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Party Poker owner bwin.party digital entertainment has agreed the sale of its Ongame online poker network to Nevada-licensed gaming supplier Shuffle Master for an intial €19.5m.
Shuffle Master, best known for its automatic card shuffling machines in land-based casinos, will make an additional payment of up to €10m in the event that regulated online poker gets underway in the US within five years of the deal being completed in the summer, subject to regulatory approvals. It has already applied for an online poker service provider licence from the Nevada Gaming Commission.
The management of the Stockholm-based business, which generated adjusted earnings before interest, tax, depreciation and amortisation of €0.04m in the second half of last year and had audited assets of €26.6m as of 30 June 2011, will transfer across as part of the deal.
bwin.party co-CEOs Jim Ryan (pictured left) and Norbert Teufelberger said the deal represented a significant step in the process of integrating the bwin and PartyGaming businesses which completed their merger in April last year onto one technology platform. “We believe Shuffle Master will be an excellent home for Ongame to maximise its future potential.”
The sale price represents a substantial discount on the €474m that bwin agreed to pay in March 2006 for the poker business which also owned then-thriving rooms PokerRoom.com, HoldemPoker.com and EuropePoker.com. The Austrian operator was forced to write-down the value of its acquisition just eight months later after passage of the Unlawful Internet Gambling Enforcement Act in October of that year forced its exit from the US market.
Ongame runs a open dot.com poker network and regional networks in France and Italy, with around 25 gaming brands operating poker rooms on the software platform, including Betfair, Betsson, Betsafe, EurosportBet and Paf. It is currently the fifth largest site/network measured in terms of cash player traffic (Source: PokerScout) but this is expected to fall by well over half when bwin.party completes the migration of the brands it owns onto the Party Poker platform. These include all bwin-branded rooms, Party Poker and GiocoDigitale in Italy.
A bwin spokesman first confirmed last February that the network was among the “surplus assets” mentioned in its merger prospectus, with the then newly merged group confirming in June of last year that a formal sale process for Ongame was underway.
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