PokerStars strategic master plan ticks every box

12th December 2012 6:55 am GMT
It is becoming increasingly clear to me that PokerStars owns poker. Oh, their marketing guys should love that line. But what other conclusion can one draw from the latest step in the PokerStars world domination plan? The news that Stars is seeking to acquire struggling New Jersey casino Atlantic Club Casino Hotel is just the latest in a series of big money acquisitions that will astound competitors who are probably getting used to being astounded. (Apologies if there is a tautology in there somewhere but you probably get the message.) Far from being locked out of the US due to its post-2006 operations, PokerStars is making sure that no stone goes unturned in its quest to return to the home of Texas Hold ‘Em. I am still fairly astounded by the lack of progress in many parts of the industry, but I am frequently astounded by the pace that the industry as a whole moves at. PokerStars’ phoenix-like rise from the ashes of Black Friday has been so phenomenal that it is almost impossible to remember the competitive landscape before April 15th, 2011. For about three years prior to that date, almost all of Stars’ (and Full Tilt’s) competitors moaned constantly about those operators’ illegal US operations and how it gave them unfair marketing muscle in Europe. Unfair marketing muscle?! Hmm... It also gave Stars a war chest that it is now set on splurging to make sure that it owns poker. It is understood the deal for Atlantic Club won’t go through until New Jersey governor Chris Christie signs off on the internet gaming bill in New Jersey. The bill grants New Jersey’s 12 licensed bricks and mortar casinos the right to launch online gaming operations - in partnership with a technology supplier if they desire. (It’s a regulatory regime similar to Belgium.... but bwin.party and friends don’t moan as much about this one.) The reported price of $50m doesn’t strike me as much for a foothold in the US’s first viable regulated market. (Nope, Nevada is not really viable.) However, Stars is merely ticking all the boxes. It has already managed to get New Jersey’s senators and assemblymen to amend the proposed legislation so that it does not exclude them. Previous language of the New Jersey bill denied “unlicensed operators” (translation: PokerStars and Full Tilt) a new NJ license “because they previously accepted Internet wagers within the United States without a license from the federal or a state government”. That got amended to:  “In the case of an application for licensure submitted by a prospective Internet gaming affiliate that is headquartered outside of the United States or that does significant business outside of the United States, as determined by the Division of Gaming Enforcement, the division shall consult with officials of the United States Department of Justice prior to making a recommendation to the Casino Control Commission regarding licensure of the applicant. "As part of their respective investigatory, licensing and oversight powers, the Division of Gaming Enforcement and Casino Control Commission shall review each applicant's past history and its asset utilization in the context of past and current Federal and State law and, following such review, may impose limitations and conditions upon the granting of the license and/or the utilization of its assets with respect to New Jersey operations." In a nutshell, Stars will get a chance to explain itself and its actions to regulators. It has already been given the green light by the DoJ via its spectacular settlement/acquisition of Full Tilt. That was the acquisition that got the ball rolling. Then came the London Hippodrome deal. Next up is NJ....then Nevada? It may not need it. However, Stars will know its next move already. As already stated, it is leaving no stone unturned. PokerStars didn’t need to sign the Friends of Norbert letter in Belgium because it has a license there via its deal with Circus Groupe. For a company that many regarded as a rogue operator as recently as March 2011, Stars has got a remarkable knack of working with regulators rather than against them. Just last week I spoke to one rival CEO, who could only sit and marvel at their strategic wisdom. This was a guy who had previously been hyper-critical of Stars’ US presence. “Stars chose a different route to us [not pulling out of the US] but when they did it [after the indictments], they did it with grace,” he said. Staying in the US after 2006 was just the first stroke of genius that has allowed Stars to stay ahead of the pack every single step of the way.sah@gamingintelligence.com
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