NJ licensing process prompts PartyGaming founders to divest shares31st October 2013 9:33 am GMT
PartyGaming co-founders Ruth Parasol and Russell DeLeon are to sell off their remaining stake in UK-listed bwin.party digital entertainment in order to help the operator secure a New Jersey online gaming licence.
As part of the application process set up by the New Jersey Division of Gaming Enforcement (DGE), certain individual shareholders of bwin.party would either be required to individually apply for a licence in the state or otherwise dispose of their shareholdings.
In a statement Thursday, bwin.party confirmed that following its application for a Casino Service Industry Enterprise Licence, both Parasol and DeLeon have opted to place their bwin.party shares into divestiture trusts as a result of their divorce and for reasons of privacy, and have entered into a divestiture agreement with both bwin.party and the DGE.
The agreement comes into force once bwin.party is granted a transactional waiver by the DGE, which would allow the company to offer its online gaming products in the state until its licence application is decided. At this time, each will place their respective 7.16 per cent stake into divestiture trusts, with the sale of the shares to begin from the day New Jersey opens its online gaming market.
Parasol currently owns 58,498,667 shares in bwin.party through her holding company Emerald Bay Limited, while DeLeon owns 58,498,666 shares through his Stinson Ridge holding company.
The shares will be divested over a period of up to 36 months. Parasol and DeLeon will have 24 months to divest of their shares. If the pair are unable to divest the full amount, bwin.party will then take control of the process for the final 12-month period.
While each stake is being divested, the trustees will be able to exercise voting rights, though their voting record is liable to be submitted to the DGE for review, and DeLeon is required to vote in the same manner as Parasol.
The pair have also agreed not to exercise their board nomination right, gained by all shareholders holding a director or indirect interest of 5 per cent or more of the operator’s share capital, as long as the divestiture arrangements remain in force. However, the nomination right has been retained, and can be awarded to a transferee acquiring a stake of at least 6 per cent in bwin.party.
The sale will mark the end of an era, with the pair the last of PartyGaming’s original staff to leave bwin.party. Parasol originally founded the company as Starluck Casino Online in 1997, with DeLeon joining in 2001, and continuing to serve as a consultant to the business until 2006.