Bwin.party Announces US Partners

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Last month Bwin.party co-Chief Executive Officer Jim Ryan had said that they were discussing with potential partners for the U.S. online gambling market, but had refused to mention names. Now the announcement has come from the American partners themselves.

On October 31 Boyd Gaming Corporation and MGM Resorts International announced that they will team up with European online gaming giant Bwin.party to create online poker websites for American gamblers. This is contingent to the legalization and regulation of online poker in the United States. According to the agreement, Bwin.party, Boyd Gaming and MGM Resorts would jointly own an online gaming company that would offer online poker to U.S. customers under Bwin.party's brands like Party Poker. Bwin.party would own 65% of the company, MGM Resorts would own 25% and Boyd would own 10%. Boyd Gaming and MGM Resorts have separate agreements that allow them to offer their own online gaming poker rooms with their brands through Bwin.party's technology and gaming platforms. The big agreement would give Bwin.party access to American online gambling market as soon as legalization occurs. This market has been estimated at between $3 billion and $5 billion annually. Bill Lerner of the Union Gaming Group has opined that this joint venture could grab more than 20% of the market.

Jim Ryan said, "These arrangements have been put in place to prepare ourselves for the next step. Ultimately, we see a number of MGM and Boyd and Bwin.party websites all acquiring players. We're laying a foundation for a very important milestone." Brian Balsbaugh, a Las Vegas-based poker player agent, said that this agreement will make Ryan the most powerful person in poker.

Boyd Gaming CEO Keith Smith said that the individual sites of the stake holders will complement each other because together they will increase the liquidity. Both Smith and MGM Resorts Chairman Jim Murren said Bwin.party was a logical partner because of its success and stature in the regulated markets in Europe. Smith said, "As we narrowed down who we wanted to do business with, compliance was an important part. For our company, integrity is very important."

Murren said that online gambling is the logical step for the bricks and mortar casinos. He felt that operating a traditional casino should be a prerequisite for getting an online casino license in the U.S. It would demonstrate that the venture is backed by a tremendous amount of investment and would eliminate fly by night operators. Smith and Murren would not speculate on when online gambling would be legalized in the United States. However, Deutsche Bank gaming analyst Carlo Santarelli was more forthcoming. He gave a 50% chance to online poker being legalized in the next year. He added, "The announcements position Boyd and MGM Resorts nicely should federal legalization eventually pass."

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