Entain, a prominent gambling corporation, has revealed potential losses in the sale of its Dutch subsidiary, BetCity.nl. Documents filed with the High Court of England and Wales indicate that the value of BetCity.nl has diminished significantly following a deal with another corporation, Sports Entertainment BV.
Entain alleges that Sports withheld crucial information regarding regulatory violations at BetCity.nl, prompting Entain to file a lawsuit. In 2022, Entain had agreed to acquire BetCity.nl for €850 million. However, following the deal's completion, BetCity.nl's value is estimated to be €68-156 million less than anticipated.
The acquisition deal included a performance fee of €550 million for BetCity, contingent on the company increasing its EBITDA tenfold in the 2023 financial year. However, BetCity was subsequently fined €3 million for non-compliance with Dutch anti-money laundering and terrorism financing laws.
Entain asserts that Sports intentionally concealed BetCity's regulatory breaches, leading to unforeseen losses in the subsidiary's value. The lawsuit highlights the complexities and risks involved in mergers and acquisitions within the gambling industry.
