Entain, a behemoth in the gaming industry, finalized the acquisition of BetCity for a handsome sum of €450 million in January 2023. This move strategically positioned Entain within the Netherlands’ gaming market, capitalizing on BetCity’s status as one of the first ten licensees. For more information, visit https://danske-casino.com/.
Over a year into their combined operations, Entain has unveiled allegations that triggered a legal pursuit for damages against BetCity.
An exposé by CasinoNieuws.nl revealed a filing by Entain that highlighted their unawareness of two regulatory cases pending against BetCity at the time of acquisition. These were under the scrutiny of the Dutch regulator, Kansspelautoriteit (KSA).
Entain has stated that BetCity’s previous owners had provided affirmations negating any knowledge of regulatory inquiries. Nonetheless, the court documents suggest that several BetCity insiders were privy to these investigations but chose to withhold such critical information.
The ramifications of these regulatory cases resulted in BetCity incurring fines from the KSA. Despite the fines being settled by BetCity’s former proprietors, Entain argues that these developments should have been factored into a reduced valuation of the company, thus warranting compensation.
The Beginnings of BetCity’s Legal Woes
Entain’s decision to acquire BetCity in June 2022 was made under the assumption of a clean regulatory slate. However, as per the claims, KSA had already notified BetCity of an investigation in April of the same year. This probe related to the sending of promotional materials to young adults, an act contravening Dutch regulations, which led to a substantial €400,000 penalty.
A subsequent inquiry commenced in May 2022, again with BetCity being alerted by KSA. This particular investigation focused on deficiencies in protocols meant to prevent money laundering and the financing of terrorism. For these oversights, BetCity faced a hefty fine of €3 million.
Entain asserts that they were kept in the dark about these incidents until they surfaced on the KSA website in November 2022. In response, Entain sought discussions with BetCity regarding restitution.
While it was established that the original owners of BetCity would absorb the cost of the fines, Entain reserved the possibility of introducing a supplementary claim, a course of action they later confirmed their intention to pursue.
The formal claim was not initiated by Entain until the previous month, a detail that only came to public attention this month when CasinoNieuwsbet disclosed the filing on its platform just last week.
The specific amount of damages sought by Entain remains undisclosed, and the company has refrained from issuing any statements on the matter. You can also check out the review on BetCity, it’s always good to honour a few versions.
Entain Faces Additional Challenges
The legal strife with BetCity emerges amid a tumultuous phase for Entain. Jette Nygaard-Andersen recently stepped down from her role as CEO, and the search for a permanent successor is ongoing. In the interim, Stella David, a non-executive director, has taken the helm.
Entain had just settled a protracted legal dispute with the Crown Prosecution Service (CPS) concerning past activities in Turkey, shortly before Nygaard-Andersen’s departure.
December brought the conclusion of a deferred prosecution agreement with the CPS, mandating Entain to disburse substantial financial penalties and profit disgorgements totaling £585.5 million. Additionally, Entain committed to a £20 million charitable donation and a £10 million contribution to cover HMRC and CPS expenses.
Payments will be staggered over a four-year span, commencing post-final court approval.
Entain has also faced downgrades from Goldman Sachs, shifting from a buy to a sell rating in November, amidst concerns over growth, especially in its online sector.
Moreover, Entain’s joint venture with MGM Resorts International, BetMGM, has ventured into the UK market—without Entain’s involvement. MGM has forged a partnership with LeoVegas, leveraging its technology and platform for international reach.
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In another strategic shift, reports indicate Entain plans to withdraw from over 140 unregulated markets worldwide, including remote and sparsely populated areas such as Antarctica and Vatican City. Other territories marked for exit, with human populations under 1,000, include the Pitcairn Islands, French Southern and Antarctic Lands, and United States Minor Outlying Islands.