888 Holdings, Amaya Gaming, and Playtech Each Want to Buy Bwin.Party Digital

Bwin.Party Digital Entertainment appears as if it is about to be sold and several of the top companies in the online gambling industry are lining up to become its next owner. 888 Holings, Amaya Gaming, and Playtech are all three rumored to be preparing to purchase Bwin.Party Group, which is one of the largest operators on the Internet.

Jason Ader Might Facilitate Purchase

The Bwin.Party sale might never happen. When the SpringOwl Asset Management hedge fund owner, Jason Ader, bought into Bwin.Party last year, that seemed to set up an eventual sale of the company to a rival in the industry. Despite many assumptions by Forbes and the Wall Street Journal, details of any bidding which has taken place has not been disclosed.

Such a sale would be huge news in the Internet gambling niche. Before it left the US market in 2006, PartyGaming was the most valuable online gambling company on Earth. Five years later, when the online poker and casino company marged with Bwin, it helped form the biggest online gambling company in the world. Bwin was a well-known sports betting business, so the two parts formed a complete whole.

Sports Betting Wing Is Key

It is the sports betting legacy by Bwin which makes Bwin.Party such a valuable asset to any potential ownership group. Behind only Bet365, Bwin.Party is one of the largest sports betting businesses in the world. According to some sources, Bwin.Party might have a bigger European customer base than Bet365, though its rival has a more global scope.

Amaya, 888, and Playtech’s Competition

Interestingly, Amaya Gaming is in a competition with 888 Holdings and Playtech to become a top player in the sports betting market. All three see that part of their international business profile as lacking, so they hope to complete the revenue-generating picture by purchasing Bwin.Party. If any did so, they could parlay that association into big money for their online casino and poker rooms by collecting a valuable player database. They could also drive customers back and forth from their various assets.

888 Holding’s Plans

Forbes recently reported that 888 Holdings, which owns 888 Poker and 888 Casino, is planning a straightforward buyout of Bwin.Party. So is Playtech, the Isle of Man gaming software company. Playtech is second only to Microgaming in the online gaming software industry, with hundreds of sites which they service.

Amaya Gaming Partnering with GVC Holdings?

Amaya Gaming, on the other hand, is trying to arrange a joint buyout alongside GVC Holdings. Amaya is said to be building a “special purpose vehicle controlled by GVC” that would allow GVC Holdings to own most of the company. Amaya Gaming, which bought PokerStars for $5 billion in August 2014, would be able to interface the PokerStars card playing community with the Bwin.Party sports betting community.

GVC, which is described as playing in the “gray markets”, has a history of such purchases. In 2013, GVC Holdings teamed with William Hill to buy Sportingbet. That purchase cost the companies $850 million. They split the operation, with William Hill collecting Sportingbet’s operations in Spain and Australia, while GVC collected all of the unregulated markets Sportingbet continued to collect revenues from.

Cherry-Picking Bwin.Party’s Assets

That would seem to be the plan between Amaya Gaming and GVC Holdings: buy the company and sell off its constituent parts. Like the purchase described above, the two companies likely would each take a portion of the business for their own interests.

On the other hand, the reference to a “special purpose vehicle” might indicate a different goal in mind for the Amaya/GVC pairing. Whichever of the three bids wins out, that company should become a major competitor in the international sports betting arena.