March 11, 2013

888 in U.S. joint venture with Avenue Capital

888 Holdings, the online gaming operator, has signed a joint venture in the US in preparation for the country’s expanding legalisation of internet gambling.

The UK operator of online poker, sport, casino and bingo games on Monday said that it had signed a deal with Avenue Capital Group, the investment firm, to form a new company called the All American Poker Network.

888 already has joint ventures with Caesars, the owner of four Atlantic City casinos, as well as a strategic deal with WMS, a gaming machine manufacturer, while rival has a partnership with MGM and Boyd Gaming.

888 said that the All American Poker Network would launch 888’s brands into the US market when Federal or state-based regulation is finalised and after licences are obtained.

Avenue Capital will provide the financial backing for the deal, although 888 declined to confirm the amount.

“This is the perfect deal for 888, providing the ideal platform through which to launch our business-to-customer brands into the US market, once regulated,” said Brian Mattingley, who added that the move “completed our online strategy”.

“The agreement sees a leading US financial institution backing one of the largest gaming platform operators in the world, joining forces to tackle a potentially huge market.”

Last month, New Jersey legislators passed a long-awaited bill legalising online gambling, following the lead of Delaware and Nevada.

The New Jersey bill, due to come into effect later this year, permits land-based casinos in the state to apply for licences to offer casino and poker games.

“Today’s news is a clear positive, although returns are reliant on final implementation of state online gaming,” said James Hollins, an analyst at Investec, who reiterated his “buy” recommendation on the stock.

888 on Monday also announced that it was poised to launch an online poker operation in Nevada after agreeing a deal with Treasure Island, a Las Vegas gaming group.

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