In an interesting development out of New Jersey on Friday, the New Jersey Division of Gaming Enforcement (DGE) has granted conditional approval to an online gaming partnership between Marina District Development Company, LLC, which is the parent company of Atlantic City’s Borgata Hotel Casino & Spa, and Pala Interactive, LLC, a venture created last summer by California’s Pala Band of Mission Indians.
According to the DGE’s approval letter, the initial term for the license is six months, after which it will be subject to possible final approval. The Borgata, in conjunction with gaming giant bwin.party, operates the Party Borgata Network, the largest online poker network in New Jersey. The network consists of two sites, BorgataPoker.com and nj.PartyPoker.com. Borgata also operates BorgataCasino.com. With the new partnership, one or more sites are expected to be added to the network.
It is not the possibility of more sites on the network that is of note here. That really is not particularly interesting. It is the partnership with Pala Interactive that is curious. There are two aspects of this deal that may end up raising some eyebrows. The first is exactly who is involved with Pala. As mentioned, the Pala Band of Mission Indians started Pala Interactive in preparation for a potential regulated internet gaming market in California. The man the tribe partnered with to create and lead the company was Jim Ryan, former CEO of PartyGaming. That would certainly explain how the Borgata and Pala Interactive made introductions; Ryan was once co-CEO of bwin.party, the same bwin.party that operates the Party Borgata network with the Borgata.
But even that isn’t really that big of a deal. People network in business and form relationships based on those connections. The thing is, before he was at PartyGaming, Jim Ryan was CEO of Excapsa, the parent company of the infamous and now dead UltimateBet. Even though he was head of Excapsa, what he actually did there is not completely known. According to some reports, his move from Excapsa to PartyGaming was in jeopardy because of a non-compete agreement he signed. After the superuser cheating scandal, Ryan allegedly got a list of ownership proxies released (the actual ownership structure of the company was VERY secretive) and allegedly had even more damning documentation related to the cheating scandal. He used this as leverage to skirt the non-compete and head over to PartyGaming. Ryan himself was never tied to any of the cheating.
The second bit of intrigue is that Phil Ivey signed to be Pala Interactive’s spokesman when the company was formed last July. This is the same Phil Ivey who is currently being sued by the Borgata for edge sorting. There have been reports that Ivey is no longer involved with Pala Interactive, but those have not been confirmed.
Also of note is that the Pala Band of Mission Indians has been very involved in trying to get intrastate online poker legislation passed in California over the last few years. One of the sticking points of potential legislation has been the presence of a “bad actor” clause, which would keep gaming operators who stayed in the U.S. market after the UIGEA out of the California arena, either forever or for a set number of years. It is thought that the main reason for such a clause is to keep the powerful PokerStars out of the market. The Pala Band has backed the bad actor clause and won’t be pleased to see PokerStars enter the New Jersey market, something that is expected to happen in the near future.