bwin.party Positioning Itself for New Jersey iGaming Approval

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Thursday, October 31st, 2013 | Written by Stephen Smith

The last two of the remaining original founders of gaming company bwin.party Digital Entertainment will be divesting themselves of their shares in bwin – the world’s largest publicly traded gambling company – as the company works to gain a license to operate in the nascent New Jersey online betting industry.

The announcement was made Thursday via the company’s web site, which stated that PartyGaming cofounders Ruth Parasol and Russell DeLeon will both be selling off shares in the company rather than be subject to individual licensing by New Jersey officials.

New Jersey law requires some individuals to seek separate licenses

Under the terms of New Jersey’s Internet betting law, which was signed by the state’s first-term Republican Governor Chris Christie in late February of this year, “certain substantial shareholders of bwin.party are required to submit individual Licence applications to the DGE or otherwise dispose of their shareholdings,” bwin.party said in its statement.

Rather than seek those permits, both Parasol and DeLeon will be placing their substantial shares – Parasol currently holds 58,498,667 shares of bwin.party and DeLeon has 58,498,666, both via holding companies – into a trust. The trust will divest the shares from Parasol’s Emerald Bay Limited and DeLeon’s Stinson Ridge Limited over the next 36 months.

bwin.party applied for a Casino Service Industry Enterprise License from New Jersey regulators in July and has yet to receive final approval. Parasol has been affiliated with the company since 1997; DeLeon since 2001.

New Jersey launch less than one month away

bwin.party, based in the UK territory of Gibraltar, home to several international gaming companies, offers a wide variety of betting options to players from around the world.

Among the company’s selection of betting options are online poker, online casino games, and online sports betting, making it well-poised to offer a similar suite of games in New Jersey should the company be approved by the state’s Division of Gaming Enforcement.

New Jersey will officially launch real money online betting web sites on November 26, and as in Delaware – where sites are up and running in testing mode as of today – a comprehensive assortment of wagers will be permitted.

By contrast, the first state to regulate online gambling in the United States, Nevada, currently only permits real money online poker. The Silver State passed legislation to regulate the game of online poker back in 2011; games went live there in April of this year.

Though there has been some conjecture that Nevada lawmakers may be looking to broaden the scope of Internet-based wagering there in order to compete with New Jersey and Delaware, that rumor was shot down earlier this month when the head of the Nevada Gaming Control Board, A.G. Burnett, said that for the time being, the Silver State will focus on legal online poker only and will not be looking into introducing additional games.

bwin operated in the U.S. before the UIGEA was passed

The exit of DeLeon and Parasol from bwin.party is telling, and suggests that the company is taking steps to make itself as attractive as possible to New Jersey regulators.

It should be noted that the company did offer U.S.-facing real money poker games prior to the 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA), a law that restricts the processing of certain financial transactions relating to online gambling. When that bill was signed into law by former President George W. Bush in October of that year, bwin ceased operation in the United States.

Approval in New Jersey would mark a re-entry for the company into the American gambling market. Thus far, only land-based casinos in Atlantic City have received licensing approval from New Jersey regulators, a situation that is anticipated to change in coming weeks ahead of the November 26 launch date.