With all the announcements of major casinos in the United States partnering up with European online sportsbooks, a smaller announcement made last week may have had a far more important impact on the regulated gaming market in the country. On Friday, the Mount Airy Casino in Pennsylvania announced a partnership with the Stars Group to offer online gaming to their players.
For those of you who aren’t up to speed on this, the Stars Group is the new name of Amaya Gaming, who purchased Poker Stars for 5 Billion dollars a few years ago. The company recently bought SkyBet, a UK sportsbook, and along with their casino software purchases, now have a fully integrated online gaming solution available to license. This new partnership announced on the heels of the extension of Stars’ deal with Resorts World Casino in Atlantic City, puts a stake in the hallowed gaming territory and announces the return of this giant. Let’s look at some of the implications of this deal>
Let Bygones be Bygones
We all remember the events of Black Friday in April 2011 and the effect they had on the online gambling world in the United States. On that day, the three poker sites that remained in the U.S. market were shut down by the Department of Justice, effectively bringing to a close the online poker industry in the country. PokerStars was by far the largest culprit in this, having spent the previous five years since the enactment of UIGEA to generate billions in revenue from American players. However, when the time came to reach a settlement with these firms, the DoJ was shocked to learn that Full Tilt Poker had none of the player funds left in their accounts. To avoid a massive scandal, the government turned to PokerStars. In reaching a settlement, Stars agreed to include in their fine the money needed to pay out the Full Tilt players, in return for the asset left behind by the company.
Well, it sure seems like we have decided that Stars behavior is water under the bridge. Even though they settled and paid a fine of over 750 million USD, many in the industry couldn’t imagine that any gaming commission in the U.S. would award them a license due to their “bad actor” status. New Jersey was the first to turn a blind eye, and if they do receive a license in Pennsylvania, it is safe to say that the precedent will have been set for other states to follow.
A full-service operation
Not only is the PokerStars brand going to be in play in Pennsylvania, but the company now offers a fully integrated solution to possible partners in the U.S. This is an interesting opportunity for operators to bring aboard one of the largest companies in the gaming space, even if their state only allows sports betting to start. The proposition of having a solution that can be fully integrated when and if casino and poker are legalized in a state has to be enticing to operators.
A strategy shift?
One thing that seems to be puzzling about these two announcements by the Stars Group is the size of the partners that have chosen them. These two properties are not very large, and this may be indicative of a backlash from the larger gaming properties. Stars have not won any business to date from top-tier casinos in newly regulated states, but with so much opportunity to generate revenue from smaller casinos across the country, it may simply be easier for the company to scoop up these clients in a market that is bound to be less competitive. These smaller casinos may be wowed by having the brand attached to their local casino, and that could be enough for Stars to win dozens of these deals.
Who owns the players?
This is a question that has been coming up more and more in these new sports betting deals. William Hill, for example, has their deals set up in a way that the data from any player that signs up for the sportsbook (especially online) is the property of the bookmaker rather than the casino operator. We suspect this is the deal Mount Airy signed up for as well, and if that is the case, then the casino really sheds any reason for branding the online gaming offering. We aren’t sure this is the best move for smaller casinos, as their data is going to be more valuable than their properties in the future.
Stars are back
Regardless of the type of deal that was struck with Mount Airy, this is a huge announcement for the regulated U.S. gaming market and will have ramifications that last for years. The other gaming software suppliers need to take heed of this deal and step up their efforts across the U.S. – Stars is back, and if their previous incarnation means anything, they are going to be a force to be reckoned with in the space.
We are thrilled to see the company back in some form and continue to hope for a day when everyone in the U.S. can play poker online again without issue. The Stars Group being licensed in New Jersey and Pennsylvania goes a long way to that becoming a reality and shows that everyone deserves a second chance.