PokerStars among bidders for Delaware Lottery contracts; Optimal Payments plot US return

pokerstars-delaware-lotteryPokerStars parent company Rational Services Ltd. is among 14 names vying to become a Delaware Lottery online gambling technology provider. Delaware passed full-fledged (poker, slots, table games) online gambling legislation last June and has targeted Sept. 30, 2013 as the date for the system going live. The Lottery issued a request for proposals in February for tech companies interested in being the Lottery’s digital backbone, and 14 notable names submitted their homework before the March 15 deadline. The winners of this derby will learn their fate April 22.

Lottery assistant director Rebecca Goldsmith told GamblingCompliance that in addition to Rational, the list of tech hopefuls includes 888 Holdings (in conjunction with Scientific Games/WMS Gaming) and a tandem bid by Canada’s Amaya Gaming Group and Bally Technologies. Other suitors include International Game Technology (IGT), SHFL Entertainment, UK bookies Stan James and Isle of Man-based data center outfit Continent 8 Technologies. Scientific Games has a longstanding history with the Delaware Lottery, handling everything from instant tickets to VLTs at racinos to the state’s parlay sports wagering system, so it may have something of an inside track, here.

PokerStars’ bid is interesting, as unlike its pursuit of a New Jersey gaming license, Stars would be acting in a B2B capacity in Delaware. Since Delaware plans to act as its own operator, the only ‘bad actor’ type restrictions it included in its RFP were if a company had been deemed “ineligible to conduct business in the State of Delaware.” Potential protestations over Stars’ participation are far less likely given Caesars Entertainment’s apparent disinterest in the Delaware market.

Caesars is also not likely to make much of a ruckus over another former ‘bad actor’ making a potential return to the US market. Optimal Payments, which in a former life was known as Neteller/Neovia, paid a $136m penalty in 2007 after the US Department of Justice charged a couple of its founders with laundering billions of dollars on behalf of US-facing online gambling companies. Yet Optimal CEO Joel Leonoff doesn’t think the company’s checkered past will impact its ability to process payments in newly regulated US online gambling markets.

Leonoff made the comments after revealing the company’s 2012 financial results, which saw Optimal post a pre-tax profit of $3.6m on revenues of $138.9m. Leonoff believes 10 states will have legalized online gambling by 2014, including California, and Optimal hopes to move money in all of them. Leonoff said the company’s past legal woes wouldn’t impact its ability to acquire the necessary licenses, as operators “have a much more onerous regulatory requirement to adhere to” compared to mere tech suppliers. Leonoff says Optimal is in talks with various land-based gaming operators with an eye toward inking some deals.

In October, Optimal signed its first such deal with Caesars’ online division, Caesars Interactive Entertainment. The fact that Caesars would sully its good name by associating itself with a former ‘bad actor’ underscores the self-serving nature of Caesars’ attacks on PokerStars as a ‘criminal enterprise’ for having dealt with US customers following passage of the UIGEA in 2006. After all, both Optimal and PokerStars cut sizeable checks to the DoJ to atone for past indiscretions. But since Optimal isn’t a Caesars competitor, Optimal’s penitence is genuine, whereas the black hat remains firmly perched atop Stars’ head? Puh-leeze…