Entain’s BetCity Acquisition is officially complete
One of the world’s largest sports betting and iGaming companies, Entain, recently announced the completion of its acquisition of Netherlands-based operator BetCity. The acquisition has officially been in the works since June 2022 as Entain confirmed that it would be re-entering the regulated Dutch gambling markets. The Isle of Man-based operator has now returned to the Netherlands after taking over BetCity for €450 million from Sports Entertainment Media.
The deal could rise to as high as €850 million depending on BetCity’s financial performance in 2023. ©Ibrahim Boran/Unsplash
The acquisition strengthens an already-impressive portfolio of Entain. BetCity will join brands like bwin, Coral, Eurobet, Ladbrokes, PartyCasino, and others operating under the Entain Group. In 2022, Entain successfully entered the German gambling market and helped its partner, Greentube, expand its operations by entering the gambling market of Ontario, Canada.
While Entain boasts an imposing profile, its latest acquisition has its own positive reputation in the market. The operator has been active in the offline Dutch gambling market for over 40 years. On September 29th, 2021, the Dutch Gambling Authority – Kansspelautoriteit (KSA) issued the online gambling license to BetCity. This made the Amsterdam-based operator one of the first ten gambling license holders in the nation’s newly regulated market that started on October 1st, 2021.
With a 20% market share in the fourth quarter of 2021, BetCity became the Dutch gambling market’s leading operator. That is what caught the eye of Entain, which was looking to expand its operations across Europe by entering the Dutch gambling markets. Entain has a plethora of operators on board, but none of them could secure a Dutch gambling license in the initial issuance phase of 2021. As the brands under Entain operate in other countries around the world, the Isle of Man-based operator acquired one of the Netherlands’ leading operators was finally able to enter the Dutch gambling market.
The finances of the deal
The fee for the acquisition will be paid in three parts. The Entain Group will pay an initial consideration sum of €300 million. Following that, a payment will be made after determining BetCity’s financial performance in the past year. Once that payment is complete, it will be followed by a contingent payment that is scheduled for next year. That sum will be ten times the EBITDA that BetCity records in 2023. The final contingent payment will be made once the Dutch operator completes migration onto the Entain platform – and the sum of the contingent payment will be €50 million.
As of now, Entain believes that the total acquisition cost will be around €450 million. However, the parameters could change depending on BetCity’s performance in 2023. Hence, the cap for the maximum payable amount has been kept at a whopping €850 million. After dotting the i’s and crossing the t’s, the CEO of Entain, Jette Nygaard-Andersen, expressed her thoughts on the acquisition of BetCity that brings Entain back to the Netherlands.
“We are pleased to have completed the acquisition of BetCity. The combination of BetCity’s local expertise and strong brand, alongside Entain’s global scale and market-leading platform, provides customers with an enriched and broader offering of engaging products, fresh content, and new experiences. This transaction further underpins our growth strategy of operating in and expanding further into attractive regulated markets. We look forward to working with Melvin and the BetCity team as we execute the significant opportunities in the Dutch market.”
Entain entered the German Market in 2022
It is quite evident that the Entain Group intends to expand across the European continent after finally entering the Dutch gambling market this year. Another significant move for the operator came in November 2022, when it entered the German gambling market. Before the Gemeinsame Glucksspielbehorde der Lander (GGL) took over as the country’s first ever central Gambling Authority, Entain submitted five license applications.
The operator received approvals for all five of these licenses and legally entered the German gambling market just two months ago. Entain received iGaming licenses for bwin, Ladbrokes, and Sportingbet. Two licenses for digital poker were also issued to bwin and Ladbrokes, making Entain the nation’s first legal operator to provide that service. Germany has a new regulator in GGL now. As long as Entain refrains from flouting the country’s gambling guidelines, the operator will be legitimate in Germany till 2027, after which the current licenses will need renewal.
Entain helped Greentube enter Ontario in 2022
As Entain focused on its European expansion, the entity helped one of its partners, Greentube, enter the Canadian iGaming market. After receiving license approval from the Alcohol and Gaming Commission of Ontario (AGCO), Novomatic’s online division’s operator could legally provide its services via Entain’s brands like BetMGM, PartyCasino, and bwin in Ontario.
Greentube was already active in several provinces of Canada, such as British Columbia, Quebec, Manitoba, and Saskatchewan. However, the expansion after entering the Ontario iGaming market contributed to the operator’s North American expansion plan. According to the company’s commercial director, David Bolas, this move was a major milestone for Greentube and also proof of its fruitful partnership with Entain.
