Delaware North accuses its former betting partner of fraud and misrepresentation that caused financial losses during March Madness
Casino operator Delaware North is suing its former sports betting partner after wagering operations at its two West Virginia casinos and its mobile betting app in the state were shut down days ahead of this year’s March Madness.
Delaware North filed Thursday night a lawsuit against British gambling provider Miomni Gaming and its CEO Michael P. Venner in the Court of Chancery for the State of Delaware. The casino operator accused its former betting partner and its top executive of fraud and misrepresentation of ownership of “a key part of the BetLucky sports-wagering platform.” The lawsuit went on that Miomni has breached its joint-venture contract with Delaware North.
What Has Prompted the Lawsuit?
Delaware North and Miomni Gaming announced their joint venture for the operation of retail and online sports betting in the newly opened West Virginia wagering market last summer. Delaware North’s casinos in the state – Mardi Gras Casino & Resort and Wheeling Island Hotel Casino Racetrack – were expected to go live with sports gambling in the fall of 2018.
However, the properties’ sportsbooks and the BetLucky betting app were launched in late December after multiple delays, the reason for which was not revealed to the public.
Sports betting at the two facilities and via the mobile app abruptly shut down on March 6, only a few days before the start of the NCAA Division I Men’s Basketball Tournament, known to be the biggest spring sporting event in the US.
The shutdown prevented Delaware North’s digital and brick-and-mortar sportsbooks from drawing significant betting activity and generating additional revenue during the popular event.
Late in March, the casino company announced that it has cut ties with its sports betting partner and that the decision was prompted by a contract dispute between Miomni and third-party betting technology supplier Entergaming.
The abrupt stop of Delaware North’s sports betting operations left West Virginia with just three operational sportsbooks and no mobile betting apps.
The company said last month that they were “evaluating options to once again provide sports wagering services”, but warned that identifying a solution could “take several months or longer.”
In its lawsuit, Delaware North finally provided details about the nature of the ongoing dispute, how it started, and how it wants it to end.
The company accused Miomni and its CEO of “fraudulent inducement” into a joint venture with its subsidiary Delaware North iGaming Inc. and of “willful breach” of their contract. As a result from the alleged fraud, Delaware North has been unable to operate sports betting since March 6, which caused “financial losses” and inconvenienced West Virginia gambling customers.
As mentioned above, the interruption of sports betting operations at the two sportsbooks and via the BetyLucky app was attributed to a contract dispute between Miomni and Cyprus-based third-party betting technology supplier Enterg Software Solutions Limited, also known as Entergaming.
As per Delaware North’s lawsuit, during negotiations over the establishment of the joint venture, Miomni and Mr. Venner, its CEO, told the casino operator that Miomni owned “the intellectual property rights in the platform, including the source code underlying the ‘front-end interface’ and the ‘back-end’ of the platform.”
In other words, the sports betting provider misrepresented ownership of the platform that powered sports betting operations at Mardi Gras Casino and Wheeling Island Casino as well as the wagering app.
A Pattern of Misrepresentation and Bad Faith
Delaware North said in the lawsuit that “it relied on those representations” when it decided to form the joint venture with the British provider of solutions for the gambling industry.
After the March 6 sports betting interruption, Delaware North learned, through communications with Entergaming, that its sports betting partner and its top official’s representations “were ‘false’ and ‘fraudulent’” and that Miomni had never been the owner of an instrumental part of the sports betting platform. It turned out the company only licensed it from Entergaming.
Entergaming has also informed Delaware North that Miomni had never paid the required license fee. That information was concealed from the casino operator during joint venture negotiations.
Miomni attributed the interruption of sports betting at the two West Virginia casinos to a scheme devised by Entergaming to extort the UK provider. Miomni and its CEO also told Delaware North that Entergaming had hacked the sports betting platform.
Delaware North said in its lawsuit that with all the discoveries, it “became clear that Miomni and Venner had engaged in an ongoing pattern off misrepresentation and bad faith.” The casino operator is seeking damages as well as transfer of its former betting partner’s interest in their joint venture in accordance with their previous agreement.
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