PartyGaming Set to Enter US Market

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PartyGaming is one of the leading online gaming operators with brands like PartyCasino and PartyPoker. Watchers of the online gaming industry have for some time been saying that PartyGaming has been making all the right moves for entering the market in the United States when it is legalized and regulated. First it settled with the US Department of Justice (DoJ), paid a hefty fine and cleaned its slate. Having no legal liabilities will be one of the prime considerations for the issue of licenses in the United States. Then it entered into a merger with bwin to form the largest listed online gaming company.

However PartyGaming seemed to receive a set back when the original owners and major stakeholders Russ De Leon and Ruth Parasol refused to settle with the DoJ last week. When PartyGaming left the United States market, apart from the company the then prime stake holders De Leon, Parasol and Dikshit were individually and separately held liable for conducting illegal online gaming operations in America. Dikshit had settled and paid his fines even prior to the PartyGaming settlement. But last week’s refusal by De Leon and Parasol to settle left many industry observers wondering if this would prevent PartyGaming from receiving an American license when the time comes.

However, Jim Ryan of PartyGaming clarified that the merger agreement with bwin includes a provision that if a shareholder is in the way of the company getting a license the company could obligate the shareholder to liquidate his or her stake. He indicated that this clause was provided for especially in view of the above situation and clears the last hurdle for entering the US market. Ryan added, “Now all we need is regulation.”

Ryan points out three indicators that he feels are positive for regulated online gaming in the United States. The first is a need for revenue generation both at a government level and a land-based operator level. The second is the move by Harrah’s in entering online gambling. This has led to its competitors searching for suitable online gaming operators to tie up with. The third indicator is the acquisition of online gaming assets by GTech and their engagement with state run lotteries.

Ryan said that he was alert to the possibility that PartyGaming may not be licensed as a B2C operator. This means that PartyGaming may not be able to offer online casino and online poker services directly to American players. It is more probable that PartyGaming will appear on the American scene as a B2B or B2G player. Ryan revealed that PartyGaming had initiated talks with 12 land-based operators about possibly leveraging their brands into the online world.

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