BetEasy is trying to recoup a legal bill of over $3.7 million by claiming it was not told of the risk of a potential multi-million dollar lawsuit when purchasing William Hill Australia six years ago.
This $US238 million acquisition was completed in April 2018 when CrownBet purchased William Hill Australia's sports, casino, poker, games and racing betting services, and then rebranded to become BetEasy.
In a NSW Supreme Court lawsuit filed in March, BetEasy has accused William Hill's UK parent company of fraudulently failing to divulge a potential $23 million lawsuit facing its Australian business before it was sold.
The costly claim stems back to early 2011 when a William Hill Australia subsidiary Centrebet sued the Australian Taxation Office in the Federal Court for a GST refund and future tax offsets.
A litigation agreement was entered into between several Centrebet units and directors Con Kafataris and George Kafataris with the aim of divvying up any monetary benefits arising out of the ATO lawsuit.
In December 2011, the tax office agreed to refund the cash and to reduce the amount of GST Centrebet would have to pay in the future.
In March 2017, Con Kafataris flagged that further money should have been paid to the parties and sought to inspect the books of Centrebet and William Hill Australia.
This request was denied and further discussions failed.
Con Kafataris then received advice from high-profile barrister Bret Walker SC and raised a potential $23 million legal claim over the alleged discrepancies in March 2018.
In its lawsuit, BetEasy claims all of this was going on behind-the-scenes as the UK-based William Hill sought to sell its Australian arm in early 2018.
Almost three years after the acquisition was completed, Centrebet was sued separately in the NSW Supreme Court in July 2021 for alleged breaches of the litigation agreement.
BetEasy says it suffered financial losses by paying almost $2.9 million to settle this lawsuit plus an additional $863,000 in legal costs defending the case.
In the most recent Supreme Court lawsuit, the UK-based William Hill has been accused of fraud, breach of contract and breach of Australian consumer law by neglecting to divulge vital details ahead of the takeover.
It could be on the hook for damages, interest and legal costs if BetEasy is successful with its claim.
William Hill has yet to file a defence.
