The timeframe was confirmed in GAN’s 2015 annual report issued late last week.
Industry sources have suggested that GAN is a possible replacement for GVC, if the company which has taken over bwin.party fails to satisfy the New Jersey Division of Gaming Enforcement (DGE) as to its suitability for a license.
In February this year, GAN signed an agreement with the Borgata to launch its “Simulated Gaming” online experience.
Simultaneously GAN announced that the agreement “also provides GAN the opportunity to service Borgata’s real money Regulated Gaming online experience in the event certain conditions are met.”
GAN CEO Dermot Smurfit summarized the conditions as being simply dependent on Borgata’s consent.
“In 2016 Simulated Gaming will be served to the majority of Borgata’s patrons who live out-of-state and, in the event GAN receives Borgata’s consent to commence operations is equally capable of simultaneously serving real money Regulated Gaming to the Borgata’s patrons resident in New Jersey.”
Tom Ballance, president and COO of the Borgata Casino Hotel & Spa commented:
“We also take great comfort in having GAN’s excellent real money Internet gaming product available to us as needed.”
Analytic observers could read into that remark the possibility that GAN is the Borgata’s back-up option if GVC fails to get approved in New Jersey.
In the trading update last week, Smurfitt reiterated the caveat regarding conditions, saying that, “we anticipate significantly increased market share in New Jersey’s Regulated Gaming market with The Borgata (subject to certain contractual conditions being met).”
The accompanying slide presentation makes it clear that launching real money gaming in partnership with the Borgata is a critical element of GAN’s strategy.
On the timeline slide, GAN sets out the objective as “Proved strategic market position: Borgata in NJ validates GAN model combining nationwide Simulated Gaming with intra-State NJ Regulated Gaming.”
The existence of the relationship with GAN does not absolutely show that the Borgata wants to end the partnership with partypoker now that GVC has taken over. There is no reason why the Borgata can’t add extra brands to its gaming offer.
The industry rumor mill has Pala Interactive listed as a potential online poker provider if partypoker were to exit the market. PalaCasino is live in New Jersey, but despite developing proprietary software, Pala has not yet launched a poker product.
CEO Jim Ryan said that he would like to see the impact of PokerStars before making that decision.
Unless there is a dramatic change in the New Jersey market, such as partypoker exiting, Pala online poker looks unlikely to make an independent entry – the return on investment probably isn’t there.
Meanwhile, GVC Chief Executive Kenny Alexander has expressed his belief that the company will satisfy the DGE, but the company’s preliminary 2015 results which came out last week made no mention of New Jersey at all. The possibility of not gaining DGE approval was not even listed under the regulatory risks section of the report.
At the moment, the DGE has given GVC the right to continue operating the partypoker brands in New Jersey, but imposed strict rules forbidding communication between New Jersey staff inherited from bwin.party and GVC.
Alexander told investors that he expects a regulatory decision to be made in a few months. The DGE has made quick decisions in the past, except in the case of PokerStars where the political nature of the licensing decision prompted an exhaustive period of regulatory due diligence.
The longer the DGE takes over its decision, the more nervous the Borgata is likely to get.
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