MGM and Boyd Enter into Joint Venture With Bwin.party

MGM Resorts International and Boyd Gaming Corporation recently announced that the two companies would be collaborating with Bwin.party, a major player in the European online gambling industry. The three companies will be working together to create Internet poker rooms for U.S based users, providing online gaming is legalized in the United States some time soon.

According to the agreements, Bwin.party, MGM Resorts and Boyd Gaming would share ownership of a company that offers online poker to US based customers under brands owned by Bwin.party like PartyPoker. Boyd would own 10% of the venture; MGM Resorts would own 25% and Bwin.party would own the major share of the company (65%).

MGM Resorts and Boyd have separate long-term agreements that allow them to manage their own online poker rooms under their own brands while utilizing bwin.party’s gaming platform technology.

US Online Gaming Ban: Is Legalization Likely?

The agreements are dependent on the Congress passing a bill that legalizes USA online gaming and sets up policies for the taxation and regulation of online poker rooms. Two such bills have been introduced in the Congress. Insiders have speculated that the proposals might meet with favor with the ‘super committee’ formed by the House-Senate, which has been charged with finding ways to cut down the federal deficit.

Joint Venture Well Positioned if Online Gaming is Legalized

Carlo Santarelli, a gaming analyst for Deutsche Bank, told investors that MGM Resorts and Boyd are well positioned in the event that online gaming for real money is legalized. Bwin.party, thanks to the agreements, would have immediate access to U.S based gamblers once online gaming is legalized. Analysts estimate that the U.S market could potentially bring in revenues of $3-$5 million each year.

According to Bill Lerner of the Union Gaming Group, the joint venture company would take over more than 20% of the U.S market if given the opportunity. Bwin.party’s co-CEO, Jim Ryan said that the arrangements have been made in order to prepare for the next step. He said the companies were all laying a foundation for an important milestone in the industry. Ryan has since been referred to as the most powerful person in the world of poker.

CEO of Boyd Gaming, Keith Smith said that the new sites would all complement each other. Jim Ryan stated that Bwin.party intends to submit an application of suitability to the gaming regulators based in Nevada.

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