Online gambling operator BetMGM‘s parent company, MGM Resorts International, doesn’t seem troubled by pending legal issues relating to Entain and LeoVegas. Both organizations are closely associated with the BetMGM reputation at the moment.
Jersey City, NJ-based BetMGM is the US online casino market leader.
MGM wants to expand on that online gambling reach by entering the European market, which is where LeoVegas comes in. On Friday, an MGM subsidiary announced it “received all relevant approvals” to make an offer to buy Sweden-headquartered LeoVegas Group. The purchase price is expected to be $607 million.
Regarding Entain, MGM hasn’t commented on its BetMGM joint venture partner’s woes. Isle of Man-based Entain announced on Aug. 17 that it reached a £17 million settlement with the UK Gambling Commission (UKGC). The settlement relates to “alleged historical licensing breaches.”
A BetMGM representative didn’t immediately return Bonus.com‘s request for comment, which Bonus.com first sent on Aug. 17 and renewed today.
MGM stock prices decreased nearly 3% today.
BetMGM Plans to Buy LeoVegas Group
MGM, with its roaring “Leo the Lion” logo, renewed its message on Friday that its efforts to buy LeoVegas were proceeding. A visit to the lion-logoed LeoVegas site shows that on Aug. 11, its leaders also spoke excitedly of the sale during the Q2 2022 earnings results call.
MGM’s press release on Friday shows its Stockholm-based “indirect subsidiary” MGM Casino Next Lion (MGM CNL) is proceeding on schedule to buy LeoVegas.
MGM CNL says:
The condition regarding the receipt of all necessary regulatory, governmental, or similar clearances, approvals, and decisions is fulfilled. All other conditions specified in the Offer Document, including conditions for completion of the Offer, still apply. As previously announced, the acceptance period for the Offer expires on 30 August 2022.
If LeoVegas accepts the MGM CNL offer, the indirect MGM subsidiary will begin buying LeoVegas shares on Sept. 7.
The expansion project in the US and New Jersey was paused at the end of the quarter due to the ongoing bid and the initiatives and obligations that MGM already has in the US market. The assessment is therefore that the most responsible course of action is to pause the expansion until we know whether the bid on LeoVegas will be accepted. If a launch is made possible in the future, we will be able to resume the US expansion with a short start-up period.
LeoVegas Troubles Continue
The Swedish Economic Crime Authority (SECA) shows no updates on its site today about its preliminary investigation into insider trading allegations against LeoVegas. SECA is exploring claims that LeoVegas representatives used inside knowledge about the MGM CNL bid.
On June 7, LeoVegas published a statement on its site about the SECA allegations.
That’s the most prominent legal matter facing LeoVegas, but there’s more:
- On Aug. 3, 2022, the UKGC announced that it would fine LeoVegas £1.32 million “for social responsibility and anti-money laundering failures.” In its Q2 2022 earnings transcript, LeoVegas says: “UKGC issued a sanction fee of GBP 1.3 m (EUR 1.6 m) to LeoVegas relating to deficiencies in procedures during the period from October 2019 to October 2020. At the time of the assessment, LeoVegas had already taken actions to improve and update procedures and processes.”
- On Oct. 28, 2021, the Danish Gambling Authority (DGA) said it “reprimanded LeoVegas for breaching the rules” regarding money laundering. In that same announcement, the DGA said it wouldn’t act on the reprimand because LeoVegas instituted new and better business practices.
- On May 2, 2018, the UKGC fined LeoVegas £600,000 for “advertising and marketing failings.” LeoVegas responded by making a payment in lieu of the financial penalty, rectifying errors with self-excluded gamblers, and improving its marketing policies with affiliates.
Entain Announced Its UKGC Settlement
The entity with the sum logo Σ will pay UKGC a total of £14 million for “alleged historical licensing breaches,” Entain announced on Aug. 17.
Entain accepts the UKGC’s findings “in order to bring the matter to a close and avoid further costly and protracted legal proceedings.”
The £14 million fine relating to its digital business and the £3 million penalty regarding its retail business relate to Entain allegedly not evolving quickly enough to comply with regulations.
The sites include:
UKGC says the retail penalties relate to “failures at its Ladbrokes Betting & Gaming Limited operation, which runs 2,746 gambling premises across Britain.”
Entain accepts that certain legacy systems and processes supporting the operations of its British business during 2019 and 2020 were not in line with the evolving regulatory expectations of the Commission in respect to aspects of social responsibility and anti-money laundering (“AML”) safeguards. However, the Group also notes the Commission’s statement that it found no evidence whatsoever of criminal spend within Entain’s operations.
Despite these issues, Entain and LeoVegas appear to be online gambling industry darlings.
LeoVegas says so in its Q2 2022 earnings transcript:
LeoVegas won the award “Online Casino of the Year” at the Global Gaming Awards and “Online Gaming Operator of the Year” at the International Gaming Awards.
On July 18, Entain tweets:
This is amazing!
Last week, Entain scooped the award for Socially Responsible Operator of the Year at the @SBCGAMINGNEWS Awards North America for the second consecutive year!
“Irony is not dead,” Richard Schuetz comments on Aug. 17 in his retweet of Entain’s post.