888 Holdings

888 Holdings Acquires Full Ownership in All-American Poker Network (AAPN)

888 Holdings Plc. has acquired total ownership in the All-American Poker Network (AAPN) and its parent company, AAPN Holdings LLC, in a $28 million cash-only deal. 888 Holdings was, prior to this pickup, a prominent minority owner of the AAPN, and now takes over sole responsibility of the small US-based network after acquiring the remaining 53% of the company from from its joint venture partner Avenue OLG Entertainment LLC, and a handful of smaller minority investors.

The deal calls for $10 million to be paid by 888 immediately, with the balance to paid to the other investors by the end of March 2019.

888 and Avenue joined together back in 2013 to form the AAPM amid a rose-tinted view that online poker would be formally authorized and regulated in handfuls of US states following its approval in Delaware, Nevada, and New Jersey. That expansion, as expected, has moved forward at a much slower pace. Only this year did Pennsylvania become the fourth state to officially authorize online poker, and that state’s new offerings won’t roll out until some time in 2019.

Meanwhile, the grandiose-sounding All-American Poker Network is the informal home to all of 888’s US-facing poker sites, even though it’s not truly a network in the sense of all those names sites sharing the moniker. In its original incarnation, the AAPN was launched in Nevada, with Treasure Island as its presumptive first skin.  AAPN sites (meaning those powered by 888’s software) are among those available in Delaware, Nevada, and New Jersey. Of those the New Jersey 888-branded offerings are the most robust.

According to a statement from 888 Holdings, the transaction “will give 888 independent control of its growth strategy in the US moving forward. This strategy includes signing new partnerships and continuing to deploy its proprietary products and technology (both B2B and B2C) in new states as they regulate.”

The statement also highlighted other 888 efforts to improve its toehold in the slowly growing US market in recent months, including:

  • In September launching 888sport in New Jersey alongside its established poker and casino brands, marking the first time that 888 has offered sports betting in the United States and paving the way for the Group to launch 888sport in additional US states as future regulation allows; and
  • Signing a landmark sponsorship agreement with the New York Jets of the National Football League (“NFL”), marking the first such agreement between an NFL team and a pure-play online gaming operator.

888’s Chief Executive, Itai Frieberger, said, “The acquisition of the remaining stake in AAPN is an important strategic step towards 888 achieving its exciting long-term potential in the US. Taking outright ownership of AAPN gives 888 additional operational, technological and commercial flexibility to develop innovative and exciting new partnerships and launch in new states – through both B2B and B2C channels – as and when future regulation allows. This acquisition places 888 in an even better position to take advantage of the significant growth opportunities in the US and create additional value for our shareholders.

“The AAPN joint venture has been a very successful endeavour for the Group. It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years whilst also investing in other global regulated markets. I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.”

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