Entain Faces €104M Counterclaim from BetCity’s Former Owners

Entain’s acquisition of BetCity, a prominent online betting and iGaming brand in the Netherlands, has taken a contentious turn, with legal disputes surfacing over alleged breaches and withheld information.

Several years ago, Entain announced its ambitious plans to acquire BetCity, signaling a strategic move to bolster its foothold in the lucrative Dutch market. However, the euphoria surrounding the acquisition dimmed when Entain launched a lawsuit earlier this year, alleging undisclosed breaches by BetCity’s former owners.

Regulatory Breaches and Legal Ramifications

The Dutch gaming authority deemed BetCity to be in breach of anti-money laundering laws and regulations pertaining to gambling promotion, which resulted in the company being hit with heavy fines. Entain is requesting significant damages, alleging hidden information and regulatory violations, notwithstanding the fines paid by BetCity’s previous owners.

A counterclaim has been filed by BetCity’s former owners, who include members of the Singles family, in response to Entain’s complaint. The previous owners want €103.9 million in compensation, rejecting Entain’s claims of non-disclosure. Before completing the deal, they contend that Entain was properly notified of the regulatory investigations.

The core of the conflict is related to operational changes made after purchase and breakdowns in communication. The former owners of BetCity argue that the acquisition conditions were not altered even after they informed Entain about the regulatory investigations through several means. Furthermore, they blame reduced profitability on Entain’s post-acquisition operational adjustments.

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Both Entain and BetCity’s erstwhile owners are preparing for drawn-out legal fights as the legal drama plays out. The resolution of this issue will have a big impact on iGaming sector acquisitions going forward and will highlight how crucial due diligence and openness are to these kinds of deals.

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