In January of last year, Entain, a major player in the betting and gaming industry, completed the acquisition of BetCity, a prominent online gambling and sports betting operator in the Netherlands. The deal, which was initially announced in June of the previous year, came with a hefty price tag of $484.2 million and was finalized after a six-month process.
Recently, Entain made headlines again by filing a legal claim against BetCity’s former owner, SEM, as well as members of the Singels family and former executives of the Dutch brand. The company alleged that these individuals failed to disclose critical information regarding two investigations for non-compliance by the KSA, the country’s gambling regulator.
Entain accused BetCity executives of withholding information about breaches related to emailing promotional offers to young adults, resulting in a fine of €400,000, as well as anti-money laundering and counter-terrorism financing violations, which led to a €3 million penalty. The company is seeking damages for breach of warranty and breach of covenant in relation to its purchase of BetCity from SEM.
In November 2022, Entain discovered that BetCity was under investigation by the Dutch gambling regulator, prompting the company to agree that SEM would cover any fines resulting from these probes. Additionally, Entain reserved the right to pursue further claims against BetCity’s former owners due to the breach of warranty.
Entain believes that the discrepancies and violations should have impacted the acquisition price, leading the company to seek monetary compensation for the undisclosed issues. However, specific details regarding the damage claim have yet to be disclosed. The legal proceedings are ongoing, shedding light on the complexities of major acquisitions and the potential legal ramifications that may follow.