Entain’s acquisition of BetCity for €450 million in January 2023, initially seen as a strategic expansion into the Dutch gaming market, is up for a twist. The gaming giant is now seeking compensation from BetCity, alleging that the Dutch brand failed to disclose ongoing regulatory investigations during the acquisition process.
The heart of the dispute lies in two investigations by the Dutch regulator, Kansspelautoriteit (KSA), which began in April and May of 2022. These investigations were focused on BetCity’s breaches of regulations, including targeting young adults with promotional emails and failures in anti-money laundering measures, resulting in fines of €400,000 and €3 million, respectively.
Entain argues that the value of BetCity was misrepresented due to these undisclosed issues. According to leaked documents, several BetCity personnel were aware of the investigations but did not declare this information. Entain claims it was unaware of these cases when it agreed to acquire BetCity in June 2022 and only learned about them through KSA website publications in November 2022.
Following this discovery, discussions between Entain and BetCity were initiated regarding compensation. While the fines were paid by BetCity’s former owners, Entain is now seeking additional financial damages, contending that they would have assessed BetCity’s value differently had they known about the regulatory problems.
The legal claim filed by Entain against BetCity was not public knowledge until a local casino news website recently published the relevant documents. The specifics of the damages Entain is seeking remain undisclosed as of now.
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