Could bwin.party be Amaya Inc.’s ticket onto US shores at last for the latter’s much-sought-after American online gaming presence?
A new bidding war for bwin could potentially offer a new route for Amaya’s seemingly endless efforts to gain entrée into the tantalizing US marketplace.
Amaya is accustomed to massive takeovers, of course, having bought both PokerStars and Full Tilt last year for a whopping $4.9 billion.
Now the owner of the world’s largest online poker networks has its eyes set on bwin.party, another Internet gaming company that besides owning World Poker Tour, offers sports betting and casino games, meaning ownership would only increase Amaya’s iGaming dominance.
And for a little icing on the cake, bwin.party also holds a Casino Service Industry Enterprise License from New Jersey’s Division of Gaming Enforcement (DGE), meaning an acquisition by Amaya could allow the Canadian-based company to finally put a foot down in the United States.
To beef up its stronghold, Amaya has teamed up with GVC Holdings, a sports and betting group headquartered in the Isle of Man, towards offering $1.7 billion for bwin.party, but that’s not the only deal on the felt. PokerStars rival 888 Holdings is also interested and confirmed its wager on the company on Monday, although at an undisclosed sum.
In a statement to investors, 888’s management says “there is significant industrial logic in a combination of 888 and bwin.party, benefiting both companies and all shareholders…”
Late last week, GVC confirmed its interest in bwin, although it hadn’t secured the joint partnership with Amaya at that time. Due to the size of bwin compared to GVC, the company said last week that, “…if the proposed transaction were to complete, it would be treated as a reverse takeover…”
Of course, once Amaya and GVC teamed up, that is no longer the case, as Reuters estimates GVC has a market value of $440 million and Amaya an even heftier $3.6 billion.
For bwin shareholders, it’s a win-win situation, as two online gaming giants square off for the company. The stock was sent skyrocketing on Monday, up nearly 10 percent during early trading on the London Stock Exchange.
State the Obvious
While there is certainly value in bwin.party’s suite of online gaming products, Amaya has made no secret that its primary focus moving forward is growing the game of online poker. After unloading many of its business-to-business assets in order to pay down the debit incurred from its enormous takeover of the two poker networks, a bwin.party bid is likely due to its licensing in New Jersey.
Whether it’s political reasons or its continuing of operations up until Black Friday in 2011, which led to PokerStars and Full Tilt being dubbed “bad actors,” the former network has repeatedly met with resistance from US lawmakers and competitors alike, with the latter worried about its potential market sweep.
In the Garden State, many, including State Senator Ray Lesniak (D-Union), believe Governor Chris Christie is keeping the site at bay due to presidential aspirations, although that’s a claim the governor adamantly denies. Lesniak, the leading advocate for online poker in the state, has frequently teased a PokerStars arrival, but nothing has yet materialized.
Should Amaya win the bidding war over 888 and takeover bwin, the company could immediately have a presence in the United States through a partnership with the Borgata Hotel Casino and partypoker rooms.
In March, Amaya CEO David Baazov told investors during an earnings call that he expects PokerStars to enter New Jersey in the next quarter, meaning sometime between April and July. Though it isn’t necessarily clear whether Amaya would be able to implement PokerStars through bwin’s licensing, it should make bringing the world’s largest online poker network to the United States that much easier.