On Friday, Las Vegas Review-Journal writer Howard Stutz tweeted the following: “Senate Majority Leader Harry Reid tells R-J staff Internet poker legislation “will get done.” Reid: “I-poker “will be good for Nevada.” As if the Nevada-based casino giants needed convincing. Barely a week goes by now without Caesars Entertainment CEO Gary Loveman delivering a public affirmation of the inherent goodness of US-company-run online poker. Loveman’s outfit has also put up the dough to back up his words, spending $821k to lobby Washington, almost a quarter of the total amount spent on this issue in Q2 2011.
Not to be outdone, the American Gaming Association (AGA) has released its own congressional bar tab. The AGA went on a record bender in Q2, spending over $641k lobbying Congress on internet poker and other matters close to the land-based casino industry’s heart. That’s $281k more than the same quarter last year, and $66k more than it spent in Q1 2011.
Assuming all this money helps ‘Harrah’ Reid convince the super committee skeptics that online poker is the wellspring from which all goodness and light issues, what will the land-based casino companies do then? Of all the high profile deals struck between Nevada casino companies and online poker outfits this March, only Caesars’ deal with 888 Holdings is still viable, so small wonder Loveman is pushing so hard. International Game Technology just acquired the Entraction poker network for $115m, putting further pressure on the other companies – LVS, Wynn, Boyd, Station, etc. – to get their online poker ducks in a row, ASAP.
The solution may come from the decision of Bwin.party (Pwin) to shed their ‘surplus asset’ OnGame poker network. Analysts believe the network could be had for as little as €20-30m, a shocking devaluation since 2006, when OnGame wold to Bwin for €475m. The reason OnGame could be had so cheap is that the terms of the sale require former Bwin poker players to migrate onto the PartyGaming network, which H2 Gambling Capital’s Simon Holliday figures will rob OnGame of about half its liquidity.
But even at a clearance price, any US purchase of OnGame would be purely speculative, a leap of faith that Harry Reid can deliver on his promises to get ‘er done on the legislative front. And then there’s the small matter of OnGame’s lack of a PartyGaming-style “we’re sorry for taking US customers pre-UIGEA” multi-million settlement deal, meaning any US purchaser might subsequently face a visit by Dept. of Justice representatives with their hands out. Pwin has stated that it hopes to finish disposing of OnGame by the end of the year. We hear Nevada’s lovely in December.