Industry Braces for Consolidations - 02-04-10

February 4 - Many online gambling experts believe that 2010 will be a 'determining' year that will affect the industry in the long run.

Major partnerships between top gambling operators, as well as settlements with the US authorities will lead to consolidations on a grand scale, it is predicted.

All eyes are presently on a potential merger between Party Gaming and the Austrian group, bwin, which - if it happens - may trigger a number of other consolidations between major groups.

"I do think there's going to be a domino effect," said one senior executive, "meaning the first deal gets everybody else to run. You don't want to be the last one left without a partner."

Much logic is seen in a deal between bwin and Party Gaming, combining their expertise in sports betting and online gaming respectively.

"Such a deal would bring Party the critical mass in sportsbook that it lacks, while for bwin, Party's casino and poker products would provide a significant boost to its presence in these markets," noted industry analyst Nick Batram.

This is not that first time that bwin has tried its hand in a major merger.

Swedish poker group, Ongame in 2006 as a means of entering the US poker market, backfired as the US government passed the Unlawful Internet Gambling Enforcement Act that same year.

Other top groups may settle with the US Department of Justice over charges of providing gambling services to the US market prior to the UIGEA.

Companies who are expected to do so include 888, meaning that once it has reached a settlement, it will be a more attractive partner in future consolidations..

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