Another week, another pair of gambling firms exit the UK market as worsening economic conditions – and fears over tightened regulation – force operators’ hands.
SportNation and RedZone will cease to operate on these shores as of the end of November, after their owner Esports Entertainment Group (EEG) decided to pull the plug on the two sports betting platforms.
EEG are thought to be in a rather beleaguered position, after it was reported earlier this year that they had defaulted on debt payments – despite recording a 190.7% increase in revenue.
And in their quarterly report back in April, the firm’s directors admitted they had ‘substantial doubt about its [EEG] ability to continue as a going concern for a least one year’, after confirming they had welched on a loan repayment.
That heralded a raft of internal changes and restructuring, however it would appear that hopes to get EEG back on an even keel financially have gone aground.
SportNation and RedZone were previously operated by Argyll Entertainment, however they were the subject of a successful takeover bid by EEG back in August 2020. They took over the running of the brands and their UK Gambling Commission licence.
In April 2019, EEG made history as the first esports betting company to be publicly listed, however three-and-a-half years later things have become rather more challenging for the outfit – their sheer existence is thought to be under threat due to unpaid creditors bills.
What Happened to SportNation?
It was confirmed earlier this week that SportNation and RedZone, the two sports betting properties EEG acquired from Argyll, will shutter their doors to UK punters at the end of November.
You can still login to your account, withdraw your funds and even place bets….as long as they will settle before November 30.
In an FAQ posted on the SportNation site (and archived here), the bookmaker confirms they are being closed ‘….for a variety of reasons, including the economics of operating a small iGaming business in the UK market.’
They offer full instructions for making withdrawals and offer a range of answers to what will, presumably, be commonly asked questions.
At the end of the FAQ, SportNation try to gently persuade punters to join Fitzdares, promoting their World Cup sign-up offer. It’s not known what the connection between EEG and Fitzdares is, if there even is one.
There is one section of SportNation’s closing FAQ that is worrisome. They claim that all ante-post bets ‘that are due to settle after 30th November 2022 will be voided and the stake returned to your account’, and punters would then have until December 7 to withdraw those monies.
Those holding betslips of Erling Haaland to finish as the Premier League’s top goalscorer, or Manchester City to win the title, might be rather peeved that their in-running ante-post wagers are effectively being scratched.
Is this legal? And how do bookmakers normally settle bets in these situations?
What Happens to Bets When a Bookmaker Closes Down?
There is nothing illegal about EEG from voiding ante-post bets – assuming, that is, they have the cash reserves to pay out the necessary refunds.
And here’s another bombshell from SportNation’s terms and conditions: in the event of insolvency, customers’ funds are NOT protected by segregation, meaning that the money you have with SportNation or RedZone is not ringfenced in a separate bank account.
The good news is that EEG will have to cough up, as they remain active, however if they go bust in the days or weeks ahead then the situation could become rather precarious.
In 2019, BetBright were acquired in a complex deal by 888, who refused to settle BetBright’s outstanding liabilities – thought to be £1 million in ante-post Premier League bets alone. It was only the goodwill of BetVictor, who agreed to foot the bill, that saw the affected punters get their money back.
MoPlay was another firm that went bust in 2020, and a bizarre situation unravelled in which their customer database was sent to an auction – Betfred won, and were tasked with repaying MoPlay’s punters….with mixed results, it seems.
My tip would be to watch what happens with EEG closely. If they plead poverty, they could try to wriggle out of repaying voided antepost bets or outstanding account balances, given their status as a ‘no protection’ operator.
When will the UK Gambling Commission wise up and refuse licences to those firms that are unwilling to segregate their customers’ funds?