January of last year marked a significant milestone in the gaming industry when Entain, a frontrunner in betting and gaming, successfully completed the acquisition of a key online gambling and sports betting entity in the Netherlands, known as BetCity (traded under Betent). The purchase from Sports Entertainment Media (SEM) came with a staggering price tag of $484.2 million. This development, initially made public in June 2022, required six months to complete.
Entain recently initiated a legal action against SEM, members of the Singels family and previous executives of the Dutch brand, as divulged in paperwork released by CasinoNieuws. The crux of the company’s claim revolves around the allegation that the defendants intentionally concealed data linked to two investigational probes by the country’s gambling regulator, the KSA, into BetCity’s non-compliance.
The infractions in question date back to the year 2022, with Entain leveling accusations at BetCity’s leadership, for being aware of the violations, and subsequently, withholding them from official documents. An investigation carried out by the KSA pertains to breaches regarding promotional offers emailed to younger adults, leading to a penalty of €400,000 ($433,000) inflicted on the operator.
Simultaneously, another investigational approach was concerned with money laundering and counter terrorism financing contraventions. This investigation initiated by the KSA in May 2022 ultimately led to BetCity bearing another penalty of a much steeper amount, fined €3 million ($3.2 million).
Company Seeks Recompense for Breach of Warranty
In the first part of this month, reports from CasinoNieuws revealed that Entain had filed a lawsuit against BetCity’s former proprietors. However, back then, the details were rather scanty, leaving the motives behind the lawsuit unclear. The newly disclosed document provides considerable insights into the lawsuit’s agenda.
“The Plaintiff seeks recompense for warranty violation and covenant breach concerned with its procurement of Betent from SEM,”
Entain’s legal claim stipulates
In November 2022, Entain unveiled that BetCity was under scrutiny by the Dutch gambling authority. In light of this revelation, it was decided that SEM would take responsibility for any applicable fines arising from the KSA’s probes. Furthermore, Entain retained the option to file additional claims against the prior owners of BetCity due to the breach of warranty.
Entain asserts that such discrepancies ought to have affected the acquisition cost. In pursuit of this, the company is seeking financial reparation. However, explicit particulars regarding the claim for damages are yet to be revealed.
