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Trying to make sense of the Stateside deals frenzy

4th November 2011 9:26 am GMT

With so many deals cut and announcements made over the last week or two an update is needed on the state of play Stateside.

It’s useful to remind ourselves that we are no closer to regulation in the US but there is a bandwagon rolling and the combined might of the US casino industry has definitely swung behind the regulatory effort. In fact the deals that are being cut suggest a somewhat presumptuous attitude in the industry.

But the industry is talking the politicians’ talk. It was revealing that MGM boss Jim Murren talked of “strengthening UIGEA” in the announcement of his company’s deal with Boyd and bwin.party. Those words are taken directly from the mouth of Republican whip Senator Jon Kyl.

I’m pretty sure I’ve heard other industry bods parroting these words in recent weeks. It’s a sure sign that Kyl is seen as the key to getting any regulation passed.

The bwin.party-MGM-Boyd deal is just the latest in a series of movements that have revealed the online plans of some of the industry’s biggest stateside brands. A quick recap:

  • The COPA collective of California card rooms, casinos and Indian gaming groups rushed out its Calshark.com freeplay site with help from Playtech-Scientific Games JV Sciplay.
  • Sciplay rival GTECH G2 hit back with the announcement of a freeplay deal the Barona Band of Mission Indians.
  • Donald Trump said he’s just about to choose an online gaming partner.
  • Aristocrat and its online buddy GameAccount Network also signed freeplay deals with soon-to-be-opened Maryland Live! Casino and Island Resort & Casino in Harris, Michigan.
  • The Fertitta family, which developed Station Casinos and the Golden Nugget, launched its interactive arm with CyberArts despite Intralot dumping the Californian company because its technology wasn’t good enough.

Meanwhile, Caesars CFO Jonathan Halkyard sneaked out the news that it would develop its own site for the US, which would have come as a big blow to Dragonfish and Gamesys. Both have supplied the company with online technology to European markets (almost certainly at a loss) with a view to getting a crack at the US market.

And finally Foxwoods Development Company, the B2B arm of the Mashantucket Pequot tribe from Connecticut, is doing due diligence on its online partner with a view to providing an online operation to other Indian tribes across the US (and other commercial casinos).

This is quite an intriguing proposition for the lucky partner. Native American tribes are very distrustful of outsiders (rightfully given their history) and far more likely to trust one of their own. The native American gaming industry reaped $24.6bn in 2009. That’s more than double the revenues of Nevada’s casinos.

The casual observer would be forgiven for asking ‘who is left then?’

The answer would be ‘quite a lot actually’. Foxwoods is unlikely to tie up the entire native American market. There are about 300 tribes across the US with various levels of local brand recognition. Oklahoma (home to the Apache, Cherokee and Cheyenne tribes) is a $3bn industry on its own. Florida’s Seminole tribe (and its Hard Rock franchise) would be the prize catch but its position on internet gaming is unclear.

Aside from the tribes, the biggest names are Wynn Resorts and Las Vegas Sands. Steve Wynn jumped in bed with PokerStars before promptly dumping the company after Black Friday. Sands chairman and CEO Sheldon Adelson is the hardest nut to crack. He has moved from cold to lukewarm on the prospect of internet gambling. Both have huge operations in Macau and so are less reliant on US revenues but you have to presume they will need an online presence at some stage.

Then there’s the likes of Ameristar, Isle of Capri, Penn and Pinnacle Entertainment. And you never know, in some states the lotteries may even get a look in. Well...they have in DC.

So don’t worry. If you’re Intralot, Dragonfish, or Ongame there is still plenty to play for.

Disclaimer: This blog is not intended to be an exhaustive list of all casinos and suppliers that may or may not have an interest in internet poker in the US. It’s purpose is merely to entertain and maybe provoke the odd thought. Apologies to any absentees. Please feel free to get in touch and show me the error of my ways.

sah@gamingintelligence.com

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