DraftKings $300 million FanDuel daily fantasy sports Robert Kraft

DraftKings is $300 million wealthier after a series of funding from investors including Fox Sports and Patriots owner Robert Kraft, a much-needed influx of capital to keep pace with the growing demand of daily fantasy sports. (Image: fantasysportsdaily.com)

DraftKings has received the investment is so desperately sought to keep pace with rival FanDuel, raising $300 million this week from financiers, primarily Fox Sports which paid $150 million in exchange for an 11 percent stake in the company.

Other backers include New England Patriots owner The Kraft Group, the National Hockey League, Major League Soccer, and several other sports-targeted enterprises.

Earlier this month Disney-owned ESPN had agreed in principle to a $500 million contract with DraftKings but backed out at the last minute.

Jason Robins, DraftKings CEO, said the investment and divvying of equity was a necessity to respond to the growing popularity of daily fantasy sports through developing new web and mobile products.

“You want to put your foot on the gas,” Robins said. “And that’s certainly what we’re doing right now.”

Fantasy Sports Patriots

The legality and differencing of daily sports betting from simply sports betting, a practice that is illegal in all but Nevada, New Jersey, Montana and Oregon, is a tad murky.

When the Unlawful Internet Gaming Enforcement Act of 2006 was passed, a law that banned online gambling, fantasy sports escaped prohibition through a loophole that declared the games as requiring skill, ultimately ruling that the model doesn’t constitute gambling. 

Proponents of legalized sports betting argue the same, that knowing which team to pick to cover the spread or line requires in-depth knowledge and isn’t the same as simply placing $20 on red.

Professional and amateur sports leagues have long disagreed, with the NCAA, NFL, NBA, NHL, and MLB suing New Jersey in 2012 when it motioned to legalize sports betting in its state.

At the time the lawsuit alleged that sports gambling threatens the “reputation and goodwill,” would “irreparably harm amateur and professional sports,” and “undermine the public’s faith and confidence in the character of amateur and professional team sports.”

But that notion seems to be changing with the revelation that the NHL and Major League Soccer are now invested in DraftKings.

Furthermore, having Robert Kraft owning not only a professional sports team but also partially a daily fantasy sports network seems to go against prior opinions of league executives.

Already not on good terms with NFL Commissioner Roger Goodell following the “Deflategate” scandal and subsequent four-game suspension of quarterback Tom Brady, Kraft might simply be adding a little fuel to the fire.

Dueling Kings

Daily fantasy sports has become big business, with FanDuel valued at $1.3 billion and DraftKings at $1 billion.

The two market leaders have seen their player databases more than double in the last two years, and revenues skyrocket with FanDuel saying it will award $2 billion in prizes in 2015, and DraftKings surpassing $1 billion.

Those sorts of income statements attracted the eyes of Yahoo, which launched its own platform in early July.

Christopher Vollmer, a PricewaterhouseCoopers media analyst told the Boston Globe that all daily fantasy operators are in a scramble to acquire the most players before the market becomes oversaturated.

“You don’t know when the music stops,” Vollmer said. “But it’s a good time now for all of them.”

Mohegan Sun Resorts Casino online gambling PokerStars

Mohegan Sun is using its relationship with Resorts Casino in Atlantic City to launch its own online gambling site in New Jersey, another strategic move by both Mohegan Sun and Resorts to grow revenues. (Image: Donald Kravitz/Getty Images)

Mohegan Sun received its licensing approval from New Jersey’s Division of Gaming Enforcement (DGE) this week, and the tribal operator wasted no time in launching its online site MoheganSunCasino.com, the 17th Internet gambling destination made available to residents of the Garden State.

With its tribal headquarters in Connecticut where it also owns its namesake casino, Mohegan Sun was able to fulfill New Jersey’s required partnering with a land-based casino through its 10 percent ownership and operational managing of the Resorts Casino; the first venue built on the famed Boardwalk. Mohegan Sun’s online destination offers 140 real money and fun money games, including 44 specially formatted for mobile devices.

Bobby Soper, president of the Mohegan Tribal Gaming Authority (MTGA), said in a press release, “Our goal is for MoheganSunCasino.com to become the premier online destination for both serious gamers and those who simply want to relax and have fun.”

Resorts Revels

Though online gambling in New Jersey got off to a slow start when it first launched in November 2013, the market has performed nicely in 2015. iGaming revenues were up 22.8 percent in June compared to 2014, and year-to-date the industry is up over 14 percent.

“We’re bullish on the potential,” Soper said regarding the future of Internet gambling.

Resorts Casino is bullish too, as it has skillfully aligned itself to perhaps profit more than any other brick-and-mortar casino in the country through the continued legalization of online gambling.

Though the oldest casino in Atlantic City, it was also one of the smallest and most outdated venues before Morris Bailey, a New York real estate mogul, bought the property in 2010 and invested $70 million in renovations.

For the first time since 2008, Resorts turned a profit in 2014, and its future looks bright considering it has secured a deal with PokerStars to bring the world’s largest online poker network to residents of Jersey, if DGE officials finally grant it a license. The general assumption is that PokerStars will be issued a license in the coming months.

Resorts has also created the first online gambling lounge in its physical casino, a 1,000-square-foot high-tech area that features 22 betting screens in what can only be described as an Internet betting bar. The goal, according to Resorts, is to attract the more traditional land-based gambler into trying a hand online.

PokerStars Impact

Bailey isn’t finished rejuvenating his resort, especially once New Jersey grants PokerStars its operating permit. David Baazov, CEO of Amaya, parent company to PokerStars, told investors in April he expects the online card room to enter the US market in the third quarter of 2015, meaning sometime before October.

When that occurs, Bailey says he’ll build an entire PokerStars room at the Resorts Casino. “We will be building a world-class poker room and they will bring many of their worldwide tournaments to Atlantic City.”

Bailey believes PokerStars could single handedly double the iPoker market in New Jersey as it’s “still in its infancy.” Considering online poker was responsible for just $1.8 million out of June’s $11.7 million total internet gaming take, that would be a welcomed notion for poker players in online rooms.

Sheldon Adelson RAWA lobbyist Squire Patton Boggs' Trent Lott

Upping the ante by lobbying up, billionaire casino mogul Sheldon Adelson has hired one of the leading lobbying firms in DC to push the Restoration of America’s Wire Act. (Image: Reuters/Vivek Prakash)

Sheldon Adelson has been pushing current lawmakers to support the Restoration of America’s Wire Act (RAWA) for nearly 16 months, but with little support being garnered in either the House or Senate, the billionaire casino tycoon is headed to K Street, the epicenter of the Washington, DC, lobbying industry.

In disclosures filed on Tuesday, the Coalition to Stop Internet Gambling revealed it has hired the firm of Squire Patton Boggs to lobby on its behalf, specifically House Resolution 707, “a bill to restore long-standing United States policy that the Wire Act prohibits all forms of Internet gambling.”

The filing identifies former Senate Majority Leader Trent Lott (R-Mississippi) and former Sen. John Breaux (D-Louisiana) as lobbyists along with Squire Patton Boggs Partner Matthew Cutts and three additional public policy advisors.

Lott served in the US Senate for 19 years before resigning in 2007 after the Honest Leadership and Government Act was passed, a law that prevented politicians from lobbying for two years after leaving office.

Though he said the legislation had no substantial influence in his resignation, Lott wasted no time in forming a lobbying firm just 20 days after his departure from Congress.

Restoring RAWA

Sheldon Adelson is worth $30 billion thanks to his Las Vegas Sands casino resorts empire, and he’s determined to make online gambling illegal at a cost of “whatever it takes.” Though neither his company nor himself is publicly identified as a member of the Coalition to Stop Internet Gambling, his bankroll is funding the non-profit organization whose mission is to outlaw online betting.

Current 2016 presidential candidate Sen. Lindsey Graham (R-South Carolina) and Rep. Jason Chaffetz (R-Utah) introduced identical RAWA bills into their respective chambers on March 26, 2014.

Since then, the bills have been read and discussed, with Chaffetz even holding a public hearing on the issue through the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations.

Following a year of stalemate, Graham reintroduced RAWA along with co-sponsor Sen. Marco Rubio (R-Florida), another 2016 candidate.

RAWA would reverse a 2011 opinion made by the US Department of Justice that says the Wire Act only applies to online sports betting, and not online casinos. The decision ultimately gave states like Nevada, New Jersey and Delaware a gateway to legalization.

But by and large, the Internet gambling debate has largely been confined to those who have vested interest in seeing its passage. Lawmakers not directly linked to Adelson or the gambling industry seem hesitant if not dismissive on debating such a bill.

What’s in it for Lindsey, Rubio, and Chaffetz? The backing of the GOP’s grandest financial supporter who spent a staggering $92.8 million during the 2012 election cycle.

Squirrel Gets The Squire

Adelson is involved with dozens of political action committees and causes, but banning Internet casinos seems to be atop his list of to-dos.

Following his pledge in 2013 to use his fortune to combat the iGambling industry, Adelson has gone through several lobbying firms in DC before hiring Squire Patton Boggs.

Having Lott fight for RAWA, a man who certainly knows the ins and outs of Congress, could pay off.

Working for international companies such as Amazon, General Electric and Citgo Petroleum, Squire’s lobbying efforts brought in $31,570,000 last year alone. According to most reports, the group is one of the top two most powerful firms in Washington.

A seemingly perfect fit for perhaps the most powerful man in the gambling industry.

WSOP online bracelet World Series of Poker event #64 WSOP.com

For the first time in its 46-year history, a WSOP online bracelet will be awarded, but the concept and format isn’t popular among everyone at poker’s marquee tournament. (Image: wsop.com)

The WSOP online bracelet, event #64, is just one of the many highlights for the 46th annual tournament in what is shaping up to be a historic year.

Not only did the World Series of Poker obliterate the all-time single event record for the total number of entries with 22,374 $565 buy-ins for the new Colossus, poker’s biggest convention is also making history by holding its first-ever bracelet contested entirely (mostly) online.

Originally scheduled to take place exclusively online until heads-up play where the final two would meet face-to-face at the Rio, the WSOP altered the format to live play for the final six.

The six-handed table was also pushed back from July 3rd to the July 4th Independence Day holiday, presumably to allow sufficient travel time for the competitors, and conclude the event on a day most have off from work and school.

“Now more than ever, the WSOP has something for everyone,” Ty Stewart, WSOP executive director said when the official tournament schedule was released. “And with this schedule we believe the value and the opportunity for player success exists in each and every event we are offering in 2015.”

Event Structure

The first-ever WSOP online bracelet event kicked off today at 12 noon local time with each player anteing up the $1,000 buy-in for 10,000 chips, with late registration concluding at 3 PM.

Play will continue throughout the day and likely into the early hours of tomorrow until only six players remain.

Once the secret six are identified, play will break until July 4th at 12 PM when the players reconvene at the final table for live play at the Rio.

The remaining six will carry over their balances to offline play, and the game will pick up at its respective level, although with a slight modification to the ongoing structure.

All levels for the final six will last 40 minutes, with breaks after every three levels.

One side note for any potential WSOP.com player reading: there will be no dinner break should the final table go on into the evening and night, so eat a full breakfast and early lunch!

Alternate Ending

Why not keep the entire online event, well, online? According to Bill Rini, head of online poker for WSOP, part of the overall experience and allure of the World Series of Poker is the winner’s photo op proudly holding their bracelet following the win.

But not everyone is in favor of basically switching the format from an online to live event at arguably the most crucial time of the contest. “I don’t think a bracelet should be awarded for this event because the WSOP has history behind it, it’s a poker series played at the casino where all you need is a ‘chip and a chair’ as they say,” Trevor Pope insisted, winner of the 2013 WSOP $5,000 No Limit Hold’em Eight-Handed event.

Some critics are skeptical, perhaps rightfully so, that the event isn’t marking the first time a bracelet has ever been contested online, but also the first time an event has basically switched formats mid-action, like a football game concluding with a fourth quarter of baseball.

But like it or not, online poker is how the game can grow exponentially, and one big name already in the field is none other than Greg Merson, the 2012 Main Event champ.

 

 

PPA John Pappas California testimony Sen. Lindsey Graham RAWA

PPA director John Pappas testified before the California GO Committee this week on the need for iPoker regulation, while Sen. Lindsey Graham is trying to ban Internet gaming on the federal level. (Image: allwebsolutions.net)

The Poker Players Alliance (PPA) took its case to the California General Assembly Governmental Organization Committee on Wednesday to highlight the need for state lawmakers to legalize and regulate online poker.

Speaking in front of Adam Gray (D-District 21), the committee’s chairman and author of AB431, one of four bills that would authorize Internet poker in California, PPA Executive Director John Pappas advocated for an iGaming overhaul in the Golden State.

“Now is the time for the legislature to regulate Internet poker,” Pappas testified. “Any effort to regulate Internet poker should not be viewed as an expansion of gambling in California, but rather as an opportunity to better protect consumers.”

California Dreaming

All eyes in the gambling world are fixated on California as networks, coalitions, and advocacies are speaking out in support of online poker.

Amaya and PokerStars have launched Californians for Responsible iPoker along with two Mission Indian tribes and three of the most profitable card rooms in the state, and the world’s largest Internet poker network is also sending its brand ambassadors Daniel Negreanu, Chris Moneymaker, and Vanessa Selbst on a statewide tour.

It’s evident the coalition and PPA both believe 2015 is their best chance for legalizing online poker.

“Anyone who suggests that regulation of Internet poker is not possible is purposefully misleading this Committee,” Pappas attested. “Lawmakers should legislate, regulators should regulate and the players just want to play.”

RAWA Insta-Graham

While California deliberated over legalizing online poker, one of the GOPs most recent 2016 presidential candidates, Senator Lindsey Graham (R-South Carolina), decided it was an opportune time to reintroduce the Restoration of America’s Wire Act (RAWA) into his federal chamber.

Of course, the timing is being highly criticized by many considering just one week ago a 21-year-old killed nine people inside the historic Emanuel African Methodist Episcopal Church in Charleston, South Carolina.

RAWA seeks to restore the Wire Act to its pre-2011 interpretation and ban Internet gaming on a federal level, a bill that’s largely thought to be driven by Sheldon Adelson, a billionaire Las Vegas casino tycoon who is a reliable supporter of the Republican Party.

Graham has been a longtime ally of Adelson, and his recent presidential announcement paired with him reintroducing RAWA amidst his state in mourning paints a rather ugly political picture according to the PPA.

“As the eyes of the nation are focused on South Carolina following the recent tragic event, I think I speak for most Americans when I express profound disappointment in Senator Graham for choosing this time to advance a bill for the sole benefit of a billionaire political donor,” Pappas said in a press release.

“The Congress made the decision to adjourn early so they could attend services on Friday in Senator Graham’s home state. Unfortunately, Senator Graham has not reset his priorities,” Pappas declared.

RAWA has been tossed around in both the Senate and House over the last year but with little progress. The House Subcommittee on Crime, Terrorism, Homeland Security and Investigations held a much-publicized hearing last March, but the largely one-sided testimony from experts invited by Jason Chaffetz (R-Utah), the representative who brought RAWA to the House, was largely discredited.

 

Pennsylvania Senate hearing testimony online gambling

The committee on Community, Economic & Recreational Development heard testimony this week relating to online gambling as the Pennsylvania Senate considers passing such legislation. (Image: paonlinecasino.com)

The Pennsylvania Senate committee on the Community, Economic & Recreational Development spent more than two hours on Wednesday listening to experts deliver testimony on Internet gambling, providing insight on an array of topics including the timeframe for implementation and the market’s fiscal potential.

Chaired by State Senator Kim Ward (R-District 39), whose SB 900 is the leading piece of legislation on the table, the panel invited representatives from the Pennsylvania Gaming Control Board (PGCB) and Department of Drug and Alcohol Programs (DDAP), as well as Todd Mostoller, executive director of Pennsylvania’s Horsemen’s Benevolent and Protective Association.

And while the conversation was long, nothing was said that would seem to hamper an impending vote on Ward’s proposition.

SB 900 would permit current land-based casinos to apply for and buy online gaming licenses, and offer slot machines in off-track and satellite locations.

Hearing Highlights

It can often be challenging to create a highlight reel of any political hearing as you often find even those in attendance fighting the urge to drift into dreamland sitting behind those testifying, but Pennsylvania’s wish to create an online gambling market provided plenty of headline making-comments.

Speaking first, Kevin O’Toole, executive director of the PGCB, told the committee that should the General Assembly pass online gambling legislation, his board is “anticipating a range of between nine and 12 months to actually begin the play on the Internet.” That’s relatively fast by most estimates considering the licensing application process seen in other states with legalized iGaming.

O’Toole also requested that Ward and her bill’s co-sponsors consider adding a clause to allow interstate agreements, granting Pennsylvania the potential to share player liquidity with New Jersey, Delaware, and Nevada.

Kevin Kline, the director of racetrack gaming for the PGCB, said he does not believe online gambling would have any significant impact on the horse racing industry. “Advance deposit wagering on horse racing and iGaming may be able to complement each other by advertising or including a link on each respective website providing an opportunity to cross-market,” Kline said during his testimony.

But Mostoller disagrees, saying the Equine Coalition has strong concerns relating to SB 900, primary the expansion of slots to non-primary locations and the legalization of online gaming, two conditions that would cannibalize his industry.

“Instead of slots play occurring at existing facilities, the introduction of non-primary locations will merely disperse gambling wagers over at larger geographic area, decreasing the slots play at the Category 1 facilities, which is the main source of funding for our racing purses and breeder incentives.”

Cry Wolf

Pennsylvania has a $1.2 billion budget shortfall, but Republicans, who currently control both the state’s House of Representatives and Senate, is adamantly opposed to Governor Tom Wolf’s plan to raise taxes in order to combat the deficit.

While many covering the political climate in Harrisburg have speculated GOP lawmakers want to pitch iGambling as a saving grace, Ward adamantly denies that claim.

“Right now we’re working on a budget in the Senate that does not include any money from gaming,” Ward said after the hearing.

How much does the state stand to gain from online gambling? It’s a tough market to forecast, but Ward’s bill does come with heavy fees for operators that could equate to $260 million, and with revenues being taxed at an astronomical rate of 54 percent, potentially millions more per year.

King of Instagram Dan Bilzerian White House 2016 high-stakes poker

“King of Instagram” Dan Bilzerian is banned from at least one nightclub and has a rap sheet as long as a bill in Congress, but that isn’t stopping the former poker pro from trying his hand at a run for the White House. (Image: socialmention.com)

Dan Bilzerian is the “King of Instagram” per his own accord, and although he’s never held any sort of political office, the playboy has his eyes set on becoming the king of the United States.

While he’s identified as a Republican in the past, it’s unclear whether he will run as an independent, Democrat, GOPer, or perhaps some new party only Dan Bilzerian knows about.

Notorious for his outrageous social media posts featuring busty nude women or barely-there attire, the 34-year-old trust fund baby has claimed to have won millions of dollars playing poker but has just one official cash tournament result to his name, the 2009 World Series of Poker Main Event where he placed 180th for $36,626.

A staunch supporter of anything that fires or explodes, Bilzerian has seemingly been more interested in guns, bombs, and his “sexual philanthropy” over the last several years than anything even remotely related to governmental policy.

According to Bilzerian16.com, his official presidential campaign launch party will be held June 24th at the Marquee NYC club, with tickets ranging from $40 for females, $55 for males, and custom packages running up to $10,000.

Swift Vetting

While nearly every serious presidential candidate is vetted by his or her respected party long before they became anywhere close to receiving the ticket, Bilzerian doesn’t appear to have much, if anything, to hide.

On a daily basis, he pours his women out on his social media channels and shows off his adult toys including yachts, private jets, houses, cars, firearms, and more.

If there’s something more scandalous to his lifestyle than he’s currently revealing, that very well might be the most shocking revelation from Bilzerian’s promiscuous existence in recent years.

As other candidates like Hillary Clinton is being investigated to discover whether she used a private email server and Mike Huckabee is being questioned about his relationship with the Duggar family, Bilzerian is posting videos of himself throwing a porn star off a roof, kicking a model in the face at a Miami club, and getting arrested for possessing bomb-making supplies in Los Angeles.

Socially Awkward

Though today many politicians devote considerable time to increasing their social media presence and getting out their message, Bilzerian’s massive following online has resonated with his millions of followers, but that likely won’t be the case with the majority of voters.

A self-described “Actor, Astronaut, Asshole” on his website bio, Dan might be two of those things, but there’s little evidence to suggest NASA has ever employed the party animal.

Once a high-stakes poker player that participated in private VIP games, Bilzerian would be the first and only presidential candidate fully in support of legalizing online poker.

That might win over a few votes among the gambling faithful, as would his strong pro-gun views among National Rifle Association, a resolute supporter of the GOP.

Unfortunately, his positions on economics, foreign policy, national security, healthcare, climate change, faith, civil liberties, taxes, education, abortion, and more remain unclear. But one thing is transparent, and that is Bilzerian doesn’t care what you think.

Earlier this month he posted about Bruce, aka Caitlyn Jenner, “I can’t read anything in my news feed other than Bruce Jenner got a sex change, & everyone’s opinion on it, like I give a (expletive) what u think.”

Pennsylvania iGaming online gambling Hollywood Casino

The Hollywood Casino wants Pennsylvania iGaming legalized, and that might soon very well happen after four senators said they plan to amend the current gaming law. (Image: pngaming.com)

Legalized Pennsylvania iGaming has three current bills on the table from three different state representatives, but a group of senators believe their colleagues are going about it the wrong way.

Four state senators have united to bring online gambling to the Keystone State in a more expedited manner by amending the current law, the Pennsylvania Race Hose Development and Gaming Act.

State Senator Kim Ward (R-District 39), Sen. Robert Tomlinson (R-District 6), Sen. Elder Vogel (R-District 47), and Sen. Joseph Scarnati III (R-District 25) filed a memorandum on Wednesday saying they will introduce a series of amendments to the current gaming and horse racing law that would drastically overhaul gambling.

“These enhancements and reforms are reflective of the challenges faced both in establishing and maintaining the viability of the Pennsylvania gaming industry in an increasingly competitive environment,” the senators say in their release. “This proposed legislation is meant to ensure a healthy and vibrant business atmosphere for Pennsylvania’s gaming industry, while maximizing gaming revenue and the positive economic impact of gaming in the Commonwealth.”

Last but Not Least

The memo released by the senators lists five specific areas of revisions, and while the first four relate to slot machines and operating hours for serving alcohol, it’s the fifth point that is sure to stir up the pot:

“Existing Pennsylvania casinos that offer slot machine and table games would be eligible to offer Internet gaming to individual patrons that have registered and established an Internet gaming account and are physically present in the Commonwealth of Pennsylvania while playing online.”

That’s quite the bombshell following four paragraphs of otherwise humdrum language, and will likely awaken the other 46 state senators from their slumber as they’re reading, assuming they are actually looking over the memorandum.

To combat anticipated kneejerk opposition, Ward, Tomlinson, Vogel and Scarnati are mandating that the Pennsylvania Gaming Control Board and Department of Drug and Alcohol Programs work together to develop safeguards tailored to preventing problem and compulsive gambling stemming from Internet gaming.

Pennsylvania’s Hollywood

Since online gambling operators will need to have a partnership in place with a land-based Pennsylvania casino, major poker networks like PokerStars and bwin.party won’t be focusing on venues in Philadelphia or Pittsburgh, but Grantville.

Located just northeast of the state capital of Harrisburg, Grantville is home to the Penn National racecourse and Hollywood Casino, one of the most profitable gambling establishments in Pennsylvania and yet still unattached in regards to iGaming. Penn National executive Eric Shippers told the House Gaming Oversight Committee last month that Internet gaming is “vital” to the future of the industry.

In anticipation of legislation, many casinos have secured deals with software and Internet gaming companies, but one that hasn’t? The Sands Casino Resort Bethlehem, owned by Sheldon Adelson, online poker’s biggest antagonist and leading pusher of the Restoration of America’s Wire Act.

As discussions continue in Harrisburg, those in favor of Internet gaming will hold their breaths as they await specific language and details on the senate co-sponsored amendments.

 East Coast Gaming Congress online gambling growth Sheldon Adelson

New Jersey State Sen. Ray Lesniak said at the East Coast Gaming Congress this week that online gambling’s toughest hurdle is that of Las Vegas casino magnate Sheldon Adelson. (Image: Patti Sapone/The Star-Ledger)

The East Coast Gaming Congress’ 19th annual convention began with a one-day packed schedule discussing the challenges and opportunities regarding online gambling and setting out a roadmap for the future.

Held at the Borgata Hotel Casino & Spa in Atlantic City, speakers and panelists included a wide array of individuals involved in the industry, from politicians and lawyers to casinos and Internet operators.

And if anything was learned from the four sessions, it’s that the overall health of iGaming is improving, and its potential upswing has no limits.

“We likened the rollout of New Jersey to the process of birthing a baby,” Eugene Johnson, senior vice president of Spectrum Gaming Group said as he moderated the discussion iGaming at 1.5: Baby Steps. “Now that baby is starting to toddle.”

Slowly but Surely

By all accords, online gaming in the three states with legalized Internet poker or casino gameplay has struggled, with Morgan Stanley recently slashing its valuation on the potential market from its initial estimate of $5 billion to nearly half at just $2.7 billion. “We continue to believe that there is a material runway for growth, but results have been disappointing,” Morgan Stanley’s report said.

But that “material runway for growth” has already been laid down, and the expansion is imminent, at least according to those in attendance at the East Coast Gaming Congress.

“The biggest challenge of Internet gambling in the US is that this is an industry still looked at as having been born out of sin,” Gil White, outside counsel to 888 Holdings said during the Roadmap for the Future discussion. “The new world of Internet gambling is clearly regulated and regulatable.”

Panelists identified culprits for the slow rollout, including technical glitches stemming from geolocation technology, and the resistance of financial transactions being approved by Visa due to liability concerns.

With a new online gambling merchant code in place, successful Visa transaction rates are now around 50 percent, more than double since its infancy.

With hiccups being addressed and resolved, and several key states considering legislation, including both California and Pennsylvania, many insiders feel online gambling is ripe for growth.

The $30 Billion-Dollar Question

While those in Atlantic City are bolstering the industry in which many of them serve, a dark cloud looms over the Borgata in the way of Sheldon Adelson, online gaming’s most financially strong and active foe.

The man worth a give or take $30 billion is using his political clout to push the Restoration of America’s Wire Act, a bill that would create iGaming prohibition.

“The biggest problem is Sheldon Adelson,” New Jersey State Senator Ray Lesniak (D-Union) said Wednesday. “When a billionaire says he’ll spend whatever it costs to stop Internet gambling, that scares the bejesus out of legislators.”

However, Adelson might soon have more pressing issues after the former CEO of his Sands Macao resort brought a lawsuit accusing the Vegas tycoon of having ties to organized crime.

A judge ruled earlier this week that the case will be tried in a Nevada courtroom, a notion Adelson calls “delusional and fabricated.”

bwin.party revenue drop Amaya 888 acquisition

Disappointing revenue numbers released by bwin.party are unlikely to send potential acquirers running, despite the company having earned six percent less than it did in the first quarter of 2014. (Image: californiagambler.com)

Bwin.party has been hogging the headlines this week, as it was confirmed Amaya and GVC together submitted a deal to buy the company, with 888 Holdings following suit with a bid of its own.

But could those proposals be jeopardized after bwin released its financial numbers for the first quarter of 2015 that show the company is headed in the wrong direction?

Probably not, according to experts.

Compared to 2014, total Q1 revenues are down six percent from $184 million to $172 million, a decline credited to lower sports betting margins and the continued regression of online poker.

But like any good politician, the company’s leadership is spinning the news into one of positivity.

“Given our expanding mobile footprint, increased focus on the core business and the associated program of operational efficiencies, we remain on-track for the full year,” Norbert Teufelberger, CEO of bwin.party said.

Folding on Poker?

Perhaps most striking in the earnings report is the dismal performance of poker. The game fell 31 percent compared to last year’s first quarter, with revenues totaling just $18.7 million, less than 11 percent of bwin’s gross income.

“Our year-on-year performance for the first quarter confirms the challenging environment in European poker,” Teufelberger explained.

The company’s chief executive blames the implementation of the Value-Added Tax (VAT) in certain EU markets as one reason for the reduction of revenue. But that isn’t stopping the company from remaining optimistic in regards to the American market.

“In the United States, draft legislation is being considered in both California and Pennsylvania. On the back of the strength of our US platform and existing partnerships (that now includes a market access partner in Pennsylvania), we believe that we are well-placed to secure a leading position in each of these markets should a suitable regulatory and fiscal framework be introduced.”

Bid Adieu to Bids?

Bwin.party says it will now focus its attention on reviewing the bids from 888 and Amaya/GVC, assessing which offer makes the most sense for its investors and employees.

Though bwin isn’t commenting on the specifics of the offers, they likely involve a combination of cash and share considerations accumulating somewhere north of $1 billion. Both 888 and GVC are publicly traded companies on the London Stock Exchange, while Amaya trades on the Toronto market.

“While there can be no guarantee that these discussions will result in any transaction being completed, the Board expects to reach a conclusion over the coming weeks when a further announcement will be made,” bwin.party said in the financial report.

Will the earnings shortfall scare off either bidder?

“There is nothing in these results that I think would frighten off any potential suitors,” Nick Batram, a market analyst told Reuters.

In fact, Batram believes it might have just the opposite effect.

“Perhaps, on the contrary, they might want to get their business done sooner rather than later, just in case this is the beginning of a recovery,” he explains.

And that’s apparently what investors believe as well, as despite a six percent revenue drop shares of bwin.party (LON:BPTY) were up three percent during early trading on Thursday.