In a twist of legal reprisal, BetCity’s previous proprietors, culminating from the Singels family lineage, along with erstwhile CEO Melvin Bostelaar and prior marketing lead Robert Kooiman, have fired a substantial counterblow in the clash against gaming behemoth Entain. Unleashing a demanding counterclaim, BetCity’s former leaders have steered the battle to new heights, arguing crucial points of dispute that have surfaced post-acquisition. It’s a narrative of assertive responses following a major acquisition that has swiftly unspiraled into a murky legal spat.
January 2023 marked a significant milestone in the gaming industry as Entain proudly announced the acquisition of BetCity for a robust €450m. This acquisition was not only a financial undertaking but represented strategic leverage, catapulting Entain into the heart of the Dutch gambling market where BetCity reigned as one of the inaugural 10 license holders. The ink had barely dried on this momentous deal when regulatory storm clouds began to gather.
Promptly, a mere year into the new ownership, Entain pressed charges with allegations of betrayed expectations, positing that concealed regulatory probes had devalued their new asset by a staggering €156 million. Entain’s narrative was clear: at the time of the transaction, the existence of two significant regulatory inquiries had been veiled, diluting the true worth of BetCity. With no hint of the hidden investigations at the purchase juncture, Entain claimed ignorance.
Through documents sourced by CasinoNieuws.nl, details emerged that BetCity’s previous ownership had assured Entain of their oblivion to any live regulatory scrutiny. Allegations followed that BetCity insiders were privy to ongoing cases but opted for silence. The Kansspelautoriteit (KSA), the Netherlands’ gambling authority, was said to be steering both investigations of interest.
The opening salvo was returned by the former owners’ counteroffense. In their narrative, Entain had been privy to the investigations during the acquisition period of 2022-2023. Lodged with the High Court of Justice in England and Wales, they threw down a counterclaim gauntlet, seeking a redress amount of €143 million from Entain subsidiaries in the Netherlands and the UK.
At the epicenter of the dispute were two regulatory inquiries dating back to April and May 2022. The first culminated in a €400,000 fine for BetCity’s promotional correspondence with younger adults, in conflict with Dutch law. The second concerned deficiencies regarding anti-money laundering and counter-terrorism financing measures, where BetCity incurred a hefty €3 million penalty for these omissions.
However, the plot thickened as the former owners contended in their counterclaim that Entain was duly informed of the ongoing investigations. Throughout emails, telephone exchanges, and a pivotal November 2022 meeting, they allege that Entain was kept in the loop regarding the twin investigations that surfaced between the contract signing in June 2022 and the deal’s culmination in January the following year. They further argued that Entain expressed concerns about the investigations in a December communique.
Post-acquisition adjustments ensued with Vic Walia at the helm as CEO, as Entain took steps it deems necessary for BetCity to align with Dutch regulation — steps which the former owners are adamant BetCity had already taken in observance of the WWFT, the Dutch Money Laundering and Terrorist Financing Prevention Act.
The aftermath has not been without consequence. The changes by Entain to BetCity’s operations purportedly led to a shortfall of €22 million in projected earnings post-acquisition, translating to a supposed loss of €83 million for the plaintiffs.
The stage is set for a UK High Court battle, with no court dates currently slated, but a long and intricate legal saga is anticipated.
In an environment rife with speculation, rumors percolate about Entain’s possible divestment of BetCity. Reports from the Financial Times suggest that amidst a net loss of £936.5 million for the full year of 2023, disclosed in its March earnings report, Entain may consider offloading BetCity among other assets, focusing instead on operator brands woven into its own platform — sources of substantial net gaming revenue in the prior year. The confluence of court battles and potential strategic pivots holds the industry in suspense, as the giants of gambling brace for the next chapter in this unfolding legal drama.
