Blackstone-owned Cirsa International is seemingly set to enter the Italian online market via an acquisition, but the company it apparently wants to buy could be stripped of its licence in July.
Spain-based Cirsa International Business Corporation, owned by US investment giant Blackstone, is to purchase e-play24, a major presence in Italy’s online betting market, according to a bulletin published by Italy’s Market Competition Authority (AGCM).
In its assessment, the competition watchdog said the acquisition poses no threat to the structure of the Italian market and the parties have been given the go-ahead to execute a share purchase agreement signed on February 14, 2022.
The deal is now undergoing a mandatory examination by gambling regulator ADM.
However, e-play24 is already under intense scrutiny by the regulator and is set to argue in a July on whether it should be stripped of its licence over illegal betting practices.
The operator has quickly grown in the Italian market, reaching a 5.4 percent market share in betting, 3.3 percent in online casino and 8.5 percent in poker, in part due to its strategy of licensing a large number of so-called “retail online top-up agents”, also known as PVRs.
The company also owns at least 40 gambling affiliates and operates branded platforms for the likes of national TV network Sportitalia.
ADM has been investigating e-play24 since last year. Documents filed in an administrative trial and seen by VIXIO GamblingCompliance claim that in four cases in different Italian regions, inspectors found e-play24 dealers working as brokers for clients by placing bets through their online accounts on behalf of customers.
In late 2021, ADM issued a decree of forfeiture and revocation against e-play24’s online gambling concession.
The company appealed the decree in front of the administrative court in Rome and, in January of this year, the court suspended the licence revocation, but put e-play24 on notice that it would have to argue its case in a public hearing on July 13.
“E-play24 has been shown to have taken no measure in order to control its commercial partners. The control system is completely absent and ineffective,” wrote the state legal office in its case before the administrative court.
ADM also cited a connection to the “Apate Operation” carried out by prosecutors in Catania that connected e-play24 to illegal betting operations.
The PVR betting shops were operated by agents under the brand “Redstore” and Catania prosecutors allege that “the concessionaire (e-play24) was used as ‘cover’ by the agents” engaged in illegal practices.
“The e-play24 betting management is part of a structured system to get around Italian law. It allows the dealers connected to the online concessionaire to manage the illegal betting business,” said prosecutors.
The head of the illegal organisation targeted by the Apate crackdown, Antonio Padovani, was sentenced to six years and six months in prison last week.
Both ADM and e-play24 declined to comment for this article.