In January of last year, Entain, a major player in the betting and gaming industry, completed the acquisition of BetCity, an online gambling and sports betting operator in the Netherlands, from Sports Entertainment Media (SEM). The price of the acquisition was a staggering $484.2 million and had been announced in June of the previous year.
However, Entain has now taken legal action against SEM, members of the Singels family, and former executives of BetCity. The company claims that the defendants failed to disclose important information regarding two investigations into BetCity by the Netherlands’ gambling regulator, the KSA.
Entain alleges that BetCity executives were aware of breaches but did not disclose them in official documents. The KSA’s first probe was related to BetCity emailing promotional offers to young adults, resulting in a fine of €400,000. The second investigation was related to anti-money laundering and counter terrorism financing violations, resulting in a fine of €3 million.
In response to discovering BetCity’s under investigation, Entain agreed that SEM would cover any fines due to the probes. The company also reserved the right to file further claims against BetCity’s former owners due to breach of warranty. Entain believes that these discrepancies should have impacted the price of the acquisition and is seeking monetary compensation.
The specific details of Entain’s damage claim have not been released. The lawsuit is ongoing, and more information is expected to come to light as the legal proceedings continue.