Shuffle Master pulls out of Ongame deal
Land-based gaming supplier withdraws from 19.5m acquisition of poker network " bwin.party to reopen talks with other interested parties.
The sale of bwin.party’s Ongame poker network to Shuffle Master has fallen through after the companies “mutually agreed” to cancel the deal, the London-listed business announced to the market this morning.
In a statement bwin.party reaffirmed its commitment to selling “surplus assets, including Ongame” and revealed that it is “re-engaging” with other companies which had previously shown an interest in acquiring the network.
A spokesman for bwin.party told eGaming Review this morning: “This doesn’t cause us concern, and we are confident that we can conclude a deal with an alternative third party.”
The reasons for Shuffle Master’s withdrawal from the deal are not yet fully clear, but eGR understands that it relates to the company’s concerns about the current economic situation in Europe and entering various markets when it has previously been almost exclusively US-focused.
This may relate to some of the network’s skins which operate in grey or unlicensed European markets, or in countries experiencing severe economic difficulties such as Greece, Spain and Italy.
The supplier is set to release a statement explaining its decision later today, though it is unknown whether it will reveal a revised strategy to offer online poker in the US. It also remains unclear whether the lack of an online poker offering will affect Shuffle Master’s Nevada license application. Both licensed US suppliers “ Bally Technologies and IGT “ can offer online poker with Bally acquiring Chiligaming’s iGaming Platform in February this year and believed to have partnered with Winamax alongside Golden Nugget to offer freeplay poker, and IGT buying the Entraction Poker network in May last year.
It also throws into doubt the partnership between Bally, Aristocrat Gaming and Shuffle Master, agreed earlier this month. The deal would have seen Ongame’s poker product offered on Bally’s iGaming Platform, with Aristocrat able to offer the network’s poker content to its land-based casino customers as part of its online games portfolio.
The 19.5 (£16.2m) acquisition was originally agreed in March this year after bwin.party announced its intention to sell Ongame in February 2011, ahead of the companies’ merger. In a statement released in June 2011 the operator stated that “any sale will be completed by the end of the year,” but this fell behind schedule.
At the time Shuffle Master CEO Gavin Isaacs explained: “Poker is a natural fit for our table-centric online offerings and our many jurisdictional licenses present a compelling opportunity for our current and future online customers.”
The deal included a provision which would have seen the acquisition price rise by “up to 10m in cash within five years of closing, contingent upon the commencement of legalised, real-money online poker in the US within such period,” though the 10m was to decrease each year of the five year period.
Bwin paid 474m to acquire the network in 2005, less than a year before the Unlawful Internet Gaming Enforcement Act (UIGEA) was introduced, forcing the company to withdraw from the US market in late 2006.
More to follow”¦