GVC Receives Temporary New Jersey Operator Approval
One of the major regulatory hurdles hanging over last year’s acquisition of struggling online-gambling company bwin.party by European b2b provider GVC Holdings appears on its way to a possible resolution, following the issuance of an operational waiver by the New Jersey Division of Gaming Enforcement (DGE) that will allow continuing business as usual.
DGE Director David G. Rebuck issued a ruling on Tuesday in rapid response to n application filed by GVC for such a temporary waiver last week, which will allow both GVC and New Jersey’s prominent Borgata Hotel Casino & Spa to continue reviewing their ongoing business relationship in light of the acquisition.
The need for a timely response in the matter also figured into the equation. On Monday, a UK Scheme Court Hearing gave its final operational approval of last year’s takeover, in the process allowing the much-expanded and leveraged GVC to be publicly listed on the London Stock Exchange. As one would expect, the new stock will be listed under the “GVC” symbol.
That UK stock-market approval was the impetus for the Nee Jersey applicatiion, as GVC clearly expected the approval was on the way while filing its January 28th waiver app with the DGE. However, that still left the Borgata’s side of the ongoing deal to be considered. The Borg was not necessarily unhappy with its previous relationship with bwin.party, despite bwin.party’s other trouble.
Anchored by the BorgataPoker and PartyPokerNJ sites, the Borgata has established itself (along with Caesars) as one of the two dominant players in New Jersey’s online-gambling market. Though that nascent market remains tiny and generates just a small fraction of advance revenue estimates, the Borg’s online offerings remain well-positioned for growth if and when the US gambling market continues its online expansion.
The Borgata, probably the most dominant player in the struggling Atlantic City “brick and mortar” casino market, must also consider the growing competition in its region. New Jersey’s legislators remain busy arguing for the expansion of land-based casinos in the state elsewhere beyond Atlantic City. Given that growing competitive threat, plus the increase of alternate casino destinations in neighboring states, it’s tough times all around for AC and its casinos.
It’s within that greater market struggle that the question of whether or not the Borg was going to continue its partnership with the bwin.party platform hangs. And with the UK approval of the GVC takeover pending, it’s been the topic of increasing industry chatter in recent weeks. Among the posibble complications was GVC’s market presence in several large “gray market” countries such as Russia, since New Jersey regulations forbid the state from giving formal approval to any company open operating in violation of the law in other jurisdictions.
However, GVC representative have reiterated their beliefs that GVC would sail through the DGE’s regulatory review process anyway. It should be noted that “gray market” is not necessarily “black market.” Russia in particular has vacillated several times regarding online gambling’s legality.
Rebuck’s DGE ruling allowing PartyPokerNJ.com and BorgataPoker.com to continue during GVC’s ongoing review still comes with a healthy caveat, however. For the time being, GVC will be operating under a communication embargo that forbids the company from offering “operational or management control or influence” over the two online sites. Thus, the two sites will operate as a complete turnkey operation for the near future. In the meantime, and depending on whether GVC’s chances for final DGE approval continue to grow, the Borgata itself can search quietly for a replacement software partner, should one eventually be needed.