888 reveals US gaming joint venture
CEO Brian Mattingley calls deal "final piece in the jigsaw" for US strategy.
888 has entered into a joint venture agreement with investment firm Avenue Capital Group to offer a US-facing B2C gaming offering when regulation allows, while also officially confirming its deal with Las Vegas casino Treasure Island to offer poker in Nevada.
The newly formed, Delaware-incorporated company, called All American Poker Network (AAPN), will be used to launch 888’s gaming platform and brands into the US market, beginning in Nevada via a deal with Treasure Island which eGaming Review exclusively revealed last week.
888 already has an existing B2B agreement with Caesars Interactive Entertainment to supply software for a World Series of Poker-branded website in Nevada, and according to CEO Brian Mattingley, the JV with Avenue Capital now gives it the financial clout to push its B2C product as the rest of the US market opens up.
New York-based Avenue Capital Group has other interests in various terrestrial casinos and entertainment companies Mattingley said the JV deal was “perfect” for the Gibraltar-licensed operator as it provides the “ideal platform through which to launch our B2C brands into the US market, once regulated”.
“Our WSOP agreement with Caesars gives us an excellent B2B deal with one of the largest global gaming brands and most prominent casino operators, and we also have a strategic alliance with one of the largest gaming machine manufacturers in the world, WMS. We now have a significant financial partner for our leading B2C product – the final piece in the jigsaw, completing our US online strategy.
“The agreement sees a leading US financial institution backing one of the largest gaming platform operators in the world, joining forces to tackle a potential huge market. Working with a substantial financial partner provides the firepower that we need to take advantage of the significant opportunities that will be provided by a regulated US gaming market, and we are enormously excited by the opportunities that it will provide.”
888’s share price was up by more than 5% this morning, and Peel Hunt analyst Nick Batram said the JV with Avenue Capital “looks like a sensible deal and addresses some of the questions regarding the B2C opportunity in the US”.
“How far the US market ultimately opens remains uncertain. What is certain is that the market will be fiercely competitive, but 888 has given itself a good platform upon which to build,” he added.
Going live in Nevada became a reality last week when both 888 and its land-based partner received a recommendation for licensure in the Silver State. Both must now receive final approval from Nevada’s Gaming Commission before launching a real-money 888poker brand.
Under Nevada law only existing casino licensees can operate an online poker site, and according to one source, the deal will see 888 not only provide the software but also fund the licence fees and marketing costs, while paying Treasure Island 5% of future online poker revenues.