Announcement of US Online Poker Strategy with MGM and Boydback
1 November 2011
bwin.party digital entertainment plc
(‘bwin.party’ or the ‘Group’)
Announcement of US Online Poker Strategy with MGM and Boyd
- Formation of B2C joint venture with MGM and Boyd
- 15-year B2B agreements with MGM and Boyd
- bwin.party to begin preliminary suitability review in Nevada
bwin.party is today pleased to announce a joint venture agreement and B2B agreements with MGM Resorts International (NYSE: MGM) and Boyd Gaming Corporation (NYSE: BYD) to offer real money online poker in the US should legislation and effective regulation and licensing be enacted. The agreement brings together two of the leading land-based gaming operators in the US with the world’s largest listed online gaming company and is central to bwin.party’s strategy to enter the US online poker market should it become possible to do so.
Several bills to regulate, license and tax online poker in the US have been introduced at both a federal and state level, each of which are at various stages in the political process. While there is no certainty that online poker legislation will be enacted in the US, bwin.party is preparing to enter into a preliminary suitability review in the State of Nevada.
The agreements with MGM and Boyd are subject to enabling legislation and regulatory approval and include the following elements:
1. Business-To-Consumer (‘B2C’) Joint Venture
In the event that suitable federal legislation for online poker is enacted in the US, bwin.party, MGM and Boyd will form a jointly-owned US-based company (‘Federal NewCo’) with bwin.party owning 65%, MGM owning 25% and Boyd owning 10%. MGM and Boyd will have representation on the Federal NewCo board. The funding required by Federal NewCo will be met by bwin.party, MGM and Boyd pro-rata with their respective shareholdings.
bwin.party will supply Federal NewCo with its primary online poker brands for use in the US - including PartyPoker and World Poker Tour. bwin.party will also supply a technologically-advanced and proven poker platform and all other required support services. The platform will offer players a safe, secure and fair gaming environment and will address problem and underage gambling as well as protect against other activities such as money laundering.
Should the US regulate online poker on a state-by-state basis, a stand-alone company will be established to develop each state opportunity (‘State NewCo’). The shareholders and shareholdings in a State NewCo may vary, depending on the state concerned and reflecting the contributions to be made by each shareholder. In addition to bwin.party, shareholders in a State Newco may include MGM, Boyd and other partners.
2. Business-to-Business (‘B2B’) Agreements
The Group will also enter into two separate, 15-year B2B agreements with MGM and Boyd that will enable them to offer real money online poker services under their own brands in the US using the bwin.party technology platform and associated services. Under the terms of these agreements both MGM and Boyd are exclusive to bwin.party and the Group will receive a share of the online poker revenue generated by those services.
3. Preliminary Suitability Review
bwin.party is preparing to enter into a preliminary suitability review with the Nevada Gaming Control Board in order to secure an advanced finding of suitability in anticipation of future US-facing real money poker opportunities.
Commenting on today’s announcement, Jim Ryan and Norbert Teufelberger, the Co-CEOs of bwin.party, said:
“Our strategy has been designed to address any and all legislative outcomes, whether federal or state-by-state. We are particularly excited to be working with MGM and Boyd. Combining their significant assets and regulatory expertise with the strength of our PartyPoker and World Poker Tour brands, all supported by our in-house technology, makes us perfectly positioned for any future opening of the US online poker market.”
Jim Murren, Chairman and CEO of MGM Resorts International, said:
"MGM has long been supportive of Federal legislation to strengthen UIGEA and provide the needed regulations and consumer protections for online poker. MGM is proud to have bwin.party as our partner as they have the assets and experience that, combined with our brands, can ensure a secure, fair and entertaining online poker experience.”
Keith Smith, President and CEO of Boyd Gaming, said:
“We believe the right approach to offering legal online poker in the United States is through a federal regulatory structure that ensures the games are conducted with the greatest possible integrity and security. Should Congress enact legislation to legalise Internet poker, this agreement will allow us to partner with the world’s most experienced and prestigious online operator to offer a secure, fair and entertaining experience for players in the United States.”
Details of bwin.party analyst and investor conference call: 14.30 (GMT)
Jim Ryan and Norbert Teufelberger, Co-Chief Executive Officers will host an analyst and investor conference call at 14.30 (GMT). To ensure access to the call, attendees should please confirm their attendance in advance by emailing Claire Brown at: firstname.lastname@example.org.
+44 (0) 203 003 2666
Replay (available for 1 week):
+44 (0) 208 196 1998
bwin.party digital entertainment plc
Peter Reynolds +44 (0) 20 7337 0100
John Shepherd +44 (0) 20 7337 0100
MGM Resorts International
Alan Feldman +1 702 650 6947
Boyd Gaming Corporation
Rob Meyne +1 702 792 7353
Notes for Editors
bwin.party digital entertainment plc is the world’s largest listed online gaming company, formed from the merger of bwin Interactive Entertainment AG and PartyGaming Plc on 31 March 2011. The Company is incorporated, licensed and regulated in Gibraltar and also holds online gaming licences in France and Italy. bwin.party operates www.PartyPoker.com, one of the world’s largest online poker networks, and owns the World Poker Tour, which is based in the U.S. bwin.party’s shares (LSE: BPTY) are a constituent member of the FTSE 250 Index and the FTSE4Good Index Series of companies that meet globally recognised corporate responsibility standards. For more information about bwin.party, please visit www.bwinparty.com.
About Boyd Gaming
Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 17 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana. Boyd Gaming press releases are available at www.prnewswire.com. Additional news and information on Boyd Gaming can be found at www.boydgaming.com.
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is one of the world's leading global hospitality companies, operating a peerless portfolio of destination resort brands, including Bellagio, MGM Grand, Mandalay Bay and The Mirage. The Company has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in three other properties in Nevada and Illinois. In addition, MGM holds a 51% interest in MGM China Holdings Limited, which owns the MGM Macau. The Company has been honoured with numerous awards and recognitions for its industry-leading Diversity Initiative, community philanthropy programs and commitment to sustainable development and operations. For more information about MGM Resorts International, please visit www.mgmresorts.com.