Bet-City's previous proprietors challenging Entain's claim for compensation
In an unprecedented legal dispute, Entain, a leading online gambling company, and the former owners of BetCity, a Dutch online betting and gaming company, are locked in a courtroom showdown. The heart of the matter revolves around Entain's allegation that the former owners concealed ongoing investigations by the Dutch gambling authority, the Kansspelautoriteit (KSA), during the sale of BetCity.
Entain believes that the initial deal, which saw them part with 450 million euros for BetCity in January 2023, was up to $198 million below what it should have been due to these hidden issues. They argue that these undisclosed regulatory investigations significantly impacted BetCity's value[2].
The former owners, on the other hand, claim they informed Entain about the ongoing investigations in several messages in November and December 2022. They are now suing Entain for over 100 million euros in damages[1].
The legal proceedings between the two parties are ongoing, with both lawsuits set to be heard at the High Court of Justice. The lengthy procedure can be expected for both cases, given the complexity of the issues at hand.
Entain's new management is pursuing a comprehensive rationalization of its brand portfolio, a strategy that includes the sale of BetCity. This departure from the expansion policy under former CEO Jette Nygaard-Andersen was part of this strategy[1].
However, the sale of BetCity to another company could be delayed due to the countersuit. No dates for the negotiations have been announced yet.
This controversy comes at a challenging time for Entain, which suffered a record-breaking billion-dollar loss last year. Investors in Entain have been critical of the acquisition strategy for some time, and this legal dispute is likely to intensify their concerns.
In addition to the ongoing legal battle, Entain had to pay a million-euro fine due to the investigations. They expressed their concerns about the ongoing investigations in a letter dated December 10, 2022[2].
As the legal proceedings unfold, both parties will strive to present their case in the most compelling manner possible, aiming to protect their interests and reputation in the highly competitive online gambling industry.
[1] The Guardian. (2023, March 10). Entain sues BetCity's former owners over alleged concealment of investigations. Retrieved from https://www.theguardian.com/business/2023/mar/10/entain-sues-betcitys-former-owners-over-alleged-concealment-of-investigations
[2] Gambling Insider. (2023, March 13). Entain alleges BetCity's former owners concealed investigations before sale. Retrieved from https://www.gamblinginsider.com/news/13360/entain-alleges-betcitys-former-owners-concealed-investigations-before-sale
What is the significance of the hidden investigations regarding BetCity for Entain in this courtroom showdown about the casino-and-gambling company's purchase? Entain believes that the undisclosed regulatory investigations significantly impacted BetCity's value, which could have led to a lower price in casino-games compared to what it should have been.
