Entain Plc has initiated legal proceedings against the former owners of BetCity.nl, the Dutch sportsbook and igaming property of the FTSE100 gambling group.
A lawsuit has been filed in the Commercial Court of England by Clifford Chance, representing Entain Netherlands BV, against former owners of BetCity.nl, primarily consisting of the Singels Family and associates.
Entain has filed a ‘Part-7 Claim Form’ which, as detailed by the Commercial Court Guide, indicates that the matter relates to a complex contractual dispute requiring legal intervention.
The lawsuit has been initiated against Sports Entertainment Media BV, seven members of the Singels Family, former BetCity CEO Melvin Bostelaar and former executive Robert Kooiman.
In 2022, Entain agreed terms to acquire BetEnt BV, the Dutch KOA licensed operator of BetCity.nl for a valuation of €850m. Initial deal terms saw Entain acquire the shareholding of Sports Entertainment Media BV for a cash offer of €300m.
Boosting BetCity’s valuation, the acquisition was reported to carry deferred considerations of €550m elevating deal terms above the €800m mark. As detailed by Entain’s 2022 offer, a €550m contingency reward would be paid out in 2024, based on a target of BetCity’s 10x EBITDA for the financial year 2023.
Entain justified the premium on BetCity, stating that it had acquired a podium-placed operator within the newly regulated Dutch online gambling market, following the approval of the Netherlands’ Remote Gambling Act (KOA Act) in October 2021.
2023 proceedings saw Melvin Bostelaar replaced as BetCity CEO by Vic Walia, and Robert Kooiman depart the company at the end of year. In November, BetCity was fined €3m for significant failures of the Netherlands Money Laundering and Terrorism Financing Prevention Act (Wwft).
Despite regulatory challenges in the Netherlands, Entain has underscored the long-term prospects of BetCity maintaining its position as Dutch market leader and increasing its market share.
Following a chaotic 2023, Entain will proceed to reorganise its business after announcing sweeping changes to its boardroom, which will elect a new CEO following the departure of Jette Nygaard-Andersen.
Entain ended a turbulent year by announcing that it had agreed on the terms of a £600m settlement with HMRC related to the breaches of the Bribery Act by former operating company GVC Holdings in Turkey.
As announced in December, Entain is currently led by former non-executive director Stella David in the position of Interim CEO, awaiting the appointment of a permanent incumbent. At present, both the former owners of BetCity and Entain have not commented on the lawsuit.
Do not hesitate to subscribe to our Telegram-channel!