BUSINESS rumored split in the works as Boyd execs clarify US joint venture

TAGs: Borgata Hotel Casino and Spa, Boyd Gaming, bwinparty, keith smith, New Jersey Online Gambling, Norbert Teufelberger

bwin-party-splitPan-European online gambling operator digital entertainment is reportedly pondering a split into two separate entities; one to service regulated markets and the other targeting so-called ‘grey’ or black markets. The Financial Times reported that was “working on a plan to spin off its unregulated operations into a separate company.”

While no further details were offered as to what the mechanics of such a division of responsibilities would entail, the FT volunteered trader speculation that such a split would make “a target for casino operators keen to take advantage of US legislation.” The rumor’s more immediate effect was to send stock up 3.9% on Tuesday to close at 135.9p, its highest close since mid-May.

True or not, the rumor suggests there’s been some serious rethinking of’s recent decision to pull out of 18 ‘grey’ markets as part of the ‘value not volume’ strategy espoused by CEO Norbert Teufelberger (pictured above, midway through the rumored cell-division). The strategy led to some dire Q1 numbers and the company has warned that Q2 was shaping up to be even worse. And despite’s stated aversion to ‘grey’ markets, it was just last month that the company’s Swiss-facing subsidiary was called out by that country’s government for its “misleading” use of the Swiss coat of arms to imply some kind of state-sanctioned operation. has been busy tidying its regulatory closet of US skeletons – including a $15m ransom to the Commonwealth of Kentucky – to ensure no hiccups occur while its online gambling license applications in New Jersey and Nevada are pending. Meanwhile, would it be too much to hope that the two halves of a newly split would be named Bwin and PartyGaming? Too soon? How about

Meanwhile, Boyd Gaming, which, along with MGM Resorts has teamed up with for US-facing online gambling opportunities, has shed a little more light on the joint venture. In a post-earnings call with analysts on Tuesday, Boyd CEO Keith Smith said the partners would offer online poker, slots and table games under both the PartyPoker and Borgata brands (Boyd and MGM are joint owners of Atlantic City’s Borgata casino). owns a 65% stake in the JV, with MGM holding 25% and Boyd the remaining 10%. Smith said the “contractual relationship” called for Bwin to provide “software to us and they will be paid a fee for providing that software infrastructure … if [] are able to launch their own product, they will do that. If that’s approved by the regulators. We will own kind of 10% of that business for our contractual relationship, and therefore, receive 10% of the profits of that business, if they’re able to open a separate US-based business. That could be in New Jersey or could be any other state in the US.” Boyd COO Paul Chakmak further clarified that “we have our JV relationship at the Borgata and Boyd will own the 10% interest in any B2C operation that launches.”


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