GVC Holdings Receives Conditional Nevada Approval, PartyPoker Return to State Likely
Euro online-gambling giant GVC Holdings has received conditional approval from the Nevada Gaming Control Board (GCB) on several different fronts, including its application for an interactive gaming license that will likely mean the return of the PartyPoker brand to the state of Nevada.
The GCB addressed several matters involving GVC amid several hours of interviewing and testimony with a handful of GVC’s key executives, including its CEO, Kenneth Alexander, in the NGC’s May 8 bi-monthly business hearing. Despite some pointed moments in the questioning, GVC emerged from the hearing with a conditional approval for its Bwin.Party (USA) entity, which is the parent company of GVC’s US-facing PartyPoker operations. Those operations, to date, include only the company’s online-poker and -gambling offerings in conjunction with the MGM-owned Borgata in New Jersey.
MGM appears to be GVC’s pending Nevada casino partner as well, though GVC, through some of the brands it’s acquired in recent years, also has some business relationships with other Nevada casino entities. And in a related NGCB development, the Commission also granted conditional approval to GVC’s other major retail face, Ladbrokes Coral Group, as an intermediary company. That could presage GVC partnering with casinos to roll out, perhaps via the well-known Ladbrokes brand, something to rival the William Hill sportsbooks and kiosks now found across Nevada.
The process will be ongoing for GVC and its PartyPoker brand, which will have to apply for full and continuing licensure two years down the road. When it does arrive, however, it will return the Party brand to Nevada, which was last available to Nevada residents as a grey-market offering by the old PartyGaming. The US’s passage of the UIGEA (Unlawful Internet Gambling Enforcement Act) in late 2006 forced the then-UK-based company to yank its services from the States under fear of the literal extradition of its earlier executive team.
Those days are long past, and PartyPoker has gone through a couple of ownership changes since then. However, the issue with grey-market offerings emerged again during the May 8 hearing, though not in the way one might think. Over the past few years, GVC has grown via mergers and acquisitions from a mid-sized business-to-business provider to a major soup-to-nuts force; the company’s retail brands now include party, bwin, Ladbrokes, Coral, Gala, SportingBet, EuroBet and others. In the process, it acquired lots of continuing grey-market operations and has had to navigate an ongoing path towards a white-market existence, especially since white-market regulators frown on grey- or black-market operations conducted elsewhere.
That popped up in the recent GCB hearing, when the Commission’s three-member board, led in the matter by Terry Johnson, took Alexander and the other GVC execs to task for their ongoing presence in several markets, especially Turkey. In this instance, GVC acquired Ladbrokes’ shoddily-operated Turkey operations and took some length of time figuring out what to do before essentially walking away from the Europe-Asia border country entirely.
As the LVRJ reported, Alexander and the other GVC brass were slow to disassociate from some shady operations, including the falsifying of many Turkish-based credit-card transactions to hide their real purpose. Internal fraud was also rife. “People were actually stealing from you,” Johnson reportedly told Alexander. “They were defrauding you and because you were engaged in questionable activity, you were without much recourse to go after them because of what you yourself were doing as a company. … I’m actually surprised at the glossing over what has transpired with these payment transactions, particularly as it related to the essence of regulated gaming here in Nevada.”
Johnson also chastised Alexander in particular for dodging his executive responsibility, saying, “I’m at a loss to understand where exactly did the buck stop in the company if it didn’t stop with you, and why are we to be assured that going forward you’re going to be at the helm of this company in a different manner than what transpired over the past several years?”
Johnson indeed cast the dissenting vote in the 2-1 split decision on GVC’s approvals. Chairwoman Sandra Douglass Morgan and the board’s third member, Phil Katsaros, instead decided that GVC had done enough to merit the conditional approval.