Fortune Magazine on US Online GamblingBy: Joan Peppin, Wednesday November 2nd 2011
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Richard Bronson, a former Mirage Resorts executive, has now founded US Digital Gaming. Bronson is of the firm belief that online gambling would be ultimately legalized and regulated in the United States. He foresees a market for software and advertising services to online gaming operators and this is what his company will provide. Because of the sustained interest in the legalization of online gambling, particularly poker, in the United States, Fortune magazine did an article on how the business possibilities of online gambling have captured the imaginations of billionaire US businessmen. They interviewed Bronson to find out what he had to say.
Bronson said that several rich and savvy billionaires were willing to invest in his new business. Bronson told Fortune, "Not one of them thinks this will be a sprint, they think it will be a marathon." The names revealed by Bronson included real estate guru Steven Roth, shopping mall magnate Herbert Simon and wealthy heirs Robert and William Taubman. None of these are directly linked to the gambling industry.
The Fortune magazine article pointed out that first-mover advantage is perceived as being critical. That is the reason why US billionaires are prepared to invest even though online gambling is far from signed, sealed and delivered. Fortune listed several initiatives that are already in the public domain. Among the most recent is the collaboration announced by Donald Trump and billionaire hedge fund mogul Marc Lasry of the $12 billion Avenue Capital Group.
It also mentions the Fertitta Interactive agreement signed last week with Cyberarts. Fertitta Interactive is owned by Station Casino group billionaires Lorenzo and Frank Fertitta. Fertitta had earlier aligned with Full Tilt Poker, but had called off the agreement after the Black Friday indictments. Steve Wynn had annulled a similar deal with PokerStars for the same reason. However Wynn has not revealed any replacement.
The Fortune magazine article also refers to Caesars Entertainment. In 2008 Caesars Entertainment, then known as Harrah's, was acquired by private equity firm Apollo Global Management and TPG in a $30 billion leveraged buyout. Apollo is run by billionaires Leon Black, Joshua Harris and Marc Rowan and TPG is owned by billionaire David Bonderman. Caesars Entertainment has been investing heavily in its online operations and backing a new Washington D.C. lobbying effort that includes former FBI Director Louis Freeh. The article concludes, "If online gambling in the USA opens for business, it would certainly help Black and Bonderman, two investing legends, get out of a tough spot."
With so much money being pumped into online gambling, surely it is a case of when and not if for legalization of online gambling in the United States.
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