GVC facing multi-million dollar lawsuit
Firm accused of reneging on Canada-facing JV agreement with Montreal marketing firm
GVC Holdings could be facing a multi-million dollar pay-out after being accused of reneging on a 50-50 joint-venture deal with Canadian sports and entertainment consultancy firm 37Entertainment (37E),which this morning revealed it had filed a lawsuit against the operator.
According to the filing, GVC last year agreed to work alongside the Montreal-based 37E to launch and operate two Canada-facing sport betting websites, with GVC providing the technology and products and 37E the local marketing expertise.
However, 37E said that despite entering into a verbal agreement and 37E having worked on the project in good faith since August 2014, GVC repeatedly delayed the signing of an official contract and in June declared it no longer had the intention of doing so.
The firm has asked the the London Court of International Arbitration to grant a ‘declaratory judgment’ in a bid to recoup costs and potentially claim its share of a JV that GVC allegedly estimated to be worth “hundreds of millions of dollars” which 37E warned could “have a material effect on the business, financial condition and operations of GVC”.
37E said the JV had developed to such an extent that it had been receiving a raft of sensitive information related to GVC’s Canadian business on a regular basis, including trading reports and financial information, while 37E had also managed the redesign of the ca.sportingbet.com and qc.sportingbet.com sites.
The initial reluctance and subsequent refusal to sign a deal has been attributed to GVC’s ongoing attempts to acquire bwin.party. In its court filing, 37E argued that verbal and written correspondence made it “patently obvious that an agreement was concluded between the parties and that GVC refuses to sign for purely strategic reasons”.
GVC this morning refuted the claims made by 37E and said it regularly looked at potential partnership deals.
“This is a claim without merit,” a GVC spokesperson said. “No formal agreement was reached with the company. GVC is continuously exploring new relationships in new geographies and not all opportunities reach maturity.”
GVC is currently battling 888 in bid to acquire bwin.party. Earlier this month the firm lodged a 125.5p proposal and is currently in talks with bwin.party about how a combination would work.