Ex-BetCity owners defend bonus costs and VAT structure in ongoing Entain lawsuit
The former owners of the Dutch operator respond to Entain’s accusations in the latest twist of the ongoing legal saga
BetCity’s former owners have hit back at accusations made by Entain during the ongoing legal battle between the two companies.
In the latest twist, as first reported by Casino Nieuws, Entain alleged BetCity incorrectly calculated its bonus costs, as well as using the wrong VAT exempt structure to avoid proper tax liability.
Regarding the bonus costs, or the total amount spent on customer bonuses, Entain claimed BetCity should have accounted for higher figures due to an impending ban on untargeted advertising, which came into effect in the Dutch market on 1 July 2023.
BetCity claims this is an invalid argument, as it had been known for over 18 months that the advertising ban would come into effect.
Furthermore, the Dutch operator suggested Entain only made this request eight months after the bonus costs had been agreed in August 2023.
The ex-BetCity owners also claim that Entain’s own bonus cost caluclations were incorrect, and that the operator never explained how BetCity should adjust their own figures.
Entain also accused former part owner Mario Singels of not responding to emails from BetCity CEO Vic Walia about said bonus costs.
BetCity have argued that Singels didn’t need to respond to any discussions about the bonus costs as they had already been agreed upon, and therefore would have no bearing on any agreement going forward.
With regards to the VAT exempt structure, BetCity said that its proposed structure is in fact possible for Entain to adhere to.
The proposed structure would see Entain use offices in Malta and Gibraltar, giving it the chance to transfer supplier costs to offices in Malta – meaning the company wouldn’t actually have to pay tax in the Netherlands.
BetCity claims this is the reason that a large proportion of Dutch licence holders are based in Malta, so Entain would be permitted to do the same.
This would mean that, in BetCity’s opinion, the terms of the sale agreement haven’t been violated in any way.
Entain initially filed a lawsuit against BetCity – and its former owners the Singels family – regarding the cost issue in UK Commercial Court in December 2023.
Entain would later go on to claim that BetCity failed to disclose ongoing anti-money laundering (AML) investigations by the Netherlands Gambling Authority (KSA), in addition to claiming that the Dutch company’s valuation had fallen by €156m.
BetCity then filed a €104m countersuit against Entain in March 2024, which claimed that the FTSE 100 operator was indeed aware of the KSA investigations.