New Jersey DGE Approves GVC Holdings Online Gaming License
GVC Holdings received good news last week, as it was informed by the New Jersey Division of Gaming Enforcement (DGE) that the DGE’s investigation of GVC’s acquisition of bwin.party had concluded and that bwin.party can continue to operate in the state. Thus, despite some speed bumps, it appears that it is business as usual for bwin.party in New Jersey.
In a press release, GVC said:
As part of its preliminary investigation, DGE examined GVC’s business operations and concluded, “GVC and its individual qualifiers possess the requisite good character, honesty, and integrity should it file for a transactional waiver.” DGE determined that the New Jersey licenses held by bwin.party shall remain valid under GVC’s ownership and a transactional waiver is not needed in connection with existing New Jersey contracts. Additionally, DGE ordered the termination of the Monitoring Agreement under which bwin.party had been operating since the acquisition by GVC.
GVC’s CEO, Kenneth Alexander, also commented:
I am delighted the DGE has confirmed that GVC meets its stringent regulatory requirements and that bwin.party can continue to operate in New Jersey under its current licences. This is an important development for GVC and one that places the enlarged Group in a strong position should further regulated opportunities in the US arise. GVC has licences in over 14 countries and continues to seek further licences in markets as the regulatory framework evolves.
GVC acquired bwin.party last year after a highly publicized bidding war with 888 Holdings. It now controlled one of the state’s leading online poker networks (though to be fair, there were only two of them at the time), the Party Borgata Network. Bwin.party had previously partnered with the Borgata to launch BorgataPoker.com and nj.PartyPoker.com, the two sites that made up the network. The Party Borgata Network had been the leader in New Jersey for some time, but once WSOP.com and 888 decided to combined their liquidity, Party Borgata fell to second place (both have since been passed by PokerStars).
The problem GVC ran into, though, is that GVC did not have an online gaming license in New Jersey. Thus, in February, it applied for and was granted an operational waiver by the DGE which permitted bwin.party – now part of GVC – to continue to operate its online poker sites. But that was bwin.party. The DGE implemented a strict rule that GVC had to be completely hands off; nobody at bwin.party in New Jersey could have any contact with GVC. In the meantime, the DGE was investigating GVC to evaluate its suitability for a license.
Shortly thereafter, it appeared that the Borgata was making plans to move on from bwin.party and GVC in case GVC was not ultimately approved by the New Jersey DGE. It partnered with GAN, formerly known as the GameAccount Network, to add GAN’s “simulated gaming” (read: play money gambling) to its online offerings. In a press release, though, GAN also said that it could become the Borgata’s real money gaming partner if “certain conditions” were met. It was never specifically publically what these conditions were, but one might have assumed that they were approval of the Gan/Borgata deal by the New Jersey DGE and the green light from the Borgata itself.
On top of that, eGaming Review reported that Borgata had tabbed Pala Interactive to replace bwin.party as its real money online gaming partner. That replacement was to happen “by the end of the second quarter.” This would not have conflicted with the GAN deal, as GAN’s platform is “provider agnostic” and could accommodate Pala.
We are now two weeks away from the end of the second quarter and bwin.party is still the Borgata’s online gaming partner, so it remains to be seen if any change will be made. It sounds like things will remain the same and that Pala Interactive may have been a “plan B” of sorts.
While there wasn’t a serious amount of doubt that GVC would be approved by the DGE, there was still some question, primarily because GVC operates in a number of “grey” jurisdictions, countries in which online gaming isn’t explicitly illegal, but it’s not explicitly “legal,” either. In an interview with Gambling Insider in February, GVC CEO Kenneth Alexander said:
We don’t choose to operate in just grey markets. Wherever you can get a license, GVC gets the license. If there’s no licensing regime, then we will stay in that market and exploit that opportunity. To be fair, the market where we’ve made the biggest difference is probably Turkey. We’ve stayed in Turkey and others haven’t, but we’re not the biggest in Turkey and in the enlarged group Turkey’s going to be quite a small part of the overall revenues.
Interestingly, while GVC CEO Kenneth Alexander expressed his excitement over the DGE’s approval, he also hedged his emotional bets in the same interview, downplaying the significance of a New Jersey license:
I’m not confident we can compete credibly with PokerStars. We are applying for a New Jersey license. The idea would be to run the US business differently from BwinParty. It’s been losing a lot of money. The idea would be to take some cost out of the business and run it to break even. One of the issues BwinParty has had is that it’s tied itself in knots and relied a lot on the US business opening up, and obviously it hasn’t really opened up in the way they had hoped. That has damaged their business. The US is not a big part of our overall strategy.