Breaking news: bwin.party signs 10-year tribal Cali poker deal
Jim Ryan, co-CEO of bwin.party, tells eGaming Review he met with a number of "amazing" organisations but that United Auburn Indian Community had "best cultural fit".
bwin.party has strengthened its potential operating power in the US should state-by-state regulation pass by signing a 10-year B2B online poker deal with one of California’s largest and most influential native American tribes.
Bwin.party, one of Europe’s largest listed online gaming operators, announced this evening it had entered into a “formal agreement” with the United Auburn Indian Community (UAIC) to offer online poker services in California “if suitable intrastate legislation is enacted in the state”.
The UAIC owns and operates the Thunder Valley Casino Resort near Sacramento, California, a 200,000 square foot venue that opened in June 2003, offering slot machines, video gaming, and various table games. It is not, however, part of the California Online Poker Association (COPA), a consortium of around 60 tribes and card rooms that make up around 60% of the state’s poker revenues. In late June last year Playtech signed an initial play-for-fun poker software licensing deal with COPA and has since launched the Calshark website ahead of potential regulation.
As a federally recognised California Indian tribe that already operates a casino resort within the state, UAIC would be a qualified licence applicant under legislation proposed in the California State Senate and would secure and maintain the necessary licences to operate online poker services there. bwin.party would provide the technology and operations expertise to power the services plus related support. The agreement would be for a 10-year period from the date that online poker services are launched, a statement read.
On 24 February this year, Senators Rod Wright and Daryl Steinberg introduced legislation to regulate online gaming in California. The Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012 (SB 1463) proposes to regulate, license and tax internet poker within the state with a proposed 10% gross gaming revenue tax rate.
A number of bills have failed to pass in the state in the last few years, mainly due to the divisions that exist within California’s 100-plus native American tribes. California has the largest Native American population and largest number of distinct tribes of any US state. Two weeks ago, at the GiGSE conference in San Francisco, a number of tribal groups sent a strong message to local politicians suggesting there was a long way to go before they would be satisfied with the current proposals.
Jim Ryan, co-chief executive of bwin.party, told eGaming Review this evening that he and fellow co-CEO Norbert Teufelberger had met with a number of “amazing” organisations but that the Auburn community had the “best cultural fit” and that it is a “material player” in the California tribal framework.
“It’s not a question of ‘if’ regulation passes, it’s a question of ‘when’,” Ryan explained. “We’re expecting the Senate bill to go through Committee stage. There are suggestions of changes in order to find a compromise [that would suit all parties], but one has to get ready when regulation happens and we needed the best partner possible,” he added.
Last month eGR reported that Wright and Steinberg would amend and re-introduce a compromise bill in the coming weeks in a bid to appease a number of powerful tribal casinos and card rooms who, among other interested parties, have voiced their concerns over SB 1463, including the type of organisation that would be allowed to obtain a licence, and the cost of the licence fee itself. As a result several Californian policy makers are known to be preparing a series of responses to these objections with amendments and a compromise bill.
The bill was introduced stating that “eligible entities” would be entitled to apply for 10-year licences to offer online gambling, although this would be poker-only for the first two years.
A source close to the legislation told eGR at the time said that while it was a “give and take process”, Senator Wright’s primary concern is “what benefits the State of California”.
“Some of the folks are pitching amendments that only benefit them “ whether it’s to lower the licence fee or to extend the timeframe for the credit with respect of the fee,” the source said.
The legislative session in California ends on 31 August and if the bill has not been finalised and passed by that date it will have to begin the process again next year. Final amendments to the bill are likely to be announced towards the end of April, along with several non-contentious clarifications. “Some of these are easy fixes,” the source explained. “The main issues are where the bill’s authors are going to have to decide how far they are willing to go in terms of compromise.
Several tribal casinos have claimed licence eligibility should be strictly limited to tribes and licenced card clubs. As it stands the bill also allows for racetracks and advance-deposit wagering providers, which some tribes claim do not have a place in the online poker market.
It is thought this is an issue that Senator Wright is unlikely to budge on, and is he likely to argue that racetracks are currently the only entities experienced in taking online bets and that they need the funds to compete with “racinos” “ tracks in states that offer regulated gambling.
On 31 October last year bwin.party signed partnership agreements with MGM Resorts and Boyd Gaming to provide online poker in a future, federally regulated US market. MGM’s agreement would see bwin.party and the US casino group “jointly offer” online poker in the US should Congress pass enabling legislation currently being considered.
Boyd announced simultaneously that it had agreed to acquire a 10% stake in a new company that would offer online poker to US-based players under bwin.party’s brands, including PartyPoker. Boyd also entered a separate 15-year agreement to use bwin.party’s technology platform and associated services to offer online poker to US players under a brand developed by Boyd Gaming. Both agreements are again subject to enabling legislation at federal level.
David Keyser, Tribal chairman of UAIC added: “We see the legalisation of internet poker and other internet gaming as being inevitable. Having met with representatives from a number of different online gaming companies, bwin.party was our first choice as partner.
“With its unrivalled expertise in online poker, proven technology and player loyalty we are confident of being able to maximize the revenue opportunity from a regulated online poker market in California and to continue to enhance the long-term prosperity of our community,” he added.