Dutch court forces Sega Sammy to complete Stakelogic deal

Sega Sammy is mandated to move forward with its €130 million acquisition of Stakelogic, despite expressing apprehensions regarding potential criminal liabilities linked to the supplier’s alleged activities in Japan and Turkey. The Amsterdam District Court upheld the original agreement and rejected Sega Sammy Creation’s attempt to withdraw from the deal.

### Court Ruling Upholds Share Purchase Agreement

Judge C.W.D. Bom ruled that Sega Sammy is obligated to adhere to the Share Purchase Agreement (SPA) executed in July 2024 with a consortium of sellers, including former owner Triple Bells, and investment firms Bettor Capital and Oakvale Ventures. This ruling is significant for stakeholders in the gambling sector, as it illustrates the court’s affirmation of contractual obligations in complex business transactions.

### Allegations of Regulatory Breaches

Sega Sammy raised claims that specific conditions essential for the completion of the acquisition had not been satisfied, pointing to alleged regulatory infringements by Stakelogic in both Japan and Turkey. The company contended that Stakelogic had not fulfilled key pre-closing requirements, using this as a basis to request termination of the agreement. However, the court refuted these claims, interpreting the SPA’s language and its limitations on contract termination as not supporting Sega Sammy’s argument for withdrawal.

#### Key Judgment Insights

The court emphasized:

> “The most obvious text-based meaning of this provision is that no rescission of the SPA is possible, either in-court or out-of-court.”

This statement underscores the importance of clearly defined contractual terms in the gambling industry, where compliance with legal norms is paramount. The court further asserted that any alleged violations should be addressed through financial remedies, not through nullifying the agreement. It concluded that all requisite conditions, including regulatory approvals, had indeed been satisfied by the sellers.

### Investigative Limitations and Responsibilities

The court also dismissed Sega Sammy’s assertion that it should conduct additional investigations into the availability of Stakelogic’s games in restricted markets. The judgment stated:

> “Ascertaining whether or not the Target infringed any regulatory laws would require an in-depth investigation into the Target’s actions and activities in all relevant jurisdictions, which is incompatible with this purpose.”

### Legal Risks and Compliance Insights

Sega Sammy voiced concerns regarding significant legal risks, such as the potential loss of gaming licenses and even criminal responsibility if it proceeded with the acquisition. However, the court found these alarms to be unfounded. A report from Triple Bells indicated that geo-blocking measures had been effectively implemented during the pertinent period, suggesting that access to Stakelogic’s content from Japan could have occurred through the use of VPNs.

The court deemed it highly unlikely that Stakelogic would neglect to enforce geo-blocking in jurisdictions where online gambling is strictly banned. The implications for existing licenses in regulated markets are profound, as non-compliance could result in severe repercussions.

Additionally, the court noted that Sega Sammy’s own testing had only engaged demo versions of Stakelogic’s games. It highlighted that even if full access had been attained, legal accountability would be ambiguous since Stakelogic operates as a content supplier rather than a direct-to-consumer entity.

### Conclusion: Timely Acquisition Required

Ultimately, the court mandated that Sega Sammy and its parent corporation, Sega Sammy Holdings Inc., must finalize the acquisition within a two-week period or incur a €10 million penalty for failure to comply. This ruling exemplifies the judiciary’s commitment to upholding contractual obligations in the gambling industry, reinforcing the critical importance of due diligence and legal vigilance in high-stakes acquisitions.

By navigating the complexities of regulatory compliance and understanding the legal landscape, companies in the gambling sector can better position themselves for successful transactions and sustainable growth in an increasingly competitive market.