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Betfred currently offers poker through Playtech’s iPoker platform, and the joint statement by GVC and Betfred implies that Betfred will soon be leaving to move to the partypoker poker platform.
John Haddock, chief executive of Betfred, said:
“After an extensive review we are pleased to announce GVC as our new e-gaming platform provider. We were impressed by GVC’s proprietary technology platform, together with its scalability and flexible approach to support the continued growth of our online business.”
Kenneth Alexander, chief executive of GVC, remarked:
“We are delighted to have secured this exciting and important B2B partnership with Betfred, one of the major players in the UK gaming market, so soon after the acquisition of bwin.party. This is a significant deal for GVC and recognises the strength and inherent value of our proprietary technology.”
Partypoker already exists as an online poker network in a limited form.
The Bwin brand migrated to the partypoker platform after the two companies merged in 2012. Bwin is the online poker brand which bwin.party promoted most heavily to its European customers.
In the player pool segregated markets of France and Italy, several brands run on the partypoker platform.
PMU is an independent organization owned by 60 not-for profit racing bodies. It represents the closest network relationship that partypoker had with an external company before GVC took over.
In the early days of internet poker, partypoker had several skins on its network platform. The largest of these was Empire Poker, but the others were also well-known brands: Intertops, Coral, Eurobet Poker, PokerNOW, and MultiPoker.
In 2005, after a major software upgrade, Party Gaming decided to stop allowing access to its skins, and, after much legal dispute, bought Empire Poker for around $250 million.
The deal with Betfred may well signal the return of the network model as a central strategy for GVC’s online poker business.
GVC’s SportingBet subsidiary offers online poker through its Paradise Poker brand, and in South America through BetBoo. Both brands will be consolidated onto the partypoker platform.
Since GVC has the network capability already in place and current and previous experience in the network business embedded in its corporate abilities, it may feel that there is an opportunity to recreate partypoker as a full service online poker network provider.
Even as a relatively minor poker operator, SportingBet has licenses from Alderney, Denmark, Germany, South Africa, Malta, Dutch Caribbean and the UK.
The last few years have seen regulation become a major issue for online poker operators, with compliance costs rising relentlessly as a percentage of operating costs.
Margins are compressed to vanishing point—ACF poker found it impossible to make a profit—and industry consolidation is seen as a necessary solution to achieving economies of scale in compliance costs.
GVC’s strategy may be to establish itself as the preferred online gaming platform for smaller operators looking to benefit from the regulatory shield that membership of a network provides.
The shield will not protect them from the full force of compliance costs, or the associated gaming taxes, but may reduce costs to the point where profitability is restored.
The largest full service poker network is the iPoker network, where Betfred currently resides. From the GVC statement, there is clearly a desire to position the company as offering more than iPoker to potential skins.
“The proprietary GVC platform offers a one-stop-shop online offering, focused on a superior sports betting player journey. The platform offers a single account, allowing players to access a variety of content choices around sports and gaming, across multiple channels.
The GVC backend data driven tools will allow Betfred to segment its players and personalize its offering accordingly.”
Playtech offers its own sports betting platform to iPoker skins, as well as a full range of casino games, but GVC appears confident that its offering, post the bwin.party acquisition, will make a competitive alternative.
Notably, Bet365, one of iPoker’s largest online poker skins, has become one of the world’s largest online sports betting providers by using its own proprietary platform.
As a corporate strategy for GVC, the return of the network model may be a timely way to take advantage of current industry trends.