EBET and BtoBet’s co-founders initiate legal action against Aspire Global

Lea Hogg 7 months ago
EBET and BtoBet’s co-founders initiate legal action against Aspire Global

In the ever-evolving gaming industry, legal battles have emerged as the co-founders of BtoBet and EBET INC. (Esports Technologies, Inc) took a stand against industry heavyweight Aspire Global. The intricacies of these legal disputes, initiated by the co-founders of BtoBet and separately EBET, unravel alleged breaches relating to Aspire Global. 

The legal claims shed light on the complexities of Aspire Global’s dealings, from overspending and undercharging to accusations of fraudulent activities. 

These legal disputes may have broader implications, particularly as Aspire Global was subsequently acquired by NeoGames, currently undergoing an acquisition by Aristocrat. 

Co-founders of BtoBet (Sousa Enterprises Ltd/Eltsar Ltd) v. Aspire Global

In a legal dispute (picture below), that has recently come to light, the co-founders of BtoBet, Messrs. Alessandro Fried and Igor Lestar through their respective companies, have initiated a legal claim against Aspire Global, alleging breaches of the Share Purchase Agreement (SPA). The intricacies of the case reveal that the dispute centres around Aspire Global’s acquisition of BtoBet in 2020. The deal, which included an upfront payment and a substantial Earnout Consideration, was designed to reward co-founders of BtoBet Messrs. Fried and Lestar, based on BtoBet’s earnings post-acquisition.

Alleged breach by Aspire Global

However, the claimants contend that Aspire Global breached the SPA by overspending and undercharging during the Earnout Period, deliberately diminishing profits and, consequently, the Earnout Consideration. The current filed claim amounts to €36 million but this figure could easily escalate. The claimants assert that Aspire Global failed to comply with the Earnout Protections outlined in the SPA, leading to improper reductions in the Earnout EBIT.

The complexity of the case and the potential financial ramifications highlight the significance of the ongoing legal proceedings, with the defence filing a response (picture below) to the claim this week. The main trial likely to take place in 2025. 

EBET v. Aspire Global

EBET INC. (Esports Technologies, Inc) has also taken legal action by filing a lawsuit in the State of Nevada (picture below), against Aspire Global, AG Communications, and their affiliated entities. The legal proceeding asserts damages totalling no less than Euros 65,000,000. This sum encompasses compensatory damages, punitive damages and other damages that will be proven during the trial. The basis for this legal action revolves around Aspire Global’s alleged fraudulent activities and a material breach of a previously established share purchase agreement.

Aspire Global’s alleged fraudulent conduct

Under the terms of the share purchase agreement, EBET acquired specific B2C iGaming assets and associated websites from Aspire. Simultaneously, both parties entered into a white label operator agreement, outlining collaborative efforts in the operation of the acquired assets.

EBET’s claims are multifaceted, encompassing serious accusations against Aspire’s alleged fraudulent conduct that include Aspire’s alleged manipulation of books and records. The accusations include grossly overstating and falsifying active player data, a critical aspect of the business financial health. Additionally, Aspire is accused of materially failing to maintain necessary operations in Germany, violating the terms of the agreements.

Furthermore, EBET contends that Aspire materially breached its duties under the operator agreements. These breaches are not limited only to the falsification of records but extend to a range of actions that EBET argues are in violation of the established contractual obligations. The lawsuit encompasses a comprehensive set of claims, covering various aspects of Aspire’s alleged misconduct.

In addition to the primary claims relating to fraud and breach of contract, EBET’s legal action encompasses other causes of action. These may include but are not necessarily limited to violations of industry regulations, potential harm to EBET’s business reputation and any other relevant legal grounds that may emerge during the course of the trial.

EBET, INC.’s decision to pursue legal action is a significant step in seeking redress for the alleged damages resulting from Aspire’s actions. The legal process will unfold as both parties present their arguments and evidence, with the final judgment determining the outcome of this complex and contentious dispute.

Aspire Global’s defence to the claims

As the legal actions unfold, the stakes are high for both EBET and the co-founders of BtoBet, each seeking redress for alleged damages inflicted by Aspire Global. 

With the claim from the co-founders of BtoBet’s focused on breaches of an Earnout Consideration payment and EBET’s legal action centred on allegations of fraudulent conduct and breach of contract, the legal battles against Aspire Global will shape the trajectory of these companies and the gaming sector at large. 

The complicated web of legal proceedings, defence preparations and potential trials sets the stage for a contentious legal drama with far-reaching consequences, making it a focal point of interest within the gaming industry

Declined to comment

SiGMA News has sought comments from the parties involved in the two cases, including the claimants and the defence. As of the publication of this article, the claimants have indicated their preference to abstain from providing comments. At present, there has been no response from the defendants.

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