and bwin merge to become bwin.party digital entertainment;
Eyes on U.S, by Greg Tingle - 4th April 2011
became the worlds biggest listed online gambling
company on Thursday.
are keen to enter the U.S market, but how long will
it take them? US competitors are also making political
and media noise, but the question begs... who is in
the best position at the moment, and who will get
the first significant deals in place to deliver true
wins - wins... for the online gaming company, land
based casino, and the players.
digital entertainment traded on the London Stock Exchange
following the merger of Bwin,
the Austria-based sportsbook giant, and Gibraltar
looking to once again return to its former position
as number one online poker firm (players) in the world.
It's going to be wait and see as to where bwin.party
settle on the FTSE 100, but many experts are expecting
them to do very well.
merger was talked about for almost three years, but
only now is it a reality.
was a rollercoaster," says Jim Ryan, PartyGaming
chief executive who shares the top in bwin.party with
bwins Norbert Teufelberger. "(there were)
issues to do with valuation, issues to do with structure."
firms were "industry dinosaurs" say Teufelberger,
with multitude of strengths and weaknesses. PartyGaming
had poker, better cost control and more ties to the
United States, where it actually dominated until the
US legal crackdown back in 2006 which forced out several
European operators. Bwin had sports betting, brand-building
smarts, strong sports sponsorship deals and knew all
of the European markets better than Party.
of the key goals of the merger was to create scale
to compete more effectively. Media and gaming analysts
forecast 2011 revenues of the new entity at €841m
($1.2bn, £739m). The firm, which will yield
€55m in synergies, advised pro forma earnings
before interest, tax, depreciation and amortisation
for 2010 were €171m. That's a far cry below the
€196m forecast last year, after Bwin last week
reported a 77% dip in earnings before tax and interest
because of merger-related technology expenses.
on the European stage, that Bwin.party are about two
to three times bigger than its nearest listed online
rivals: William Hill and Ladbrokes.
has found competition from private operators from
PokerStars and Full Tilt, both of who have very mixed
reputations with players. Party does not have that
problem, and players are a big part of the key to
success. The competitors have pretty much dominated
the unregulated US poker market since PartyGaming
left the region, have also taken a chuck of the market
in the regulated European territories.
merging poker liquidities... i.e. combining the number
of poker players and the amounts staked, Ryan aims
to insulate better its PartyPoker
brand from PokerStars and Full Tilts position
on Europe. Party also has the established World
Poker Tour brand, with strong media tie ins and
a U.S ace in the hole with legalities, since it charges
a subscription model to play.
said "I dont know that theres any
competitor out there who has a scale to attack and
be successful in each of those markets over the course
of the next couple of years. This is what this merger
does for us."
expects to be at the forefront as European markets
are liberalised. But it is to the US that many eyes
in the sector are watching. US politicians at federal
and state level have drawn up draft bills for the
long-awaited regulation of online gambling.
has contributed ideas on tax models for the US and
is talking to the entities that run American football,
baseball and basketball, most longstanding opponents
of sports betting. Many analysts believe any online
gambling legislation will be weighted in favour of
US operators. European entities best hope would
be to form joint ventures with US companies to capture
a slice of the US market. Many news reports last month
said Party did get b2b deals in place with a number
of U.S land based casinos, but its understood that
this has not been proven at this stage.
companies are already positioning themselves. Wynn
Resorts, the Las Vegas casino operator, and PokerStars
last week announced a "strategic relationship",
a move that some analysts say could make it more difficult
for European operators to gain noticeable US market
share. Having said that, PokerStars has a very mixed
reputation, so Party might have a few aces up its
sleeve, and knowing them, they do.
on Thursday hinted that Full Tilt was due to announce
a partnership with the owners of Station Casinos.
Full Tilt has also have a number of allegations leveled
against them like poker robots, unfair systems, late
or non payers, and so it goes on. Party doesn't have
the same heat on them.
interprets the recent online casino talks with U.S
land based casinos as a positive catalyst for regulation
across America - not a threat to Bwin.partys
writer has conducted b2b with a number of the companies
featured in the article.