American casino equipment manufacturer Shuffle Master is expected to purchase the Ongame Network from online gaming giant bwin.party, according to a report by the UK’s The Sunday Times. The move is likely being made by Shuffle Master as a way to position itself when and if online poker is legalized and regulated in the United States.
The Ongame Network has been on the auction block for a year, a casualty of bwin’s merger with Party Gaming last March 31st. The network was purchased back in 2005 by bwin for £474 million, but that was pre-UIGEA and pre-Black Friday, two dark days in online poker history that have significantly changed the valuation of Ongame. Now, the deal with Shuffle Master looks to be for a mere £13 million ($20 million). Prior to the completion of the bwin/Party union, a bwin spokesperson said that the Ongame Network was considered a “surplus asset” and that it was “no longer needed” by the combined company.
The Ongame Network currently ranks as the 6th largest online poker room network/room in terms of cash game players, according to PokerScout.com. With a seven day average of 2,150 players, it falls just behind PokerStars.it (2,250) and just ahead of Winamax.fr (2,100). PartyPoker, which has remained separate from Ongame, ranks 2nd with a seven day average of 4,750 cash game players.
The problem Shuffle Master will face, however, is that the Ongame Network will likely not be as large after the purchase as it is now, although that is probably reflected in the purchase price. The headline room of the network is bwin.com, whose customers will almost certainly stay with bwin.party after the sale. What remains to be seen is what will happen with the other rooms on the network, particularly Betfair, the best known room after bwin.
Shuffle Master is best known for its automated card shufflers, installed in gaming tables, including poker, in casinos all over the world. The company also operates Shuffle Interactive, a division which offers casino games on a variety of platforms, including PC, Mac, Facebook, iOS, and Android. The games can be licensed by online casinos.
Investment bank Roth Capital Partners said in a research note last week, “We view the interactive gaming opportunity as the most under-appreciated aspect of Shuffle’s growth story.”
Though Shuffle Master and other American gaming companies (such as International Gaming Technology, which bought the Entraction Network for $115 million last May) are making moves under the expectation that the online poker market will open up in the United States, it does not appear that that will happen until at least next year. As we reported this weekend, the disappointing news first came from reliable Las Vegas Review-Journal reporter Howard Stutz, who tweeted, “One Wall Street analyst opinion: Internet poker legalization not being attached to the payroll tax bill means the issue is dead for 2012.” It is not completely out of the question that something could get passed this year, as there are slight hopes that a poker rider could be attached to the Obama Administration’s jobs package or the upcoming cyber security legislation, but those are not strong possibilities.