According to multiple reports, the largest online gaming company in the industry, bwin.Party, is reportedly entertaining an offer for a takeover of the company to one of the most powerful entities in the internet game.
Writer Geoff Foster of the Daily Mail reported that bwin.Party, which has seen its stock price slowly slide downward over the past few years, is being eyed by Google for a potential takeover. The rumored price of the takeover, 200p (pence) per share, would be nearly twice the price of what bwin.Party shares are currently running for on the London Stock Exchange. The deal discussions are very fluent at this time, but Foster notes that it could be completed before the end of the year.
So what is causing this rush by Google to purchase bwin.Party? It is the development of online gaming in the United States, currently in a state-by-state format. Three states (Nevada, New Jersey and Delaware) have already passed legislation and other states are potentially stepping up to the plate, leading Google to believe that it may be time to get in the online gaming industry with the purchase of an outlet.
By beginning the proceedings now, Google would be looking to pick up bwin.Party before some of its contracts with American casinos for intrastate gaming kick into effect. In New Jersey, bwin.Party has already signed a deal to team with the Borgata and Boyd Gaming to provide their gaming software. In Nevada, Boyd Gaming and bwin.Party are believed to be partners for online poker, but no action has been taken as of yet by the companies to enter into that market.
Along with looking at bwin.Party, Foster also notes that Google could be eyeing another online company if things don’t work out. The British company William Hill, which has a sizeable presence in Europe but, to this point, no outlet in the United States, has been rumored to be another possibility for acquisition by Google.
This isn’t the first time that bwin.Party has been rumored to be bought by an American company. In 2011, bwin.Party was allegedly the target for purchase by Wynn Resorts. Back then the price per share was set at 170p, but the deal never came to fruition because of the ambiguity in gaming laws in the United States.
The history of bwin.Party dates back to the early days of online gaming and poker. Both companies were powerful players in the European market prior to 2006 and Party Gaming, at that time, was the preeminent player in the unregulated U. S. market. Following the passage of the Unlawful Internet Gaming Enforcement Act of 2006, both companies withdrew from the American market and concentrated their efforts on Europe.
In 2009, the companies merged to create the largest online gaming company in the industry. After their merger was completed, the newly created bwin.Party stock traded at 192.1p; since that time, however, the stock has slowly slipped down the LSE, finishing off trading on Friday afternoon at 115p per share.
If the deal is to come to fruition, it wouldn’t be the first time that a foreign gaming company has joined forces with a U. S. company for gaming operations. In 2009, Betfair purchased the TVG Network, the horse racing cable television station, and also branded its name on several horse racing tracks around the U. S. Earlier this year, Betfair also entered into an agreement with NJBets, the only horse racing betting site legal to New Jersey residents.
The prospective deal between Google and bwin.Party would have a seismic effect regarding online gaming and poker in the United States. Google would more than likely relax their guidelines regarding online gaming and poker promotion, while bwin.Party would benefit from the deep pockets of Google to improve their current offerings (a recent PartyPoker software update was not received well by customers). It could also provide in New Jersey a powerful opponent to the prospective PokerStars/Resorts International teaming that many are anticipating by the end of the year.