PartyGaming And Bwin Merge In Preparations Of US Online Gambling
PartyGaming has had a rough relationship with the US when it comes to online gambling. With news that the US may regulate Internet gambling coming this week, PartyGaming has made an acquisition that could lead to re-entering the US market in the future.
PartyGaming announced plans to acquire Bwin Interactive Entertainment. The merger of the two company's creates the largest publicly traded online gambling company in the world. A company that big and with that much clout, would certainly be taken seriously should the US look to license gaming company's.
"From an industrial point of view this is both an offensive and a defensive move," said Gianmarco Bonacina, an analyst with Equita SIM in Milan, as reported by Bloomberg. "In Europe, Bwin and PartyGaming are losing market share in poker versus PokerStars and Full Tilt, so the combination will protect them. In the US, the move is offensive. They want to attack the market and are in a better position if they combine."
The House Finance Committee passed legislation on Wednesday that would regulate online gambling in the country. An amendment was also passed, however, that would eliminate any company's that have been in violation of current US laws from an opportunity to gain a license.
PartyGaming had a well-publicized legal battle with the US over online gambling that was being offered to US customers. Last year, PartyGaming settled their differences with the US in the hopes that if the laws change, they would be allowed back into the US market.
By merging with Bwin, PartyGaming will have all the resources needed to acquire a license. The two companies have been strong leader in ensuring that their online sites are free from underage and problem gambling. The companies are both already licensed in jurisdictions outside the US, and they would have a long list of referrals for the US government to call upon.
Shareholders still must sign off on the deal, and executives at both company's are strongly urging the shareholders to approve the merger. The shareholders would then receive shares in the joint company.
July 30, 2010
Posted By Terry Goodwin
Staff Editor, CasinoGamblingWeb.com
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