Following Friday morning’s announcement that merger talks between 888 Holdings and Ladbrokes had collapsed, Lads CEO Richard Glynn announced that he’d “simply decided it was not in the interests of our shareholders.” Of course, Glynn’s a public company guy, so he wanted to end on a hopeful note, in this case by saying “never say never” to the possibility of resuming talks at some point in the future (although Takeover Panel rules preclude them from having another go for at least six months). 888 Holdings shares finished the day off 15.35%, while shares in Ladbrokes rose 7%. Seems the market has rendered a clear verdict on which company needed this deal more.
The Black Friday online poker indictments came too late in the day for the UK markets to react, so it will be interesting to see how the public companies fare Monday morning. Of course, their CEOs will be out there, furiously spinning, telling anyone who’ll listen that Black Friday is not a crisis, but an opportunity. A unique opportunity for them, the public companies whose binding shareholder agreements compelled them to pull out of the US market post-UIGEA. It’s an even bigger opportunity for the companies that paid millions of dollars to the US Department of Justice in exchange for a vague, non-binding, intangible perception of a hopefully mutual understanding that this money washed away all the public company’s sins, leaving it pure enough to be welcomed back into the Garden of Eden.
This idea that Black Friday will somehow hasten the formation of a regulated US market is, to put it charitably, dubious. The mainstream media’s Cliffs Notes/sound-bite delivery of this story means that most US voters likely heard only the phrases ‘online poker’ and ‘money laundering’. In political terms, the issue is temporarily radioactive, and if no regulatory progress is made this year, it will be an even tougher slog in 2012 (an election year, traditional boom time for anti-gambling rhetoric).
But public companies are all about hope. Selling the promise of a better tomorrow. Yes, it’s black days, now, but the sun will come out tomorrow. Bet your bottom euro that tomorrow, there’ll be a US gaming license. At least, there better be. There has to be. Quick, everyone… Do you believe? If you believe, clap your hands. Clap your hands or Tinkerbell Gaming will die!
Of all the European companies that struck an online poker deal with a Nevada-licensed gaming outfit, the only one to survive Black Friday was 888’s arrangement with Caesars Entertainment. With its CEO Gigi Levy abruptly quitting and its share price reeling, 888 desperately needs this Caesars deal to be viewed as its white knight, arriving in textbook heroic style, at the last minute, just when things looked their worst. Will it be enough to pull 888’s arse out of the fire, allowing it and Caesars to link arms and stroll off into the sunset together? What do you say, market? Do you believe?