BetCity’s dispute with Entain over compliance
The former owners of BetCity, including various members of the Singels family, former CEO Melvin Bostelaar, and former marketing director Robert Kooiman, have launched a counterclaim against Entain, demanding €104 million. This comes in response to Entain’s original accusation that undisclosed regulatory investigations at the time of acquisition had reduced the value of the Dutch-facing business by as much as €156 million (£133 million/$169 million).
Entain had acquired BetCity for €450 million in January 2023, which allowed it access to the Dutch market. BetCity was among the first ten licensees in the Netherlands. However, Entain initiated a compensation claim in January this year after discovering two regulatory cases. Entain claimed it was unaware of these investigations at the time of the acquisition.
According to a document obtained by CasinoNieuws.nl, Entain stated that BetCity’s former owners had signed documents claiming they were unaware of any ongoing regulatory investigations. The filing alleges that several BetCity personnel knew about the cases but did not disclose this information.
The Dutch gambling regulator, Kansspelautoriteit (KSA), was leading both investigations. In the counterclaim, the plaintiffs accuse Entain of being aware of the investigations during the acquisition stage of 2022 and 2023. The counterclaim was filed with the High Court of Justice in England and Wales on 19 March 2024, seeking a total of €143 million from Entain Holdings (Netherlands) BV and Entain Holdings (UK) Limited.
The two investigations, which BetCity was informed about in April 2022, were related to promotional emails sent to young adults, which is a breach of Dutch law and resulted in a €400,000 fine, and shortcomings with anti-money laundering and terrorist financing measures, which resulted in a €3 million fine.
Significant financial setback
The plaintiffs highlight that in November and December 2022, the BetCity team informed Entain of the ongoing investigations through various means, including emails, telephone conversations, and a meeting on 17 November 2022. It is understood that on 10 December 2022, Entain also expressed its concerns about the two investigations in a letter.
After the acquisition and the appointment of Vic Walia as CEO, (above in photo), Entain made several changes to BetCity’s business operations, which it claims were necessary to comply with Dutch law. However, the plaintiffs deny this in their counterclaim, stating that BetCity was already in compliance with the Netherlands’ Money Laundering and Terrorist Financing Prevention Act (WWFT) at the time of the agreement and afterwards.
Due to the changes in business operations, BetCity earned €22 million less after the acquisition than projected as part of the earn-out for the former owners, resulting in a loss of €83 million for the plaintiffs.
The High Court of Justice in the UK will hear both cases. While court dates have not been announced, Entain is reportedly looking to sell multiple overseas brands after a tumultuous 2023.
