U.K-based online gaming company 888 Holdings is looking into applying for an online poker license in Nevada, according to a report on Bloomberg.com. In the process, they are also discussing a partnership with Caesars Entertainment Corp, parent company of Harrah’s, Caesars, Rio, Flamingo, and the World Series of Poker, amongst other assets.
888 Holdings Deputy Chairman Brian Mattingley told Bloomberg that his company is in “advanced talks” with Caesars and would make a decision about applying for an internet poker license by “mid-autumn.” “We would love to do it with them,” he said.
In May, the Nevada Senate Judiciary Committee passed Assembly Bill 258, which would allow the Nevada Gaming Commission to both establish a regulatory framework for online poker and grant licenses to casinos looking to launch online poker games. The regulations were not actually laid out in the bill; it simply authorized the Gaming Commission to establish those regulations and issue licenses if the federal government legalizes online poker or if the U.S. Department of Justice says, in writing, that interactive gaming is permissible under federal law.
Thus, even if 888 and Caesars do ink the final signatures on a partnership, there is no guarantee that they would ever be able to launch online poker in the United States, let alone any time soon.
While 888 Holdings, parent company of 888Poker.com (formerly Pacific Poker), has enough cash to fund a future expansion into the United States, it still may consider debt financing if the terms are attractive. “It’s just we don’t want to miss no-brainer opportunities as they arise,” said Mattingley.
It is actually entirely possible that 888 would not even need to partner with Caesars or any other land-based U.S. casino company, as there is a clause in the Nevada bill which leaves open the opportunity for off-shore firms to receive licenses. It reads, “The Commission may issue a license to operate interactive gaming to an applicant that meets any qualifications established by federal law regulating the licensure of interactive gaming.”
Of course, this means that federal legislation would have to allow off-shore companies access to the U.S. market. So, while possible, it is unlikely, at least at first. Bills that have been introduced on the federal level seem to restricted eligible companies to those based in the United States, with off-shore companies having to wait at least a couple years before applying for licenses.
In the meantime, 888 reported a “stellar” second quarter of 2011, showing 29 percent growth, or $79 million, from the same quarter last year. Poker was the star, jumping $13 million, which is a 58 percent increase from Q2 2010. The company credits its new Poker 6 platform with much of the increase, helping it add 231,000 active customers in the quarter, a whopping 90 percent leap from the same time last year.
Said Mattingley, “Since the launch of Poker 6 we have outperformed the industry, while we have also benefited from the Full Tilt [shutdown] and doubled our customer recruitment, now enjoying sixth position in the global liquidity rankings.”