The Japanese global holding company attempted to step away from the deal, citing significant regulatory and compliance concerns shifting its initial risk projections
A Dutch court has ordered Sega Sammy Holdings to proceed with its €130 million ($147.25 million) acquisition of Dutch game developer Stakelogic, rejecting the Japanese gaming giant’s bid to cancel the deal over regulatory concerns. The outcome of this case underlines the importance of proper due diligence during M&A operations and could set a precedent for similar deals.
Sega Sammy Alleged the Deal Would Expose It to Unexpected Risks
Amsterdam District Court Judge C.W.D. Bom’s ruling maintains the July 2024 Share Purchase Agreement (SPA) between Sega Sammy’s subsidiary, Sega Sammy Creation (SSC), and a consortium of Stakelogic’s sellers, including Triple Bells, Bettor Capital, and Oakvale Ventures. While the Japanese company first pursued the acquisition to expand its iGaming sector presence, it rapidly shifted its stance mid-deal.
The two companies were initially pleased with the agreement. Sega Sammy hoped to leverage Stakelogic’s established European market presence and expansive portfolio of innovative online slots and live dealer products. The B2B supplier also remained optimistic regarding the deal, noting it would help its titles reach more regulated jurisdictions.
Sega Sammy attempted to withdraw from the purchase, citing “unresolved regulatory concerns.” The company referred to Stakelogic’s alleged violations of Japanese and Turkish gambling regulations. Sega Sammy claimed such breaches broke pre-completion obligations, justifying its legal right to rescind the contract. The company also contended that it needed more time to determine whether Stakelogic offered its titles in jurisdictions where online gaming is prohibited.
The Court Dismissed Most Allegations
Despite Sega Sammy’s concerns, the court rejected the company’s arguments, underlining that the SPA explicitly prohibited any form of rescission. Judge Bom emphasized that all perceived infractions could be resolved via monetary damages rather than by abandoning the deal altogether. The court also cast doubt on allegations that Stakelogic would fail to utilize geo-blocking across its products.
It is undisputed that Stakelogic is paying for geo-blocking services, so it is implausible that Stakelogic would not use these services for jurisdictions where online gambling is strictly prohibited.
Judge C.W.D. Bom
Judge Bom also pointed out that Sega Sammy’s internal testing had only accessed demo versions of the games in prohibited jurisdictions, with no indication that real-money versions were available. The court also noted that Stakelogic’s status as a B2B provider mostly insulated it from potential criminal charges, even if the regulatory concerns proved valid.
Stakelogic is not the company running the website which provided access to its games, but only a content provider.
Judge C.W.D. Bom
In a decisive final order, the court gave Sega Sammy Holdings Inc. and Sega Sammy Creation two weeks to finalize the acquisition, threatening a €10 million ($11.33 million) non-compliance penalty. The ruling paves the way for the highly anticipated completion of the deal. Despite Sega Sammy’s misgivings, the company will likely try to make the best of the situation and continue its expansion into the iGaming and digital content space.
Correction: A previous version of this story incorrectly stated that the ruling was delivered by a Swedish court. In fact, the decision was issued by the Amsterdam District Court. We are sorry.
