Is BetMGM’s Bid To Acquire LeoVegas In Peril As Swedish Authorities Allege Insider Trading?

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BetMGM, the US online casino market leader, is considering buying competitor LeoVegas Group. Or at least it was. It’s unclear if today’s announced investigation into LeoVegas concerning possible insider trading will impact BetMGM’s $607 million acquisition offer.

On May 2, Jersey City, NJ-headquartered BetMGM released information about the online gambling operator’s bid to buy Sweden-based LeoVegas Group, which owns the LeoVegas and Royal Panda. The two brands compete in Ontario‘s iGaming market.

Today, LeoVegas issued a press release, saying:

On the 7 of June LeoVegas was contacted by the Swedish Economic Crime Authority due to a preliminary investigation concerning suspected insider trading in the company’s shares. LeoVegas is fully assisting the authorities in their investigation.

No employee, member in the management team or board member in the Company has been notified about any criminal suspicion. The Company has no further information to provide. All questions concerning the preliminary investigation need to be directed to the Swedish Economic Crime Authority.

Elisa Richardson, BetMGM’s head of public relations and communications, referred all inquiries from Bonus about the matter to LeoVegas this afternoon.

Meanwhile, investors seemed to largely ignore today’s news.

LeoVegas Group stock dipped slightly today, by 0.17%.

BetMGM is a joint venture between Isle of Man-based Entain and Las Vegas-headquartered MGM Resorts International and, as such, doesn’t have publicly traded stock. Entain’s shares rose 1.9% and MGM declined 0.25% before noon today.

European Online Casino Markets Strict

On its site, the Swedish Economic Crime Authority (SECA) says, “We prevent and fight economic crime.” It lists many of the cases it’s working on, including organized crime being linked to dog sales. However, it doesn’t list the LeoVegas investigation.

An entity that does include an announcement about LeoVegas is the Danish Gambling Authority (DGA).

In October 2021, far before BetMGM announced its acquisition intentions, the DGA said it “reprimanded LeoVegas for breaching the rules” regarding money laundering.

Sweden and Denmark aren’t the only European countries vigilant about online casino regulation. The UK and Ireland also recently tightened rules for legal iGaming operators.

Part of the reason European regulators may be strict is they say they’re fighting more and more illegal actors.

As the DGA states in February in its report titled Report On Illegal Gambling 2021:

In 2021, 55 websites with illegal gambling activities were blocked. This is the highest number of blocked websites ever.

BetMGM Is Interested In the European Market

LeoVegas intends to accept BetMGM’s bid this month and finalize the deal in August.

When BetMGM announced the possible acquisition, MGM CEO and President Bill Hornbuckle highlighted the Swedish operator’s international operations. He didn’t mention Ontario.

Hornbuckle said on May 2:

Our vision is to be the world’s premier gaming entertainment company, and this strategic opportunity with LeoVegas will allow us to continue to grow our reach throughout the world. We have achieved remarkable success with BetMGM in the US, and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally.

Meanwhile, LeoVegas Group calls itself the “King of Casino.”

It characterizes its flagship brand, LeoVegas, as “one of Europe’s leading mobile casinos.”

The group’s other brands, listed in the order in which the company names them, include:

  • Royal Panda
  • GoGoCasino
  • LiveCasino
  • Bet UK
  • Pixel.bet
  • Pink Casino
  • 21.co.uk
  • Slot Boss
  • Expekt

Based on timelines for other companies accused by Swedish authorities of insider trading, the matter could take months to resolve. However, it may not legally prevent the acquisition from going forward. The question will be if BetMGM wants to go forward with the deal.

While not a European case, one notable insider trading accusation in the gambling world was the Amaya scandal of 2016. The Quebec Autorité des marchés financiers (AMF) accused CEO David Baazov of insider trading when Amaya bought the much larger PokerStars. In 2018, a court in Quebec threw out the charges against Baazov, who had already left his position at the company by then.

Amaya later changed its name to The Stars Group (TSG) and is now part of Dublin-based Flutter Entertainment.

About the Author

Heather Fletcher

Heather Fletcher is the lead writer at Bonus, concentrating on online casino coverage. She had her first published byline at age 10, but didn't get paid for her writing until she got her first newspaper job. Fletcher's newspaper career started at Suburban News Publications in Ohio and eventually took her to The New York Times, where she's still a contract freelance reporter for the National Desk. She covers breaking news from Philadelphia, as needed. In March 2021, Fletcher began writing about online casino gambling as the lead writer for Online Poker Report.

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