Why 888 Acquisition of Bwin.Party is no Big Deal
A lot of attention has been paid to the acquisition of Bwin.Party by 888 Holdings, but what benefit – if any – will there be for online poker players?
Last Friday – and for most of the weekend – it was widely reported that 888 Holdings had made an agreement to purchase Bwin.Party for cash and share options worth £898 million ($1.4 billion). The deal is still subject to shareholder approval and the green light from various regulators, but likely to be sealed before the end of the year.
Some observers have written that the acquisition is great news for the poker industry because 888 Holdings will enable to reinvest its additional revenue into expanding the industry; however, this does not appear to be the aim of the acquisition according to analysts writing in Bloomberg and the NY Times.
Their view – which is supported by statements from the company chairmen – is that
the combined group is likely to be highly cash generative, potentially allowing for future shareholder returns and that the acquisition of Bwin.Party by 888 Holdings will
generate substantial financial synergies for the benefit of both sets of shareholders.
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Poker players don´t seem to get a mention at all!
Short Term Plans for the “New” Company
According to 888 Holding´s Chief Operation Officer – Itai Freiberger – it is going to be business as usual for the 888 Poker and Bwin.Party brands. Speaking to egrmagazine.com, Freiberger said that there were no plans to merge the brands or to scrap Bwin.Party’s
very strong, significant, legacy Party Poker brand.
What was noticeable in the EGR interview was that Freiberger said he was excited by the
mind-blowing opportunities for economies of scale. It has been estimated that the combining of the two company´s managements will save £50 million ($70 million) by the end of the 2018 financial year; but – according to Freiberger – the aim is to use this money to maximize shareholders return.
The only difference that players may see – and this is at least six months away – is that there will be more marketing for cross-over products. Players on Party Poker will see a wider range of opportunities to play bingo (more than are already available on Party Poker´s tables), while players on 888 Poker will be invited to check out Bwin´s fairly substantial sports book.
Will there be any Benefit for Poker Players?
So, with the shareholders of 888 Holdings and Bwin.Party benefitting from the cost savings and extra revenues, what benefit will there be to poker players? Where is the money coming from to reinvest into the poker industry? What difference will the acquisition of Bwin.Party by 888 Holdings make at all?
Well, there is one small group of poker players that could see a benefit from the acquisition of Bwin.Party by 888 Holdings, and that is the couple of hundred players that play on regulated poker sites in the US. Bwin.Party have previously been opposed to interstate compacts in New Jersey because they did not have any operations in Delaware or Nevada with whom to share databases. With that objection now out of the way, a three-way compact could be a possibility – benefitting players in Delaware and Nevada as well.
A combined Party/Borgata/WSOP/888 product would also provide suitable competition for PokerStars in New Jersey (if PokerStars ever gets given a license) and possibly prevent PokerStars from dominating the market as regulation expands across the US. This would be good for online poker in the US inasmuch as more competition between sites could result in more player benefits.
However, we are talking years into the future before any of this occurs – and then only for a small percentage of players that use the Party Poker or 888 Poker brands. For players in the rest of the world, there would appear to be no extra incentives or benefits planned – just adverts for bingo, and where´s the big deal in that?