Taking it online - it's all in the timing.
Some days ago 888 made public the fact that they were in talks with "unspecified firms" about a takeover. Today the Gibraltar based British bookmaker Ladbrokes revealed that they are one of these firms. Analysts peg the deal at around �470m, but Ladbrokes was quick to stress that no agreement was imminent. 888 and indeed Party Gaming suffered greatly when they were forced to shed American customers & hence up to 75% of their income after the US Federal government introduced a law designed to effectively block online gaming for Americans. These new laws also caused a stock price tumble in the gaming sector on the LSE. Partygaming shares decreased in value by around 70% and 888 by close to 25%.
Analysts predicted a period of acquisition both by and of the larger online gaming companies. But chances are that we will see other groups moving in for opportunistic purchases. This may suit 888's key shareholders nicely, and in fact it was reported in the London newspaper The Mail that certain larger stake holders may prefer someone other than a direct online gaming competitor acquire them. Some readers will remember a certain Las Vegas casino's foray into the online world a few years ago. In short the whole exercise was a fruitless and costly, as this operator decided not to take US players. The online casino closed down some months after with many millions of dollars of losses. The Las Vegas strip may be slow to change, but the casino's business direction moves a little more quickly.
The MGMs and Harrahs of the world really are the best positioned to capitalize on any legalization through proper regulation of online gambling fin the US. The US casino industry has great brand recognition and not just in their own country but world wide. They are seen by many as leaders in customer retention management and they have huge customer databases. Both things, along with huge marketing marketing budget they can bring to the table, will make for a powerful cross-marketing situation. I am sure some in the industry are thinking more in terms of "when" and not "if" a large vegas player will acquire a still smarting wounded giant of the online world. When they do, the online gaming world will tremble yet again.
posted by Ian of egamingpulse.
