Canadian 37E Sues GVC Over Failed Sports Betting Venture

One of the indicators of a company having entered the big league is when it is involved in international acquisitions. Another indicator is when it is involved in international litigations. 37 Entertainment (37E), a Canadian company, has entered the big league via the second route. A report in the Times stated that 37E has sued the UK online gambling giant GVC Holdings over an aborted joint venture.

37E is a Montreal based sports and entertainment consultancy run by sports writer Doug Honegger. It has filed a petition seeking “declaratory judgment” in the London Court of International Arbitration. The issue is a failed bid to launch two Sportingbet-branded web sites for Canadian punters. The petition claims that 37E and GVC had reached an understanding last year about the launch of the two sports betting sites. One of them was to service the province of Quebec and the other was to cater to the rest of the Canadian market. 37E was to handle the marketing, while GVC was to provide the gambling services. The two parties were to equally share the proceeds.

The case seems to be weak for 37E because there never was any written contract between the two companies. The Canadian operator is primarily relying on what it calls an “overwhelming number of written and verbal commitments” given by GVC that the deal would go forward. 37E is further relying on the trading reports, financial statements and internal information regarding GVC’s Canadian-facing business given by the UK operator. 37E claims that the contract was to be signed in February this year. From then GVC kept providing new excuses to delay signing the contract on one hand, while maintain that all was well on the other. In June 2015, GVC officially backed out.

The GVC spokesman pointed out that all that transpired between them, including the passing on of trade information, was merely exploration of possibilities. It is routine to supply such information during such discussions but “not all opportunities reach maturity”. Without any formal agreement, 37E’s claim is without merit said GVC.

37E alleged that the failure of its deal was likely related to GVC’s efforts to acquire Bwin.party digital entertainment. Either there was a conflict of interest in the two deals for GVC or it could not handle both at the same time. GVC has made a £1.03b cash-and-shares offer to acquire Bwin.party. It seems that 888 Holdings have bettered that, though the last word is yet to be said.

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