Digital Entertainment Betting On United States, by
Greg Tingle - 20th Oct 2011
Ryan, the co-chief executive of Bwin.Party Digital
Entertainment is a very busy man.
fact, he's invested three of the past five weeks in
the United States pushing a presentation that advertised
to investors the strengths of the worlds largest
publicly-traded online gambling - gaming firm. Ryans
presentation included a one-page chart that listed
the top online poker brands in the U.S. market. The
names of once fierce competitors PokerStars and Full
Tilt Poker, were crossed out in red. Is Party the
only real game left in town? Time will tell.
you see the red lines, those organizations have been
indicted, so although one cant predict the future,
its unlikely you will see those brands back
in the U.S., Ryan said during an interview.
The brand that has the most consumer awareness
is in fact the PartyPoker
company happens to own both PartyPoker
and the World
Poker Tour, two of the top online poker brands
that did not have their U.S. operations shut down
by the U.S. Justice Department in April because they
were not facilitating for-money online poker play
in Americain the case of PartyPoker since 2006.
They also own PartyCasino,
a top online casino destination website. The fact
that Ryan, who is based in Gibraltar, has recently
been spending so much time in the U.S. demonstrates
he is optimistic and hopeful for a U.S. comeback.
My focus is on the U.S., says Ryan, who
is in the final stages of negotiating partnerships
with two U.S. companies. Even though there is
no guarantee that online gaming will ever regulate
in the U.S.
years Ryan and his staff at PartyGaming, which merged
with Bwin earlier this year, had to sit on the sidelines,
watching how much money PokerStars and Full Tilt Poker
were snatching. It was a difficult thing to watch
for the top brass and workers at PartyGaming, which
was the biggest online gambling company in the world
thanks to its domination of the U.S. online poker
market until Congress passed the Unlawful Internet
Gambling Enforcement Act in 2006. PartyGaming exited
the U.S. market and saw its stock price take a massive
hit, while PokerStars and Full Tilt kept their U.S.
facing .com websites on air. Party competitors enjoyed
somewhat of an unfair advantage, with the rouges using
the U.S. market to expand globally at PartyGamings
expense. We were beyond the point of frustration,
PartyGaming struck a non-prosecution agreement with
the U.S. Attorney in Manhattan, paying $105 million
and admitting its U.S. operations had for years violated
U.S. law. Meanwhile, PokerStars and Full Tilt continued
to operate in the U.S. and claimed that their U.S.
operations did not violate U.S. law, pointing to legal
opinions the companies had received from top American
legal eagles. To many, it appeared like PartyGaming
had given a lucrative business away. Even at the companys
headquarters there were doubts until April 2011, when
federal prosecutors in Manhattan closed down the U.S.
operations of PokerStars and Full Tilt, naming them
illegal gambling businesses, and indicted some of
their key execs. "I think Party has been vindicated
now in getting out when they did and in dealing with
the Department of Justice," says Behnam Dayanim,
a partner at Axinn Veltrop & Harkrider, who negotiated
PartyGamings agreement with federal prosecutors
in downtown Manhattan.
all that said, Bwin.Party Digital Entertainment is
not exactly holding a management party quite yet.
It's so close, yet so far, from reclaiming online
pokers crown. Operating in highly-regulated
and taxed European markets while competing against
well-run companies like PokerStars is not for the
faint-hearted. Bwin.Partys stock, which trades
on the prestigious London Stock Exchange, has dipped
by 50% in 2011. Big corporate mergers can be problematic,
but the outfit has also suffered a setback in Germany,
where the nations top civil court recently decided
to uphold an online gambling ban, and been dissed
by higher gaming duties across Europe. When the company
attempted to take advantage of the April U.S. shutdown
of PokerStars and Full Tilt, Bwin.Party found that
while some new European players were attracted to
its poker brands, revenues remained flat-ish. It wasnt
until Full Tilts European regulator suspended
Full Tilts license in late June that Bwin.Partys
increased advertising and promotional expenditures
started to pay dividends. PartyPoker
is now the second-biggest online poker room in the
world, according to PokerScout, averaging 4,150 cash
players during any given time. PokerStars has 22,800.
who joined PartyGaming as CEO in 2008, has been waiting
for this moment for what seems like forever. He long
ago took Bwins Norbert Teufelberger to a McDonalds
in La Linea, Spain, and chatted to him at length about
the pros of combining Bwins strong online sportsbook
business with PartyGamings poker brands, resulting
in the merger that was first announced in 2010. Ryan
also fine-tuned his companys business-to-business
capabilities over the last few years with an eye toward
finding a U.S. partner with whom he can re-conquer
America. "We had to be realistic about where
we sat in the food chain," says Ryan. "We
figured if the U.S. regulated it would be unlikely
that we would secure a license directly, that the
laws of the land would be written to allow existing
land operators and equipment manufacturers in the
U.S. to secure the licenses." Ryan is optimistic
about current efforts in Washington, driven by the
American Gaming Association and powerful casino companies
like Caesars Entertainment and MGM Resorts, to potentially
get some sort of online gambling legislation through
a divided Congress. Ryan notes he is also preparing
for the possibility that online poker gets regulated
first on a state-by-state basis.
have to be ready for both federal or state,"
he says. "It feels good to have American taxpaying
companies finally driving this.".
an offshore operator is to succeed in American, Bwin.Party
Digital Entertainment looks like the firm to place
has identified Australia and New Zealand as places
to further expand their business, even sponsoring
high profile poker players such as Tony G and Stewart
Scott (a former Crown Casino 'Aussie Millions' champion.)
is one of a number of rumoured brands set to take
over the sponsorship spot at James Packer's Crown
Casino that FTP once enjoyed. Party look to have as
much chance as anyone, probably more so.
the meantime, poker
game players in regions such as Australia, New Zealand,
Canada, Italy, South America, South Africa and beyond
can continue to enjoy their gaming.
playing celebs such as Leonardo DiCaprio, Matt Damon
and Tobey McGuire are understood to be open to sponsorship
approaches from Bwin.Party.
of the world - you're throw of the dice.
Man and Casino News Media do have a b2b relationship
with Bwin.Party Digital Entertainment, as they do
with dozens of other companies in the gaming and igaming