Shuffle Master agrees to buy Ongame for 19.5m
Poker network had been described as a "surplus asset" by previous owner bwin.party.
Land-based gaming supplier Shuffle Master has made its first move into the online poker market with the 19.5m (£16.2m) acquisition of the Ongame network from bwin.party.
The cost may be subject to increase if the United States market opens up in the next five years, with Shuffle Master set to pay “[U]p to 10 million in cash within five years of closing, contingent upon the commencement of legalized, real-money online poker in the U.S. within such period.
It notes that “The 10 million contingent payment decreases through the five-year period.”
Despite having the fifth-largest cash game liquidity of all poker rooms and networks worldwide, Ongame was written off as a “surplus asset” in anticipation of the completion of bwin’s merger with PartyGaming in March 2011.
Among the operators with poker offerings on the Ongame network are Sportingbet, Betsson and Betfair, while bwin’s offering – currently one of the larger skins on the network – is expected to join the PartyPoker network during 2012.
Bwin.party co-chief executive Jim Ryan had previously made clear the operator’s plans to bring together player bases from its bwin and PartyGaming brands by the middle of this year, and said in a statement: “The sale of Ongame represents a further significant step in our process of integrating bwin and PartyGaming and moving to a single technology platform.”
The sale sees the network’s value dip by more than 95% from the £474m which bwin paid in 2005, before it was forced to pull out of the US market following UIGEA.
It marks the second time in less than 12 months that a US land-based supplier has acquired an active European-facing network, following IGT’s acquisition and subsequent rebranding of Entraction, now known as the IGT poker network.
Shuffle Master chief executive Gavin Isaacs (pictured) said of the deal: “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 company is one of more than 20 applicants for Nevada egaming licences, applying for a service provider licence in the Silver State. In its first-quarter results yesterday it recorded a year-on-year revenue increase of 28% to US$56.1m (£35.5m), boosted by the strong performance of its electronic gaming machines.
Ongame, meanwhile, already operates in the regulated Italian and French markets, while it launched a Danish-facing poker room at the start of this year and has also applied for a licence in the newly regulating Spanish market.
Lou Castle, chief strategy officer for Shuffle Master, noted that the deal “Will permit us to begin immediately offering state-of-the-art B2B online products following the closing of the acquisition.”
Ongame’s managing director Peter Bertilsson said: “We believe that our experience and expertise in the European market is a natural fit with Shuffle Master’s considerable commitment and history in developing innovative games and products for land based operators.”
Bwin.party had first indicated that the Ongame network was likely to be sold in February last year, before confirming these plans four months later.
In that June 2011 statement the operator claimed: “We expect that any sale will be completed by the end of the year,” however these plans ended up falling behind schedule.
The acquisition remains subject to regulatory approvals, but is expected to close within nine months.