GVC Bwin.Party Deal Could Stir the Pot for Borgata in Atlantic City
Posted on: February 3, 2016, 03:54h.
Last updated on: February 3, 2016, 03:54h.
GVC Holding’s $1.6 billion takeover of bwin.party was completed on February 1st, as expected, and shares in the newly formed company began trading on the London Stock Exchange the very next day, under the ‘GVC’ ticker symbol.
The enlarged group is tipped for further growth, as its increased scale and millions in projected cost savings will allow it to weather the storm of increased regulation and taxation in Europe. But where does the deal leave bwin.party’s partner in New Jersey, the Borgata casino?
Borgata teamed up with bwin.party in 2013, the year that New Jersey opted to legalize and regulate online gaming. In accordance with the brand new remote gaming laws, operators were required to partner with an existing casino licensee in the state.
Since then, Party-Borgata has been almost exclusively the leader of the small, fledgling online gambling market coming out of Atlantic City.
But new-entrant-to-the-game GVC does not hold a New Jersey remote gambling license.
License to Grill
Just three days before the takeover was finalized, GVC petitioned the New Jersey Division of Gaming Enforcement (DGE) to allow partypoker to continue to operate under the Borgata banner, while its own application for a license is considered.
This was duly granted by DGE director David Rebuck, under the proviso that GVC should have no “operational or management control or influence” over the online poker site in the interim.
But how long is “the interim”? The DGE is one of the strictest regulators in the world, and each licensing application goes through an exhaustive vetting process. Amaya’s licensing, for example, took well over a year to be granted, while the regulator conducted sworn interviews with more than 70 individuals and visited around a half dozen international jurisdictions as part of its investigation.
Amaya’s circumstances were very different, of course. Isai Schienberg, the former owner of PokerStars, had been indicted by the Department of Justice in 2011 for money laundering conspiracy and violating UIGEA, while more recently, Amaya itself was under investigation by the Canadian financial regulator over suspected securities fraud surrounding its purchase of PokerStars.
Amaya was cleared of regulatory wrongdoing and got its license, but was ordered by the DGE to fire four of the executives with links to the old guard as a condition.
Borgata’s Plan B
It seems that Borgata thinks there is at least a chance that GVC will be refused a license. Late last week, unnamed sources told eGaming Review that the casino’s management is “rethinking” its relationship with partypoker and has drawn up a “Plan B.”
GVC has a significant presence in both grey and black markets around the world, in particular through its subsidiary, SportingBet, a fact that will not sit comfortably with the DGE.
But maybe Borgata is just reassessing its options. After all, PokerStars’ impending entrance to the New Jersey market is a huge threat to Borgata and is likely to steal away many of its players.
Could it be that the casino is looking for a way out so it can defect to PokerStars, the likely market leader of the future?
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