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Casino operators MGM Resorts International and Boyd Gaming Corp. are teaming with a major European online poker operator to prepare to offer Internet gambling in the United States if it's ever explicitly legalized.
The casino companies and Gibraltar-based bwin.party digital entertainment plc advised Monday that if U.S. law changes...as many in the industry hope...each of the three companies would take a stake in a new entity that would run online gambling under PartyPoker and other brands.
Bwin.party's co-CEO, Jim Ryan, told the media that his company, which owns the World Poker Tour, has been hoping to return to the U.S. Bwin.party stopped offering online poker here after a 2006 law made it illegal to for banks to process funds for the activity.
"We have been putting in place the foundation, if you will, to re-enter the market," Ryan said.
The deal will help the companies build a large enough pool of players to make the business profitable, he said.
Bwin.party, formed earlier this year when online poker operator PartyGaming merged with online sports betting company bwin Interactive Entertainment. The combined company is the largest publicly traded online gambling company; together, their net revenue last year was 814 million euros. PartyGaming had half the U.S. market before it left in 2006.
Ryan said bwin has been preparing for scrutiny from gambling regulators.
Not all online gambling stopped in the U.S., and several poker websites powered along after the 2006 law passed. But the Justice Department has cracked down on several top sites, including PokerStars, Full Tilt Poker and Absolute Poker, accusing their executives of various activities such money laundering and fraud.
MGM Resorts CEO Jim Murren said it will be important to have tough new online poker laws because companies that now offer poker online to Americans have hurt the entire gambling industry's reputation.
"Whenever there's a problem anywhere, it reflects poorly on the gaming industry, of which we are a major player," Murren said. "The federal government needs to address this. It cannot wish it away."
Ryan said he thought his company did the right thing in leaving the US, even as the other operators appeared to flourish.
"Did we sit back and watch in envy and knowing full well that we (had) had 50 percent of the market at that point? Perhaps, but we never questioned our decision," he said.
The companies are pushing for legalization at the federal level. They still would pursue online poker if only states legalize it, but it's not clear whether state-by-state legislation would comply with federal laws.
In addition to setting up the new entity, MGM Resorts and Boyd plan to use bwin.party software to run online poker sites under their own brands, which insiders say is a very smart move.
Boyd CEO Keith Smith told the press he thinks it's important for the companies to be able to move quickly if the law changes, to be first to jump on a U.S. online market that once generated as much as $6 billion yearly in revenue.
"We want our investors to know we've been aggressive in positioning the company," Smith said.
MGM Resorts owns part or all of 18 casinos in Nevada, Mississippi, Michigan and Illinois.
Boyd owns 17 casinos in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana.
Bwin.party is licensed in France and Italy and is pursuing online gambling licenses in Spain and Denmark, Ryan said. The company also has Australia, New Zealand and Canada well in its sights.
Bwin.Party Digital Entertainment offers online casino games, poker games, live dealer, sports betting, bingo and a range other casino games.
Some of their most popular Hollywood and movie themed games include Sinatra, Rambo, The Terminator, Saturday Night Fever, Gone With The Wind, High Noon, Thor, The Incredible Hulk, The Amazing Spider-Man.
Read more about Bwin.Party Digital Entertainment here.
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