As noted many times in iBC Financial News, the recent federal raids on offshore online poker sites is likely to wind up being nothing more than a Godfather, Part II-esque ploy on the part of Steve Wynn and the Vegas tycoons to legalize and regulate it in America (with them running the show).
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With billionaires and casino companies rushing to get ready for the potential of regulated online gambling in America, MGM Resorts on Monday announced an online poker alliance with Bwin.party digital entertainment, which owns PartyPoker, the second-biggest online poker service in the world, and the World Poker Tour.
“MGM is proud to have bwin.party as our partner as they have the assets and experience that, combined with our brands, can ensure a secure, fair and entertaining online poker experience,” Jim Murren, chief of MGM Resorts, said in a statement.
The MGM deal, which is contingent on a regulatory regime being established for online poker on either the federal or state level, helps define the competitive landscape as casino companies get ready to enter the online gambling business in the U.S. Boyd Gaming also announced on Monday that it has entered into an online poker alliance with Bwin.party.
According to Jim Ryan, co-chief executive of Bwin.party, the two announcements are related and have been in the works for nearly 18 months. Bwin.party will form a joint venture with MGM and Boyd to offer online poker in regulated U.S. jurisdictions. Bwin.party is slated to own 65% of the proposed joint venture, while MGM will own 25% and Boyd will own 10%. In addition, the deals call for Bwin.party to license its technology to both MGM and Boyd, which also plan to offer online poker under their brands.
“The intention of the joint venture is to take the PartyPoker brand and the World Poker Tour brand and our operating expertise and combine that with the regulatory expertise of MGM and Boyd,” Ryan said in an interview. “Effectively you will have four brands in the U.S. and all four brands will be acquiring players and putting them in one hub, one poker network.”
Bwin.party’s PartyPoker was the biggest online poker platform in the world until Congress passed the Unlawful Internet Gambling Enforcement Act in 2006, which caused the company to exit the U.S. market and lose its dominant market share. The deals with MGM and Boyd mark the formal return of Bwin.party to the U.S. Ryan, who is based in Gibraltar, has spent a lot of time recently in the U.S.preparing for Monday’s announcement.
Notably, the announced deals only cover online poker, even though Bwin.party has strong online casino offerings. “We see no evidence that a state or federal body is prepared to legislate anything other than poker,” says Ryan.
The U.S. online poker market has long been the world’s biggest, but for years it has operated in the shadows of the law and a disapproving Department of Justice. Prominent U.S. billionaires and casino companies stayed out of the business, leaving its riches for offshore companies like PokerStars and Full Tilt Poker. But now the casino industry is strongly pushing to get online poker regulation through Congress and lawmakers in states like Nevada and New Jersey are also trying to get something done. It is widely believed that first-mover advantage will be key in seizing the Internet if and when online gambling gets regulated, leading to a mad mobilization.
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