888 Holdings Acquires Bwin.Party, Giving It “Virtual Monopoly” in US Online Gaming Industry
Last week, 888Holdings acquired Bwin.Party for $1.4 billion in US dollars. The acquisition gives 888 Holdings a firm grasp on the U.S. gaming market, given that it owns the sites for Caesars Atlantic City, Harrah’s Online, and now Borgata Online.
888 Holdings already was the only online poker operator to own licenses in New Jersey, Delaware, and Nevada. 888casino is likely to dominate the Nevada and Delaware gaming markets, because a “bad actor” clause is likely to keep PokerStars out of the Nevada gaming market for the foreseeable future. Of course, New Jersey’s poker market is much bigger than the combined Nevada/Delaware sites, despite the interstate compact between those two states.
Competing with PokerStars on Equal Footing
Industry experts believe the acquisition of Borgata’s online products gives 888 Holdings a chance to compete with PokerStars on more even terms, if that gaming operator is ever licensed to operate in New Jersey. At present, PokerStars’ application has been suspended for nearly 2 years by the Division of Gaming Enforcement, though rumors have swirled in recent months that the world top poker site might be approved as early as October 2015.
If so, PokerStars is going to face a poker network dominated by 888 Holdings. Since the rollout in November 2013, Borgata Online and its partner, Bwin.Party, has been the leader in the New Jersey gaming market. The Caesars Interactive line of casinos, supported by 888poker software, has been the consistent number two in the market. Now, numbers one and two are going to combine their player pool, creating a dominant product for the time being. Even when PokerStars is licensed, the Caesars/Borgata combination should be formidable.
Global Numbers Show PokerStars’ Dominance
PokerStars still holds a big advantage over 888 Holdings worldwide. PokerStars and FullTilt Poker, which is owned by Amaya Gaming, has a player pool 5 times the size of the 888 Holdings network. In the global market, no one comes close to Amaya Gaming’s brands, but the United States is another matter entirely. In the US, the decision by PokerStars to continue accepting US players after the UIGEA was passed is an albatross for the poker site. That decision led to the Black Friday scandal, which several US states have used (or are planning on using) to keep PokerStars out of their gaming markets. In the void that creates, 888 Holdings should be able to lead the market.
Amaya Gaming offered a similar bid to buy Bwin.Party, but the board of directors chose 888 Holdings. The exact details about the rival bids are not fully known, though the $1.4 billion price tag appears to be similar for both bids. No doubt, details will emerge in time why the 888 Holdings bid was better.
Better Marketing for New Jersey iGaming?
Due to the virtual monopoly held by 888 Holdings in the American gaming market, some analysts believe the company will make a more concerted effort to market their product in the United States. Up until now, few advertisements or special bonuses have been offered by 888 Holdings, so player signups have lagged behind expected totals.
Now, the gaming operator might believe that the investment of resources will be worthwhile. With the two biggest brand names in the New Jersey market and the only gaming interests of any size in Nevada and Delaware, the company might begin to attract more casual customers.
More Casual Players Needed
The US online gaming industry still faces serious challenges, though. Online poker requires a steady stream of casual players to make a card site successful. If the site only relies on professionals and regular players, then the competition is better and enthusiasm is lower. When casual players are logging onto a site, it leads to bigger prize pools in the big tournaments and more enthusiasm for the regulars, who see the new players as “fish”. The casual gambler influx also diffuses the gambling losses out over a larger population, assuring more revenue streams.