Coral and Ladbrokes owner Entain has set aside £585m to cover potential fines relating to a probe by HMRC into alleged bribery at its former Turkish business.
Entain said it has made the provision as it continues negotiations with the Crown Prosecution Service (CPS) following a four-year investigation.
The company had previously warned it might face a “substantial financial penalty” because of conduct at its former subsidiary in Turkey.
Authorities started investigating the firm’s suppliers in 2019, and a year later started to look at the GVC Group, which subsequently rebranded as Entain.
Entain sold the Turkish subsidiary in 2017 before the investigation started.
Chairman Barry Gibson said: “We are pleased to be making good progress towards drawing a line under this historical issue, which relates to a business that was sold by a former management team of the group nearly six years ago.
“We have been working closely with the CPS throughout this process, and they have recognised our extensive co-operation.
“Following a complete overhaul of our business model, strategy and culture in the last few years, the Entain of today bears no resemblance to the GVC of yesterday.”
Details of the HMRC investigation first emerged in 2020, days after the sudden departure of boss Kenny Alexander.
The gambling tycoon, known as “King Kenny” was last month effectively blocked by regulators from carrying out a boardroom takeover of 888, the owner of William Hill, over his links to the bribery scandal at Entain.
Mr Alexander and his associates were making an audacious comeback bid by seeking top positions at 888.
They built a stake in the London-listed bookmaker and opened talks with its executive chairman, the former New Labour spin doctor Lord Mendelsohn.
But in an unscheduled update to the stock market, 888 announced it had terminated discussions following a warning from the Gambling Commission.
Regulators indicated that appointing Mr Alexander and his allies put its licences in jeopardy, owing to their links to a long-running bribery scandal at Entain.
HMRC officials had ordered the firm to hand over details about its Turkish arm in November 2019
It sold the operation in December 2017 before a £4bn merger with Ladbrokes Coral.
The company did not publicly reveal the request from HMRC until July 2020, when almost £374m was wiped off the value of the FTSE 100 firm.
Its shares have increased in value by 48pc since but were down almost 3pc in the early hours of Thursday’s trading.
In an update to shareholders, the company said: “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.”
Entain revealed it increased earnings before taxes and other charges by 6pc to £499m in the first half of this year, compared to the same period in 2022.
However, the group lost £448.1m before tax after setting aside the money for the potential HMRC penalty.