covid-19 relief funds to pay its employees, the full-year financial reports it published last month indicated that it’s online revenue increased by £500 million in 2020. The company ended the year by reporting revenues of £3.6 billion and recording a £113.8 million net profit.

The company’s share value at the end of 2020 increased by over 40%, and it made profits in the newly regulated and fast-growing US market.

While it claimed furlough money, Entain spent money on political campaigns. In January 2021, the same month it received relief funds, Entain hired a political consultancy firm called CT Group, belonging to Lynton Crosby, a former adviser for Theresa May and Boris Johnson. Entain used the company’s services to launch Players Panel, a consumer group representing the voice of the average gambler.

While Entain continues to cling to furlough money, rival William Hill decided in August 2021 to return the funds it had claimed because it had opened its betting shops and made a strong recovery. Bookmakers had to shut down their betting shops again because of the lockdown, but William Hill did not reverse its decision. Also, it continued paying its employees their full salary.

Many other companies, including Redrow, Ikea, Serco, and others that reported financial progress during the pandemic returned the relief funds.

Entain is one of the many gambling companies that claimed relief funds although they made profits through online gambling services. Labour MP Carolyn Harris criticized these companies for claiming taxpayer funds despite making huge profits.

Entain Reviews the Situation

Covid-19 lockdowns harmed the sports betting industry because global sports events were cancelled all over the world. But the Guardian observes that Entain’s online casinos made massive profits during the lockdown, as a result of which the company’s revenues remained as they were during the pre-pandemic days.

Andersen says that Entain may return relief funds in the following months. At the same time, she says that the company may not do so because the pandemic was not over. The board of directors is reviewing the situation, and it is too early to say if Entain can return the funds.

Entain is trying to prove that the gambling industry can help players gamble safely. For example, the company is the leader of the self-imposed ban on advertising televised sports.

Nygaard-Andersen told the press that she wants the upcoming reforms in gambling laws to have a healthy balance. She cautions that extreme measures may drive residents into the unregulated gambling market.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes