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Borgata – Pala Interactive Software Partnership Receives Preliminary New Jersey Approval

Atlantic City’s largest casino, the Borgata Hotel Casino & Spa, has received conditional approval to conduct online gambling transactions in partnership with California-based Pala Interactive, LLC.  The formal partnership involves the Borgata’s parent corporation, Marina District Development Company, LLC, and was approved by the New Jersey Division of Gaming Enforcement (DGE) on October 31st, 2014.

borgata-logoThe announcement of the temporary approval allows one or more Borgata-owned site, powered by Pala Interactive, to be added to the Borgata’s suite of online gambling and online poker sites available to New Jersey players.  The Borgata currently offers three such sites in partnership with Gibraltar-based bwin.party — www.Borgatacasino.com, www.Borgatapoker.com and www.NJ.Partypoker.com.  The names of the new site or sites to be offered in partnership with Pala Interactive, which is associated with California’s powerful tribal nation, have yet to be announced.

The temporary approval is for a six-month period, with repeatedly renewing six-month approvals likely issued until the final determination of Pala Interactive’s own application for an “internet casino service industry enterprise” license is, as widely expected, approved.

The announcement of the ruling, which was signed by DGE Director David Rebuck, marks the first time a US tribal nation has been approved (even in “conditional” form) for a software provider’s license connected to online gaming.  The Pala nation is one of California’s most influential tribes, operating a large casino outside San Diego, and the tribe is also a primary force in the controversial online-poker legislation repeatedly up for consideration in recent years in that state.  The Palas were one of several tribes, for example, stridently backing “bad actor” provisions in prior California legislation that sought to block the possibility of feared potential rival PokerStars from ever being licensed in that state.

Pala Interactive and its New Jersey approval is likely to generate significant controversy among the poker players who are the Borgata’s target audience.  A news story by AP New Jersey gambling beat writer Wayne Parry related that Pala Interactive founder and CEO James Ryan was indeed the former co-CEO of the Borgata’s other software partner, bwin.party, but omitted entirely Ryan’s pre-Party history, which included a stint as the CEO of the infamous, scandal-ridden UltimateBet site.  Ryan’s stint with UB lasted for several years and ended around February of 2007, with his departure and rapid move from UB to Party occurring under murky circumstances.  Ryan was initially recruited to UltimateBet to help that site’s parent company, Excapsa, launch an IPO on the London Stock Exchange.

While the Pala Interactive deal clearly exploited Ryan’s bwin.party connections to the Borgata, the New Jersey partnership as tentatively approved omits one other major news story involving the relevant parties.  The Borgata is currently involved in a major “edge sorting” lawsuit against Phil Ivey, who at last report from Pala Interactive was the company’s lead spokesman.

Unconfirmed industry reports compiled prior to this story’s publication suggest that Ivey and Pala Interactive have previously and very quietly parted ways, thereby freeing Pala Interactive to continue pursuit of the Borgata partnership without fear of legal complications.  Neither Pala Interactive nor any representatives of Phil Ivey have confirmed that split, though one well-known industry source commented on social media that Ivey himself may have instigated the split after claims of no-pay treatment from Pala.  The high-profile partnership had already been subject to some stress due to the failure of Pala and several partnering tribes to jam through their preferred online-poker bills during California’s 2014 general legislative session.

How the new offering shapes up will be interesting to see, and that “sight” includes literal visual connotations: Ryan and his business partners were widely rumored to have acquired working copies of the UltimateBet online poker source code prior to the company’s sale to and merger with Absolute Poker.  Remnants of the old UB software platform have repeatedly emerged amid offerings from unrelated companies, such as in the subscription-fee poker site ClubWPT.

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