Nearly six years after creating the All American Poker Network in a joint venture with Avenue Capital Group, 888 Holdings has acquired Avenue Capital’s 53 percent share of the network for $28 million. The transaction gives 888 Holdings complete ownership of the online poker network.
In press release last week, 888’s Chief Executive Officer Itai Frieberger said of the deal:
The acquisition of the remaining stake in AAPN is an important strategic step towards 888 achieving its exciting long-term potential in the US. Taking outright ownership of AAPN gives 888 additional operational, technological and commercial flexibility to develop innovative and exciting new partnerships and launch in new states – through both B2B and B2C channels – as and when future regulation allows. This acquisition places 888 in an even better position to take advantage of the significant growth opportunities in the US and create additional value for our shareholders.
The AAPN joint venture has been a very successful endeavour for the Group. It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years whilst also investing in other global regulated markets. I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.
When Frieberger says “long-term potential,” he really means long-term. The All American Poker Network was formed in March 2013, before Nevada became the first state to legalize and regulate online poker. 888 Holdings and Avenue Capital clearly had the vision of an expansive poker network spanning the United States because, after all, online poker was about to explode.
Thing is, online poker has not exploded in the U.S. In five-plus years, just three states have active online poker industries: Nevada, Delaware, and New Jersey. Pennsylvania has legalized online poker but has yet to flip the switch. The populations of Nevada and Delaware are so small that they really don’t make much of an impact and while things have been going fine in New Jersey, poker is dwarfed by the popularity and revenue generation of online casinos and, very recently, sports books.
The All American Poker Network does exist, though, even if barely anybody has actually heard of its name. There is just one active online poker room in Nevada, WSOP.com, which runs 888’s software. Delaware has three online poker rooms, all linked to racetracks, and all of which also use 888’s software. Nevada and Delaware have shared poker liquidity for a few years. New Jersey joined them earlier this year, with WSOP.com and 888poker both using 888’s software and integrating into the cross-country network. This is the only interstate network in the U.S. right now, as might be obvious considering no other operators are in Nevada or Delaware.
It is fully expected that the network will expand into Pennsylvania (via Harrah’s), but there is no timeline set for player pool sharing with the Keystone State. Pennsylvania will also present the first opportunity for other operators to establish interstate networks, as there will be some overlap with New Jersey.
Treasure Island Resort & Casino had actually signed on to have the first online poker room on AAPN back in 2013, but that never came to fruition.