Another US corporate interested in online poker

[jetset]

MORE BIG CORPORATE ACTION ON U.S. INTERNET POKER

Now it's MGM Resorts International and Boyd Gaming who are getting ready to enter the market with a European partner

In the United States, news breaking Tuesday in the mainstream media revealed that terrestrial casino operators MGM Resorts International and Boyd Gaming Corp. have signed an agreement to partner with bwin.party interactive's online poker operations should internet poker be legalised in the USA.

The agreement would see the three companies take a stake in a new entity that would operate online gambling under the well-established Party Poker and other brands.

In October bwins.party's co-CEO, Jim Ryan hinted at the deal when he revealed that he had been spending some time on business trips negotiating a deal with major American corporates.

On Tuesday, Ryan told the Associated Press new agency that his company, which also owns the World Poker Tour, has been hoping to return to the U.S. market, which it left in 2006 as a result of the UIGEA.

Party Gaming had an estimated half of the U.S. market at the time and took a severe knock as a result of its exit; it has subsequently cleared the legal slate with the Justice Department, paying a large settlement for its pre-UIGEA American activities..

"We have been putting in place the foundation, if you will, to re-enter the market," Ryan said, adding that the new business will build a large enough pool of players to make the business profitable.

MGM Resorts CEO Jim Murren told Associated Press that it will be important to have tough new online poker laws because companies that now offer poker online to Americans have hurt the entire gambling industry's reputation.

"Whenever there's a problem anywhere, it reflects poorly on the gaming industry, of which we are a major player," Murren said. "The federal government needs to address this. It cannot wish it away."

Ryan said he thought his company did the right thing in exiting the US, even as other operators appeared to flourish.

"Did we sit back and watch in envy and knowing full well that we (had) had 50 percent of the market at that point? Perhaps, but we never questioned our decision," he said.

In addition to setting up the new entity, there is provision in the deal for MGM Resorts and Boyd to use bwin.party software to run online poker sites under their own brands.

Boyd CEO Keith Smith told AP he thinks it's important for the companies to be able to move quickly if the law changes, enabling them to access a market that has been estimated at $6 billion in value.

Bwin.party is licensed in France and Italy and is pursuing online gambling licenses in Spain and Denmark, Ryan revealed.

[jetset]

BWIN.PARTY DIGITAL EXPANDS ON U.S. ONLINE POKER DEAL (Update)

More detail on agreement with MGM and Boyd

Bwin.party digital expanded Wednesday on its internet poker agreement with US corporates MGM International Resorts and Boyd Gaming (see previous InfoPowa report), saying the deal was central to bwin.party's strategy for entering the US market, subject to appropriate US legislation being passed.

"While there is no certainty that online poker legislation will be enacted in the US, bwin.party is preparing to enter into a preliminary suitability review in the State of Nevada," the announcement notes.

The agreements with MGM and Boyd are subject to enabling legislation and regulatory approval and include the following elements:

1. Business-To-Consumer (‘B2C’) Joint Venture

In the event that suitable federal legislation for online poker is enacted in the US, bwin.party, MGM and Boyd will form a jointly-owned US-based company (‘Federal NewCo’) with bwin.party owning 65 percent, MGM owning 25 percent and Boyd owning 10 percent. MGM and Boyd will have representation on the Federal NewCo board. The funding required by Federal NewCo will be met by bwin.party, MGM and Boyd pro-rata with their respective shareholdings.

bwin.party will supply Federal NewCo with its primary online poker brands for use in the US - including PartyPoker and World Poker Tour. bwin.party will also supply a poker platform and all other required support services. The platform will offer players a safe, secure and fair gaming environment and will address problem and underage gambling as well as protect against other activities such as money laundering.

Should the US regulate online poker on a state-by-state basis, a stand-alone company will be established to develop each state opportunity (‘State NewCo’). The shareholders and shareholdings in a State NewCo may vary, depending on the state concerned and reflecting the contributions to be made by each shareholder. In addition to bwin.party, shareholders in a State Newco may include MGM, Boyd and other partners.

2. Business-to-Business (‘B2B’) Agreements

Bwin.party will also enter into two separate, 15-year business-to-business agreements with MGM and Boyd that will enable them to offer real money online poker services under their own brands in the US using the bwin.party technology platform and associated services. Under the terms of these agreements both MGM and Boyd are exclusive to bwin.party and the Bwin.party will receive a share of the online poker revenue generated by those services.

3. Preliminary Suitability Review

Bwin.party is preparing to enter into a preliminary suitability review with the Nevada Gaming Control Board in order to secure an advanced finding of suitability in anticipation of future US-facing real money poker opportunities.

Commenting on today’s announcement, Jim Ryan and Norbert Teufelberger, the Co-CEOs of bwin.party, said:

“Our strategy has been designed to address any and all legislative outcomes, whether federal or state-by-state. We are particularly excited to be working with MGM and Boyd. Combining their significant assets and regulatory expertise with the strength of our PartyPoker and World Poker Tour brands, all supported by our in-house technology, makes us perfectly positioned for any future opening of the US online poker market.”

Jim Murren, Chairman and CEO of MGM Resorts International, said:

"MGM has long been supportive of Federal legislation to strengthen UIGEA and provide the needed regulations and consumer protections for online poker. 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.”

Keith Smith, President and CEO of Boyd Gaming, said:

“We believe the right approach to offering legal online poker in the United States is through a federal regulatory structure that ensures the games are conducted with the greatest possible integrity and security. Should Congress enact legislation to legalise Internet poker, this agreement will allow us to partner with the world’s most experienced and prestigious online operator to offer a secure, fair and entertaining experience for players in the United States.”

[pokeraddict]

This reminds me of the deals before Black Friday that died. I guess nobody wants to get left out. MGM and Boyd are already playing from behind, having to compete with WSOP which is already an established online poker room with the biggest brand name in the poker world. This should be interesting as it plays out.