Entain, a gaming giant, is seeking compensation from BetCity after claiming that the company did not disclose crucial information about two ongoing regulatory investigations at the time of its acquisition of the Dutch brand. In January 2023, Entain acquired BetCity for €450m, giving the company access to the Dutch market as one of the initial 10 licensees. However, claims have surfaced that have prompted Entain to file a claim for damages against BetCity.
According to a document obtained by CasinoNieuws.nl, Entain alleges that it was unaware of two regulatory cases against BetCity when it acquired the business. The investigations were being carried out by the Dutch regulatory Kansspelautoriteit (KSA). The filing claims that the former owners of BetCity signed documents stating that they were not aware of any ongoing regulatory investigations, despite several personnel at BetCity knowing of these investigations and failing to declare this information.
The two investigations resulted in fines for BetCity, one in April 2022 for sending promotional emails to young adults, and another in May 2022 for shortcomings in anti-money laundering and terrorist financing measures. Entain claims that it only discovered these cases when news items were published on the KSA website in November 2022, and subsequently sought compensation from BetCity over the matter.
While the former BetCity owners agreed to cover the cost of the fines, Entain reserved the right to submit an additional claim, which it has now done. The details of the damages Entain is seeking have not been disclosed, and Entain has not commented on the case.
The claim for damages comes at a difficult time for Entain, as the company recently saw the resignation of CEO Jette Nygaard-Andersen, and reached a deferred prosecution agreement with the Crown Prosecution Service over historic activities in Turkey. Additionally, Goldman Sachs downgraded Entain to sell from buy in November, and reports have emerged suggesting that Entain will be exiting a large number of unregulated markets worldwide.