It was announced this week that two of the major casino operations in the United States will join forces with the largest online gaming operation – if and/or when the United States can clarify its murky online gaming laws.
On Monday, MGM Resorts International and Boyd Gaming Corporation agreed to partner with the largest online gaming operation in the industry, Bwin.Party Digital Entertainment, for a future online poker operation that will be owned by the three entities. Surprisingly, the breakdown of ownership is very much in favor of Bwin.Party; MGM Resorts would own 25% of the operation, Boyd Gaming 10% and the rest would be owned by Bwin.Party. The deal is contingent on clarification of online gaming laws in the U. S., however.
According to Bloomberg BusinessWeek, the Vegas casino operations are looking to hit the ground running when potential legislation is passed. “We know that millions of Americans are gambling online (and) we know that they’re gambling billions of dollars,” MGM Resorts Chief Executive Officer Jim Murren is quoted by Bloomberg. Jim Ryan, the Chief Executive Officer of Bwin.Party, echoed those sentiments in also stating to Bloomberg, “It’s all about preparing for the eventual opening of the market.”
The potential operation of the conglomerate offers something for everyone. By using the Bwin.Party technologies and software, MGM and Boyd Gaming will have a proven gaming platform that will allow them to quickly enter into a potential U. S. online poker industry. In addition to the platform, there would be a “brand recognition” that would make the potential online sites immediately viable. For Bwin.Party, it will allow them to once again enter into the U. S. market, which the company sacrificed after the passage of the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006.
Back in 2006, the then-PartyGaming decided to prohibit U. S. players from playing on the site. If they had allowed American action, they would have jeopardized their status on the London Stock Exchange. Bwin also prohibited action around the same time and for the same reasons.
The deal is a natural for MGM and Bwin.Party. Bwin.Party, as the owners of the World Poker Tour, and respective properties of MGM Resorts have long been partners in the live tournament poker world with the WPT. Although some may question the inclusion of Boyd Gaming, it is expected that they will bring liquid capital to the table for any particular startup costs.
Even with this deal in place, there are still hurdles to overcome. First off, there are no online poker regulations in place to allow for the companies to put their wares on the market. Since the shutdown of a significant majority of online poker operations with the U. S. Department of Justice’s “Black Friday” indictments, there has been movement – albeit glacial – towards potential legislation.
In October, a hearing in the House of Representatives examined the online gaming issue in its entirety, but there was an extreme focus on online poker. The hearing, entitled “Internet Gaming: Is There A Safe Bet?” was led by Chairman Mary Bono-Mack and featured the legislation of committee member Representative Joe Barton. The Texas Republican’s “Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2011” was a topic of conversation throughout the hearings and is currently the only online gaming legislation in front of either branch of Congress.
The hearings were deemed an overall success, but there has been no further action on the bill in Representative Bono-Mack’s committee or in any other House or Senate committee. Potential legislation may face an uphill battle in the House, with anti-gambling advocates Spencer Bachus and Eric Cantor promising to block such attempts at a legislative vote.
Secondly, although Bwin.Party has apparently been cleared of any potential wrongdoing with the federal government (as a part of a non-prosecution agreement, PartyGaming paid the U. S. Government $105 million in 2009), there could be licensing issues. At the moment, there is no jurisdiction that has any regulation in place, although the state of Nevada is looking to rectify that. With no rules in place, it is unknown how licensing of a potential MGM/Boyd/Bwin.Party would be achieved or what potential pitfalls may be faced.
Overall, the proposed deal is promising in that it will bring together some of the biggest players in the “brick and mortar” casino world with a major player in the online gaming world to provide a safe, viable online poker product to Americans. It just may be some time before the deal can actually come to fruition.
