Poker News

PartyGaming signs with Danske Spil to provide online gaming in Denmark

More positive news for online poker in Europe: Denmark's state-operated Danske Spil has signed a five-year agreement with PartyGaming, which will use its expertise and know-how to offer online gaming to the Danish market.

Denmark's relationship with gaming, particularly online gaming, has been patchy through the years. While live poker tournaments were considered perfectly legal, online poker was frowned upon by the Danish Supreme Court until very recently. The Danish gaming system, Danske Spil, enjoyed a lengthy virtual monopoly while all foreign gaming companies were forbidden to enter the Danish market for most of this decade, which sparked a number of disagreements with the European Commission regarding free trade agreements within the European Union.

In 2009, Denmark finally relented and put forth a draft legislation to partially open the Danish poker and casino market, which is expected to pass as law in 2011. Denmark further showed its commitment by allowing Danish people access to Hollywood Poker's online gaming facilities. Now in early 2010, the state's former monopoly, Danske Spil, is partnering with one of the world's largest online gaming providers to prepare for the upcoming competition.

The partnership between Danske Spil and PartyGaming has everything needed to make it successful: while the Danske Spil group is one of the largest in Europe, with over 500,000 registered customers and a reported turnover of €1.47 billion (about $2.13 billion) in 2008, PartyGaming bills itself as " the world’s leading listed online gaming company" thanks to its very successful brands that include PartyPoker, PartyCasino, and PartyBets.

Jim Ryan, Chief Executive Officer of PartyGaming, was understandably glad to announce this new partnership:

This is a landmark B2B deal for PartyGaming and validates our strategy to become a leading provider of B2B services to both corporates and governments around the world.  Danske Spil is widely recognised as one of Europe’s leading gambling businesses, one that is pre-eminent in the Danish market.  We are delighted that Danske Spil has recognised our expertise and high standards of business practice and we look forward to building a significant and profitable enterprise as soon as the newly regulated Danish online gaming market opens.

Ryan has every right to be delighted. Danske Spil researched the market for seven months to find a partner that met its exacting standards for security, ethics, and, of course, quality. Their choice of PartyGaming is an endorsement of the highest possible level of the company's expertise and capability.

H.C. Madsen, CEO of Danske Spil, said of this new partnership:

With some of the world’s leading products in online poker and casino as well as a large international customer base, PartyGaming is definitely a strong business partner for Danske Spil. Combining this with Danske Spil’s unique and strong position in the Danish market with more than 500,000 Danish online customers will guarantee that together we will deliver a highly attractive customer experience to players in Denmark.

One issue that remains to be clarified is how the notoriously strict Danish taxation system will treat new gaming providers as they enter the market. Taxes on poker winnings are remarkably high on Denmark. For example, 2008 World Series of Poker (WSOP) Main Event champion Peter Eastgate could only spend $2.5 million out of the $9.1 million he won with his bracelet, the rest going to the government's arks. Companies willing to offer online poker will have to jump through hoops to be on the government's exclusive no-tax list, meaning that players will not be taxed over their winnings on those sites. Hollywood Poker currently enjoys no-tax status and it is to be expected that Danske Spil's upcoming online poker venture will enjoy it too.

PartyGaming's shares (LSE: PRTY) last traded at 279.3 pence per share in London today.

Everest Poker Acquired by Mangas Gaming

While rumors are flying left and right about potential buyouts and mergers in the European online gaming market, news broke that Everest Poker and Mangas Gaming will join forces.  Mangas plans to buy out Everest in early 2010 as part of a deal worth in excess of $100 million.

The deal will be finalized in the first quarter of 2010.  Mangas Gaming will pay $100 million to Everest’s parent company, GigaMedia, in exchange for 60% of the shares of the company.  A Dow Jones article also stated that the final portion of the deal would be paid out after the company’s fair market value is reassessed in 2012.  There is also an option that allows GigaMedia to buy back Everest Gaming in 2013 should it see fit to do so.  GigaMedia is a publicly traded company on NASDAQ Stock Exchange, where it can be found under the symbol “GIGM.”

While the name Mangas may not sound familiar, the sites it owns and operates are well-known within the online gaming market: BetClic, Expekt Poker, and Bet-At-Home.  The French-based company appears to be taking more interest in poker as of late.  In addition to brokering the Everest deal, the company also signed World Series of Poker (WSOP) bracelet winner Scotty Nguyen as an Expekt spokesman earlier this year and debuted former Team PokerStars Pro Isabelle Mercier as a BetClic spokeswoman at the Doyle Brunson Five Diamond World Poker Classic at the Bellagio.

The increased efforts of Everest Poker to heighten its profile in the French marketplace make even more sense in light of this deal.  The company, which is the official on-felt sponsor of the WSOP, signed a deal with November Nine member Antoine Saout after he made the Main Event final table and added Fabrice Soulier to its roster of pros last month.

Mangas Gamings Chief Executive Officer Isabelle Parize commented on the deal in an official press release announcing the acquisition: “We are very proud that Everest is joining our group.  It is a great company; it is a brand with an outstanding awareness in the world of poker, well-known for its know-how, its platform reliability, and its strict policies. Mangas Gaming is reinforcing its position as a major European player in both the online poker and sports betting markets.”

GigaMedia’s CEO, Arthur Wang, expressed similar sentiments in his statement.  “We were looking for a reference partner with complementary activities to ours,” Wang explained.  “Our strategy is to participate in the growth of this innovative and dynamic industry in Europe. We are glad to do it alongside the French leading sports betting and online gaming group.”

Poker News Daily has learned that once the deal is complete, players on Mangas’ other online poker rooms will be shifted towards Everest.  Expekt is expected to disappear entirely before the end of 2010 and all of the company’s customers will be shifted over to Everest.

Since the announcement of the deal, shares of GigaMedia saw a spike in trading value.  After trading as low as $3.53 on December 11th, stock prices shot up as high as $4.24, an increase of 20%.

WSOP edges closer to online poker with 888 deal

Harrah's Interactive Entertainment and 888 Holdings reached an agreement where 888's Dragonfish division will provide online poker and casino software to Harrah's as it attempts to enter the online gaming market.

"The intent is to be in the online gaming space, wherever it's legal," said WSOP Communications Director Seth Palansky. "We've partnered with 888 to develop a platform."

No timeline was given for Harrah's online launch, but it was confirmed that both the WSOP and Caesars Casino brands will have an online presence. In addition, Dragonfish will also provide ePayments, VIP services and Customer Service to help develop both brands.

888 Holdings is a major player in the online gaming market in Europe, but not as well-known in the U.S. after pulling out of the market when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006.

Although the 888.com website offers no games, it acts as a portal to popular gaming sites like Pacific Poker, 888sport (sports betting) and Reef Club Casino.

"This is a ground breaking deal for 888.com and demonstrates our ability to provide real value to globally renowned, land-based casinos and their leading brands," said Gigi Levy, CEO of 888.

It remains to be seen if the WSOP having an online presence would be a conflict of interest with live event sponsors like Everest Poker and Betfair Poker.

Palansky didn't see it becoming an issue.

"I really don't think there's anything for anybody to worry about," he said. "The WSOP will remain a premier live poker destination. Our offline events are great opportunities for our sponsors.

"If all this goes through and we do develop an online gaming site then we would be competing in some of the same markets. We would still have relationships with the other sites, however."

Mitch Garber, the CEO of Harrah's Interactive Entertainment, went into more detail about why they decided to go with 888.

"As we develop and roll out our interactive strategy, we have chosen to work with 888, primarily for their world-class technology, scalability and strong commitment to compliance and responsible gaming," said Garber.

The announcement of the joint effort between Harrah's and 888 comes just as the U.S. appears to be warming up to the idea of legalizing and regulating online poker.

An article by conservative columnist George Will appeared in the Washington Post calling for the legalization and Barney Frank's pro-online poker bill HR 2267 is scheduled for a hearing in September.

Palansky said it wasn't a factor in the deal, however.

"Harrah's has been looking into this for years," he said. "We just felt the timing was right for us to start exploring our options.

"Obviously we are hopeful the U.S. government will recognize that - like our brick and mortar gaming establishments - online poker can be regulated, taxed and run with the utmost confidence.

"If that happens, great, if not we'll focus on other markets."

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European Union Rules In Favor Of Portugal Gaming Monopoly Over bwin

In what is a startling change from previous decisions that have been handed down by their judiciary, the European Union’s Court of Justice ruled against online gaming operator bwin in a suit the organization had brought before the Court.

The original challenge from bwin focused on the nation of Portugal and its monopolization of the online gaming industry. The Portuguese soccer league had signed a sponsorship deal with bwin that allowed the online gaming giant to advertise to fans who visited the website of the league. The national Portuguese state betting monopoly, operated by the national charity Santa Casa, objected to the deal and ordered the league to remove the bwin affiliation, which drew the charges by bwin and the soccer league in the Court of Justice.

Instead of finding on the side of the online gaming company and the soccer league - as has been the case in many proceedings in the past - the Court of Justice found that the government of Portugal and the betting company Santa Casa had the right to shut down the deal between bwin and the Portuguese soccer league. Details of the decision, issued on Tuesday, demonstrated that there is a fine line when it comes to these decisions across the borders of the European Union.

In an announcement of the decision, the Court of Justice stated, “Member States are free to set the objectives of their policy on betting and gambling and, where appropriate, to define in detail the level of protection sought. The fight against crime may constitute an overriding reason in the public interest that is capable of justifying restrictions in respect of operators authorized to offer services in the games-of-chance sector.”

What perhaps is the key reasoning for the decision from the Court of Justice is that the business arrangement between bwin and the Portuguese soccer league could lead to improprieties on the pitch. “The possibility cannot be ruled out that an operator which sponsors some of the sporting competitions on which it accepts bets and some of the teams taking part in those competitions may be in a position to influence their outcome directly or indirectly, and thus increase its profits.”

The European Union has had a tremendously difficult time when it comes to decisions regarding online gaming across its Member State borders. While some have taken the approach of Portugal and started government sponsored gaming sites, which prevent outside companies from entering into their monopolized gaming arenas, others have taken a different tactic and embraced the regulation and taxation of the industry, such as England. In many cases in the past, the European Union’s myriad of Courts and committees has made decisions that sided with the gaming industry and forced nations to open up their borders to outside companies. In the past year, however, there has been a change to some of the policies that the EU tries to enforce.

In March of this year, the European Union admitted that they were unable to come to a comprehensive agreement regarding the streamlining of access to internet gaming across the continent. This has opened the doors to Member States of the EU to test how far a government run gaming option can push the EU’s free trade policies, with Italy’s online gaming market - which allows outside companies to participate if they adhere to severe conditions - as the primary example. While we may think the United States has all the problems with online gaming, the European Union is also demonstrating that they have few answers to the questions either.

The International Poker Marketplace: Las Vegas Sands, Playtech, and Bodog goes Canadian?

Welcome to the International Marketplace Report. Every week we'll be bringing you the ups and downs of the International, and online gaming market. Because really... why read the financial wires when we can do it for you.

The Online Poker Marketplace Report: Betfair IPO, Microgaming Skins Liquidated and More

Welcome to a new feature here on PokerNews, the Online Marketplace Report. Every week we'll be bringing you the ups and downs of the online gaming market and all the happenings behind the scenes at your favorite sites. Because...

WPT finds a new buyer

On Aug. 4, Gamynia Limited agreed to pay $9,075,000 plus a percentage of future revenues for almost all of WPT Enterprises assets, including its television, sponsorship, distribution and licensing units.

The deal was pending stockholder approval and in the interim another offer was made. SEC guidelines required the company to consider the new offer and Monday, the WPT announced they had accepted it.

This time the buyer is a subsidiary of PartyGaming, which also owns the online poker site Party Poker.

The deal is similar to the Gamynia offer, except the subsidiary, Peerless Media Ltd., has agreed to pay $12.3 million for the company's assets and 5% of future gaming and other revenues.

"PartyGaming has been an important partner for a number of years and we are confident that they will be an excellent manager of our brands in the future," said WPTE president and CEO Steve Lipscomb.

"The Board of Directors has determined that PartyGaming's acquisition proposal is financially superior and we look forward to working with one of the pioneers and leaders in the poker and online gaming markets to provide a strong vehicle for the WPT brand to continue its global expansion and return to online gaming."

This new deal is now pending stockholder approval and is expected to be completed in the fourth quarter of 2009.

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PartyGaming Purchases WPT Enterprises for $12.3 Million

The long-awaited second bidder in the sale of World Poker Tour Enterprises (WPTE) has finally been revealed. Peerless Media Limited, a subsidiary of Party Gaming, will purchase the rights to the popular poker tour for $12.3 million plus 5% of future gaming revenues.

PartyPoker, the online poker arm of PartyGaming, does not accept customers from the United States. In a form filed to the Securities and Exchange Commission (SEC) after trading had closed on Monday in New York City, WPTE officials explained, “Buyer will pay the Company $12.3 million less the amount of certain obligations of PartyGaming or its affiliates accruing or paid to the Company from July 10, 2009 through the close of the Transaction… $1 million of such amount shall be paid by Buyer to the Company upon the execution of the Purchase Agreement and the balance shall be paid to the Company at the Close.”

The $1 million cash advance will be used to back out of a prior purchase agreement with Gamynia Limited, which is associated with Playtech, the parent company of the iPoker Network. Earlier this month, WPTE entered into an agreement to sell the majority of its assets to Gamynia for $9.075 million plus 4% of future gaming revenues. The new agreement not only increases the sale price by more than $3.2 million, but it also affords WPTE an additional 1% of future gaming revenues.

Addressing the new buyer, WPTE Founder, President, and CEO Steve Lipscomb commented in a press release distributed late Monday afternoon, “The Board of Directors has determined that PartyGaming’s acquisition proposal is financially superior and we look forward to working with one of the pioneers and leaders in the poker and online gaming markets to provide a strong vehicle for the WPT brand to continue its global expansion and return to online gaming.” WPTE stock, which is traded on the NASDAQ under the same four-letter acronym, closed at $1.05, down $0.01 on Monday. Upon hearing that a second buyer was waiting in the wings, the stock shot up from $0.93 to $1.09 last week.

In a similar arrangement as the Gamynia sale, WPTE will hand over its television library, intellectual property rights, and brand names, which include the WPT and Professional Poker Tour (PPT). The company will retain its cash on-hand and pocket “future license revenues from certain existing Sponsorship deals for Season Seven of the World Poker Tour.” WPTE will not distribute any of the proceeds of the sale to its stockholders; the Los Angeles-based company will use the proceeds as seed money in a business venture outside of poker. WPTE officials could not comment on any future proceedings, citing SEC regulations.

WPTE shareholders must now approve the sale. The company’s SEC filing notes that investors holding 39% of the company’s stock have agreed to vote in favor of the transaction. A stockholders’ meeting will be coordinated in order to vote on the proposal.

According to the filed document, “The Purchase Agreement may be terminated by either Buyer or the Company if the Closing has not occurred by February 24, 2010.” If WPTE officials were to accept an alternative proposal from another buyer, the company would be subject to a $1 million termination fee and, in some cases, a $1 million reimbursement for PartyGaming’s up-front payment.

PartyPoker boasts WPT Host Mike Sexton as its ambassador after the two parties reached an agreement in late April. Sexton is a 2009 Poker Hall of Fame candidate and is currently on-site for the WPT’s Legends of Poker, which wraps up on Wednesday from the Bicycle Casino in Southern California. Attendance at this year’s event was off 25% from last year. The tournament will air as part of Season VIII of the WPT on Fox Sports Net.

Stay tuned to Poker News Daily for the latest WPT sale news.

World Poker Tour Sale – Second Bid Filed

In breaking news from Wall Street, it was revealed that World Poker Tour Enterprises (WPTE) has received an “alternative acquisition proposal.” On August 3rd, it entered into an agreement with Gamynia Limited in a deal that was to be finalized during the fourth quarter.

The contents of the alternate bid and the company that submitted it have not yet been made public. A filing made to the Securities and Exchange Commission (SEC) on Tuesday simply reads, “The Company’s Board of Directors has received an alternative acquisition proposal and is following the process required by the Purchase Agreement. Until the process required by the Purchase Agreement is completed, the Company will delay the filing of a preliminary proxy statement with the SEC.” Additional information will be released on the bid in the near future.

An August 3rd filing by WPTE to the SEC outlined the parameters of the sale of its assets to Gamynia for $9.075 million plus a percentage of revenue derived from use of the World Poker Tour and Professional Poker Tour brands. The WPTE agreed to hand over its television library, intellectual property rights, and brand names to Gamynia. WPTE will retain its cash on-hand and “future foreign sponsorship revenues from the sponsorship of Seasons Four, Five, and Six of the World Poker Tour and Season One of the Professional Poker Tour by Party Gaming and the license of Season Seven of the World Poker Tour to PokerStars.”

Upon completion of the sale, WPTE officials noted that the company will pull itself out of the poker market and will not distribute any proceeds from the sale to its shareholders. The company’s stock, found on the NASDAQ under the symbol “WPTE,” was trading at $1.09 at the time of writing, up $0.17 on the day, or 18.49%. It spiked in early trading to $1.06 before trending up to its current level. The alternative bid may be the cause of the dramatic increase in share price on the day.

The filing outlining the sale explained that the WPTE’s “obligation to complete the asset sale is subject to the approval by the Company’s stockholders of the asset sale transaction and other customary closing conditions.” A meeting of stockholders was to be held and WPTE officials noted that investors representing 39% of the company had already agreed to vote in favor of the Gamynia acquisition. The filing on Tuesday explained, “Under the Purchase Agreement, the Company is to file a preliminary proxy statement with the SEC within 21 days of signing the Purchase Agreement.” The 21-day period has not yet elapsed, apparently leading to the second bid.

Gamynia had secured the services of Hardway Investments, which works with online gambling behemoths Playtech, Casino Tropez, Europa Casino, Titan Poker, and the affiliate network Euro Partners. WPTE Founder, President, and CEO Steve Lipscomb commented in the press release announcing the sale, “Of particular importance for our partners is the fact that Hardway Investments has an established track record of creating revenues and value in the online gaming marketplace. We should benefit for many years from our participation in those revenues streams.”

Under the specifications of the sale, should it be completed, the WPTE will change its name and continue operations. In the meantime, WPTE announced last week that it had entered into a pair of sponsorship agreements for televised and non-televised poker tournaments in Europe. The agreement lasts for two seasons with an option for a third and begins in October. The sponsor in question, which was not revealed in the filing, will also serve as the presenter of WPT Season VII in Europe.

Action on the World Poker Tour resumes on Saturday from the Bicycle Casino for the annual Legends of Poker event. The $10,000 buy-in tournament will crown a champion four days later.

WPT: Season 8 soldiers on

"At this point we don't anticipate any changes to the Season 8 schedule," WPT Enterprises Interim Chief Financial Officer Thomas Flahie told PokerListings. "No dates or locations are expected to change."

WPT Enterprises, Inc. announced Monday that Gamynia Limited had agreed to acquire substantially all of the company's operating assets including the WPT's television, sponsorship, distribution and licensing units.

Pending shareholder approval, the $9 million sale is expected to be completed in the fourth quarter of 2009.

Under the agreement, Gamynia is expected to push the WPT further into the online gaming market and Flahie said the buyers may even be interested in expanding the tour.

"The buyer has expressed an interest in expanding the tour in Europe," he said. "There's definitely an interest in expanding outside of the U.S. market."

Flahie said operations will continue as normal and details regarding any possible expansion will not be available until after the sale is complete.

The WPT's Season 8 schedule continues later this month with the Legends of Poker event at the Bicycle Casino in Bell Gardens, California, August 22-29.

According to the WPT, Season 8 includes 13 additional stops featuring events in Slovakia, Cypress, Marrakech, Atlantic City, Las Vegas, Los Angeles, San Jose, Biloxi, a new stop in Lawrenceburg, Indiana and the Foxwoods Casino in Mashantucket, Connecticut.

Related Articles:

• World Poker Tour sold

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World Poker Tour sold

Pending stockholder approval, a privately held investment group under the name Gamynia Limited has agreed to pay $9,075,000 plus a percentage of future revenues for almost all of WPT Enterprises assets, including its television, sponsorship, distribution and licensing units.

The agreement will also see Gamynia jump full force into the online gaming market and, as a result, it has secured the services of Hardway Investments Ltd., an online gaming marketing company that has worked with Titan Poker and several other online gaming sites in the past.

"We believe this transaction will enable the World Poker Tour to realize its full potential across both its existing businesses and the lucrative online gaming market," said Steve Lipscomb, President and CEO of WPT Enterprises.

According to the terms of the deal, the WPT will sell its television library, but retain cash investments and future foreign sponsorship revenues from Seasons Four, Five and Six of the World Poker Tour and Season One of the Professional Poker Tour to PartyGaming and the license of Season Seven of the World Poker Tour to PokerStars.

WPT Enterprises will keep its office and employees and plans to develop or acquire a non-poker related business.

"After the transaction, WPTE will move forward under a new name and will employ our cash in a new venture by developing a new business or combining, through one or more strategic transactions, with companies that have significant unrealized value or growth potential," Lipscomb added.

The sale must be approved by a majority of WPT Enterprises stockholders, but those representing 39% of the company's stock have already entered into voting agreements with Gamynia.

A stockholders meeting is planned for later in the year and Gamynia expects to complete the transaction in the fourth quarter of 2009.

"The World Poker Tour was the catalyst for the 2003 poker boom in the United States that quickly gave rise to a global poker phenomenon," Lipscomb said.

"The massive international business markets that have evolved from that phenomenon have been dominated and driven by the lucrative online gaming business. The World Poker Tour as a stand-alone entity has struggled to find the appropriate place for its stockholders in this fast evolving market.

"The World Poker Tour brand continues to grow around the world and has managed to make casinos and online gaming concerns cooperate in unique and mutually beneficial ways. In Gamynia, we have found a partner that already understands and fosters a spirit of cooperation in the online marketplace."

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World Poker Tour Sold to Gamynia Limited

In breaking news from the World Poker Tour (WPT), its parent company has sold the roving tournament series for $9.075 million plus a percentage of future revenues to Gamynia Limited. Recently, the WPT recorded its second straight month of profitability.

Its complete library of WPT episodes and intellectual property are just two of the assets that Gamynia Limited will absorb as part of the sale. The current ownership of the WPT will continue to receive revenues associated with “the sponsorship of Seasons Four, Five, and Six of the World Poker Tour and Season One of the Professional Poker Tour by Party Gaming and the license of Season Seven of the World Poker Tour to PokerStars.” The parent company of the WPT plans to use the $9.075 million in newfound revenue for business ventures that are unrelated to poker.

The sale will likely be completed during the fourth quarter of 2009, but must first be approved by a majority of the company’s stockholders. A special meeting to ratify the sale will be held and, in the meantime, the WPT has secured 39% of its stockholders as “yes” votes. WPT Founder, President, and CEO Steve Lipscomb commented in a market update distributed late Monday, “We believe this transaction will enable the World Poker Tour to realize its full potential across both its existing businesses and the lucrative online gaming market. Gamynia and its partners possess highly complimentary resources which will help it invest in and effectively integrate with the World Poker Tour efficiently and profitably.”

Gamynia has already reached out to Hardway Investments, which, according to the same release, “will seek to exploit and develop the WPT brands with the goal of maximizing future revenue opportunities.” Hardway’s existing clients include some of the internet gambling industry’s marquee names like Playtech (which owns and operates the popular iPoker Network), Casino Tropez, Titan Poker, and Europa Casino. It also works closely with the affiliate group Euro Partners. Hardway is based in Antigua and brings a significant amount of internet gambling experience to the WPT brand.

WPT Enterprises will retain its cash on-hand, debt investments, office leases, and “employee obligations.” No proceeds from the sales will be distributed to WPT Enterprises’ stockholders. Its stock is traded on the NASDAQ under the symbol “WPTE” and was down $0.41 at the time of writing on Tuesday, or 27%, to $1.08. WPTE closed trading on Monday at a price of $1.49, but the release made to Business Wire was not published until after the NASDAQ had ceased trading for the day. After the sale is completed, WPT Enterprises will continue operations under a new name. The company plans to use its cash leftover from the poker business to enter into a joint venture or other business relationship with a new company.

The WPT is in the midst of filming its eighth season, which will once again air on Fox Sports Net. Its next tournament kicks off on August 22nd from The Bicycle Casino in Los Angeles, home of the Legends of Poker. The $10,000 buy-in tournament crowns a champion four days later. Last year, poker pro John “The Razor” Phan dominated the field of 373 players and earned a $1.1 million first place prize. He defeated online poker sensation Amit “amak316” Makhija heads-up in a final table that also featured Zachary Clark, Paul Smith, Trong Nguyen, and Kyle Wilson.

Attendance at the kickoff U.S. event of Season VIII of the WPT was down sharply. Just 268 players turned out for the annual Bellagio Cup, down 40% from the 446 that took to the felts at the storied Las Vegas casino in 2008. In the end, Team PokerStars Pro member Alexandre Gomes defeated Faraz “The-Toilet” Jaka heads-up to earn $1.2 million.

Washington Post Responds To PartyGaming Settlement

After the announcement Tuesday of the settlement between PartyGaming PLC and the United States Attorneys Office, the Washington Post followed up on its 2008 two day investigation into online poker with a response.

Headed by Gilbert M. Gaul - who investigated the scandals of Absolute Poker and Ultimate Bet in cooperation with the CBS newsmagazine “60 Minutes” in late 2008 - the Washington Post article delved into some of the ramifications that the settlement could have for the online poker world. Gaul’s article states that the settlement is “…a development that could signal a shift in the murky and unregulated world of online gambling.”

The settlement between PartyGaming and the U. S. attorneys in New York calls for a fine of $105 million to be paid by the company over the next 3 ½ years. Along with the payment of the fine, PartyGaming also admits to violating what the Post article calls “a disconnect between 21st century technology and the 20th century laws used to protect Americans from gambling” through violations of the Unlawful Internet Gaming Enforcement Act (UIGEA), which was enacted in late 2006. Under the terms of the “Statement of Facts” agreement with U. S. representatives, PartyGaming officials said the government would not prosecute the parent firm or any of its subsidiaries for offering Internet gambling services to U.S. customers between 1997 and October 2006, when it voluntarily withdrew from the market after the UIGEA enactment.

In the Post article, Gaul states that “The (Department of) Justice’s position is considered controversial with some members of Congress and gaming analysts, arguing it has steered U. S. players to unregulated offshore sites.” Along with this statement, Gaul includes a quotation from Joseph M. Kelley, a professor of business law at the State College at Buffalo. “The U. S. government has now succeeded in driving out the reputable, publicly-traded Internet gaming operators,” he proposed. Kelley, who has also served as an expert witness for gaming and government interests, added: “It has not decreased online gambling, but has reduced the ability to monitor suspicious transactions.”

The stock of many of the publicly traded online gaming companies on the London Stock Market rose after the settlement announcement. Gaul believes it is because “some financial analysts see the settlement as possibly leading to others, thus reducing uncertainty in the industry and opening the door to industry consolidation and expansion outside the U.S. Some analysts said PartyGaming also had now increased its chances of gaining a license from any future regulated U.S online gaming market.”

While the dust hasn’t settled regarding the agreement of PartyGaming and the U. S. government, Gaul’s Washington Post article does point out many of the advantages of such settlements for the online gaming world. For a full look at Mr. Gaul’s outlook on the settlement, view his article at the Washington Post.

888 Operating Income Grows 21% in 2008

In its 2008 end of year results released this week, 888, the parent company of Pacific Poker, revealed that its operating income grew by 21% last year to $262.5 million. In 2007, it reported operating income of $216.9 million.

888's casino arm saw its revenue balloon by 14% to $135.1 million in 2008, up from $118.1 in 2007. However, Pacific Poker's revenues dropped by 4% from $80.8 million in 2007 to $77.2 million last year. All told, 888 posted a profit before tax of $48.6 million during the 2008 calendar year, up 6% from 2007. This resulted in a final dividend of 2.9 cents per share.

Operational highlights for the brand in 2008 included 14 new business customers, including an arrangement with Sportech PLC, which was forged back in June. The addition of two new Bingo customers brought its total stable to nine and, on the same day as its earnings were released, 888 announced a partnership with the Racing Post, which it describes as “the pre-eminent horse-racing industry publication.” Also during 2008, the company launched 888sport.com and 888ladies.com.

888's Chief Executive Officer, Gigi Levy, commented in the company's earnings release, “We believe that this successful model, offering both B2B and B2C businesses, is key to growth in the online gaming market in the coming years. Despite the difficult economic circumstances during the last few months of 2008, our underlying business remained strong.” The company warned that its first quarter revenues in 2009 will likely be lower than its fourth quarter revenues in 2008, reflecting the downswing in the global economy.

In 2008, Pacific Poker became available in 11 languages: Russian, Polish, Czech, Bulgarian, Hungarian, Romanian, Lithuanian, Latvian, Estonian, Greek, and Japanese. The report by 888 also revealed that Pacific Poker may receive a makeover in 2009: “The Pacific Poker site will be given a new look and feel, with additional products and poker side bets enhancing the customer experience of the poker room.” Pacific Poker, like other online poker sites owned by publicly traded companies, does not accept customers from the United States. The decision came after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.

The number of active customers on Pacific Poker sank from 170,988 during the first quarter of 2008 to just 158,557 during the fourth quarter. Consequently, its average revenue per customer fell from $128 to $107. On its lackluster close to the 2008 calendar year, 888 officials explained, “Due to the prolonged and deepening economic downturn, unprecedented challenging trading conditions were experienced following the end of the summer holiday season. Active customers played slightly less and volatile adverse foreign exchange movements exacerbated the effect on US$ denominated revenues.”

Nearly a quarter of a million new players deposited for the first time on 888's poker or casino platforms last year. It inked poker agreements with Poker Dome, Littlewoods, and Lucky Ace in 2008, further growing its presence in the marketplace. Similar to other internet gambling sites that do not accept U.S. players, 888 is keeping close tabs on the developments between the European Commission and World Trade Organization. Last week, the Commission's preliminary findings revealed the U.S. is in violation of its trade obligations due to its stance on internet gambling. A final report is due this month.

According to traffic ranking site PokerScout.com, Pacific Poker boasts the 13th busiest network worldwide in terms of cash game volume with a seven day running average of 1,100 players. Its 24 hour peak is nearly double that number, 2,174. At the time of writing, which is late afternoon throughout Europe, nearly 1,400 ring game players are seated at its virtual felts.