Online gambling legislation beloved by online gambling companies survived an assassination attempt in the north German state of Schleswig-Holstein (S-H) on Thursday. A repeal bill backed by the opposition Social Democrats was defeated by a single vote – the same margin by which the online gambling law passed in September. The Social Democrats had hoped that by repealing the law, S-H would adopt the state gambling treaty signed by the other 15 German länder, and thus avoid turning S-H into what MP Uli Schippels derisively referred to as the “Las Vegas of the north.” The race is now on to issue licenses before S-H residents go to the polls on April 6 and possibly change the makeup of the state legislature.
Daniel Stewart analyst Michael Campbell had warned ahead of the vote that pan-European operator bwin.party (Pwin) had the most to lose from the repeal bill passing. Bwin derives a quarter of its revenues from Germany, and German legislators have proved quite adept at manipulating bwin.party.bungee’s share price down, then up, then down again, and down some more… But there were no such fireworks on Friday. Shares rose briefly, but finished the day about where they started (-0.37%). Honestly, we felt a little like the Martian in those old Bugs Bunny cartoons: Where’s the kaboom?
It’s possible Pwin investors’ eyes were focused westward. Pwin shares had long since recovered from their August swoon, helped in part by the announcement of the US online poker joint venture with MGM Resorts and Boyd Gaming and the recent speculation about Sen. Harry Reid’s attempts to attach a federal online poker bill to the payroll tax cut extension. But Reid’s efforts were blocked, and Pwin shares have fallen 3.5% since Boyd CEO Keith Smith’s mid-week statement that federally regulated online poker in the US was “a little further off than we had hoped.”
Shortly after the Schleswig-Holstein law fended off the repeal bill, Betfair issued a press release praising S-H for making it over the “latest hurdle.” Like Pwin, Betfair’s stock was largely indifferent to the S-H vote, but also like Pwin, Betfair has recently suffered a US setback (or two). There are only two US states that have passed legislation authorizing exchange wagering on the ponies: New Jersey and California. But in December, a deal to privatize New Jersey’s state-run Monmouth Park racetrack fell through, and the state doesn’t expect to find a new buyer until 2013 at the earliest. Until that happens, no Garden State exchange wagering for Betfair’s US subsidiary TVG.
California passed its exchange wagering law two years ago, and the actual wagering was supposed to start in May. But on Feb. 9, California’s Horse Racing Board elected to defer implementation until certain racing figures (aka the Stronach Group) figure out how they feel about that thar newfangled exchangin’ technology horning in on their parimutuel action. Joe Harper, CEO of San Diego’s Del Mar Horse Racing Track, told Gambling Compliance that the concerns were “a competitive thing because Betfair is the only company that is ready for exchange wagering, and the other companies don’t want Betfair to have a head start.” Nevertheless, TVG senior VP John Hindman maintains that Betfair will be handling exchange wagers in California “by early to mid-summer.” At least, until someone exchanges that time-frame for a later one.
