Exclusive: Intralot buys CyberArts stake for US market push

INTRALOT HAS ACQUIRED A 35% share in California-based online gaming software firm CyberArts to position itself for any future regulated egaming market in the United States, EGRMagazine.com can reveal exclusively.

Greek lottery systems supplier Intralot, which has also secured the right to take a majority stake in CyberArts, has aggressively pursued state lottery contracts in the US, and sees a partnership between its interactive arm, I^2, and CyberArts as a way into a future, regulated US market.

I² managing director Andreas Papoulias said: “The acquisition of a strategic stake in CyberArts is a significant step towards expanding the online gaming capabilities of the Intralot group in view of impending regulation in European and North American markets.”

Intralot has invested approximately US$12m in CyberArts for its 35% stake, with the option to increase this to 51% during the next year.

CyberArts chairman Ken Arnold (pictured) said: “The new partnership with Intralot caps an exciting year for CyberArts. I² is paving the way to the future of online gaming as a force for good in the highly regulated dot.country market.”

French lottery provider Francaise des Jeux (FDJ), for which CyberArts in May won the contract to run the French poker platform, also looked at acquiring CyberArts, but is understood only to have offered only around half the amount offered by Intralot.

The Intralot-CyberArts pairing is believed to be positioning itself to apply for a licence to operate intrastate online poker in California, which is currently considering legalising intrastate online poker under a specific exemption under the Unlawful Internet Gambling Enforcement Act (UIGEA) 2006.

In July, CyberArts threw down the gauntlet ahead of any tender process for the contract to rival GTech G2, owned by lottery rival and operator of the California lottery Lottomatica.

CyberArts already provides the poker platform for the first online poker operator to launch legally in Italy, Gioco Digitale, which was recently acquired by Bwin. Its experience operating in a regulated market with a national liquidity pool is likely to give it an advantage with California regulators, who are understood to be inclined toward a single hub model operated by a private company under contract with the state government should the online game be legalised in the state.

Melanie Brenner, president of Poker Voters of America, the California based lobby group pushing legalisation efforts in California and Florida, has consistently reiterated her belief a bill to enable intrastate poker in California will be passed in early 2010, most recently this week on the US regulatory panel at the EGR Live event in London.