BUSINESS

US market wannabes need pixie dust to make merger magic happen

TAGs: 888.com, Bwin/PartyGaming merger, Sportingbet

Merger-Magic-Pixie-DustIn the wake of the ongoing Bwin/PartyGaming merger mayhem, the consensus is that all publicly traded online gaming companies are now legit takeover targets. Indeed, many of these companies are now boldly strutting their stuff for potential tricks, er, buyers to examine. Trouble is, nobody wants to get into bed with these companies unless they first produce clean bills of health issued by the US Dept. of Justice (currently retailing for seven- or eight-figure sums, depending on how many US customers you were previously ‘involved’ with).

Trouble is, even if these merger-mad companies do what’s expected of them, there’s no quid pro quo guarantee that they’ll ever be granted access to a (for the moment entirely theoretical) liberalized US market, or whether such a market would permit licensed entities to mingle their US liquidity with non-US residents. How will shareholders react when they realize they’ve let their boards of directors pay out tens of millions of dollars for little or no tangible return? (If it helps, try to envision the final scenes of Frankenstein, you know, with the angry mob and the torches and pitchforks and such…)

Meanwhile, as boards hold endless meetings to debate how big a check to cut, private operators such as PokerStars go about their business, offering services to US customers from their existing international base, using their mammoth liquidity to trump other advantages. Call it the ‘bald eagle in the hand’ strategy, but for the moment, it’s the one that’s working. Read more.

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