Five consequences of a deal: the Harrah's-Dragonfish tie-up 30/10/2009
THE DEAL 888’s business-to-business division Dragonfish secured last month to supply Harrah’s Interactive Entertainment (HIE) with online poker and casino products for its non-US players was something close to game-changing (saving?) for the owner of the Casino-on-Net brand.
With the 888 share price performing badly since the start of the year, the consumer division hitting a rough patch and a string of B2B deals underwhelming the market, the company had to come up with something dramatic. It managed that with the HIE deal.
1) The deal has already provided a massive boost for 888. Its share price rose 15% on the day of the announcement.
2) It will also mark the entry of Harrah’s’ flagship properties the World Series of Poker (WSOP) and its Caesars casino in Europe.
3) Since 888 does not have a settlement with the US Department of Justice and does not seem too bothered about getting one, Harrah’s will surely play a key role as a major member of the American Gaming Association in any upcoming egaming regulation in the US.
4) Following on from this, it is worth asking if Harrah’s knows something about the US legal situation the rest of us don’t.
5) Will the markets be willing to raise debt for 888 even without a US settlement now that it has partnered with Harrah’s?
This article first appeared in the October issue of eGaming Review.
Posted: 30/10/2009
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