Bwin.Party Digital Entertainment has deep roots, dating back to the pre-merger origins of bwin (formerly betandwin) and PartyGaming, both established in 1997. For years, the company has seen great success in online poker, casino and sports betting industries, but in an ever-changing market where PokerStars rules the roost, bwin.party has finally decided to throw in the towel… and Amaya Gaming wants to be right there it pick it up.
As you probably already know, Amaya Gaming was the diminutive Montreal-based company that exploded into a worldwide leader in iGaming last year following the bold $4.9 billion acquisition of PokerStars and Full Tilt parent company, Rational Group. Amaya’s CEO David Baazov has been on the attack with an incredibly aggressive business strategy ever since, and getting his hands on part of the bwin.party brand seems to be his next mission.
Bwin.Party on the Market
Despite flagging revenues, CEO Norbert Teufelberger of the UK-based betting group denied that the company might be looking for a buy-out in June of last year. But it only took two months for the head of bwin.party to face the reality of the situation. In August 2014, Teufelberger announced the company was on the market and looking for buyers.
Amaya Gaming has had its eye on the UK-based brand ever since, but it wasn’t until this week that the Canadian gaming group decided to team up with GVC Holdings, a leading provider of B2B/B2C services for the global online gambling community, to negotiate the terms of buy-out.
Amaya / GVC Bid for Bwin.Party
According to Financial Times reporter Kadhim Shubber, Amaya and GVC have jointly bid €1.5 billion in cash, along with an undisclosed amount of newly released shares in GVC.
If the deal goes through, the poker side of bwin’s business (PartyPoker), would immediately become the property of Amaya Gaming. The rest of the company would be operated by GVC through a ‘special joint vehicle’, dually owned by GVC and Amaya. The special joint vehicle will allow GVC to restrucutre bwin.party’s other online gambling venues for a future sale, either to GVC, Amaya or a third party buyer.
A similar buy-out structure was agreed upon in October of 2012 when GVC and William Hill teamed up for the £530 million acquisition of British online gambling operator, Sportingbet Plc. William Hill ended up taking over Sportingbet’s Australian and Spanish markets, while GVC restructured the rest of the company’s assets.
Another Bidder enters the Ring, 888
Interestingly enough, GVC and Amaya’s bid for the UK-based iGaming giant were announced just one day after another potential buyer was confirmed. On Monday, 888 Holdings Plc Ltd, owner of 888Poker, verified that it had submitted an undisclosed bid for the bwin.party brand.
The timing of a joint cash-and-paper proposal from GVC and Amaya cannot be mere coincidence. Amaya has had its eye on the UK business ever since August of last year, but up until now, had no real competition in negotiating a takeover. Teaming up with GVC gives the PokerStars owner more leverage for winning the bid over anything 888 might have to offer.
Speaking of Leverage… What about California?
There’s one more interesting twist to this story. Some industry analysts are speculating whether Amaya Gaming hopes to further its reputation in the great state of California by taking over bwin.party, operator of the Party Borgata Network (Party Poker NJ and Party Borgata) in New Jersey.
There’s been a huge debate in the Golden State, where online poker regulation is currently on the table, over whether operators with ‘tainted assets’ (such as Amaya’s PokerStars brand) should be banned by from future scripted regulations. Perhaps the ability for Amaya to apply for a license under bwin.party could somewhat elevate the stress of seeking PokerStars entry into a potential California iPoker market.