Poker Buyout News

Poker buyouts and industry consolidation.

The latest news is that Party Poker has acquired Noble Poker. The Deal with Noble poker is worth $72 million and is to be funded through a share issue. This is the first of Party Pokers deals where it is expected to consolidate the poker market that is not US facing. I.e. Those poker rooms that have chosen not to deal with US poker players because of the new gambling legislation.

As you may have guessed by now poker is in a state of turmoil after the US Legislation making it difficult for some online poker sites to continue to operate in the US.

What this has meant is that a number of online poker websites have been impacted dramatically forcing consolidation in the industry. The first such buyout talked about is between Ladbrokes and 888 Holdings. This is still speculation over how much the deal will be worth but it should be in the region of a $1billion dollars. Another potential suitor of 888 Holdings is Party Poker.

We discussed musings of the party poker future earlier.

What we do know is that consolidation and buyouts will be the norm over the next year as the industry consolidates it's losers after the US legislation fall out. Time will tell who will emerge at the head of the pack but from the current running Ladbrokes could be well positioned to take this lead due to their record profits of around $600 million dollars. The consolidation will also be set against a back drop of poker sites that will continue to operate in the US market. Time will tell if there is enough money left for the these losers to put together a formidable challenge now that have been excluded from the most lucrative of markets.

We know that in doing these buyouts integration issues in the software will be a very important part of the buyout strategy. Also operations are so diverse and widespread that bringing these companies together is going to be a major obstacle to overcome. The poker business has operations all over the world from Asia to Europe and often in locations like Gibraltar and Isreal which makes integrating companies like this very problematic.

For a list of poker companies that have pulled out see here. The majority of the operators are focusing their businesses on the UK market in the short term. But big plays are likely to come from the Scandinavian regions and Asia. Scandinavian poker is very strong with good players that play for extended lengths of time making them profitable for the poker operators. We will have to wait and see how this battle will unfold though.

An untapped market at the moment is the Indian market which historically has not been strong in terms of poker. So education may be the key component in this region.

What we do know for certain this is going to be a dog scrap as once mighty companies now have to fight for what was previously seen as non-core business regions.

This reminds me of a phrase, it's not the dog in the fight but the fight in the dog, may the best Dog Win!