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Part one explored the creation of “Ongame 2.0”, a sub-network of exclusive tables shared among select members of the network.

More recently, it has come to light that Bwin’s sale of its “surplus asset” is at the advanced stages, according to Todd Eilers, an equity analyst at Roth Capital Partners.

The Details

Shuffle Master, a US-based slot machine operator, is the company close to completing the acquisition of the beleaguered network. While a price tag has not been revealed, other sources suggest that the cost is as little as €16 million ($21 million). Considering that International Gaming Technology bought the Entraction network for $115 million (€85 million) in May 2011, the Ongame deal seems cheap. Bwin have offloaded the network at a fire sale price.

In June last year, Bwin announced its intention to dump the network; however, few details have emerged since then. PokerUpdate spoke to a source with inside knowledge of the deal, though he wanted to remain anonymous. We asked him why ShuffleMaster was eying up Ongame, and what the operator’s plans are for the network.

He explained: “Shuffle Master does not currently possess poker network technology, that is why they are looking at Ongame. They would pursue B2B I-Gaming (poker) opportunities with the technology.

And the (seemingly) fire-sale price? It’s because the acquisition is “a pure technology purchase as many of the customers would migrate over to the Bwin.Party platform after the sale.”

Even from analysts who track and cover gambling concerns, information is scarce. Not even the price tag or buyer has been confirmed yet.

The Speculation

It has been suggested that the sale is largely a technology play. However, some skins may be bundled into the deal. ON2, consisting of the larger net-depositing skins, would seem most likely to be sold. If Bwin.Party allow other skins on its network, the likes of Betfair and Betsson would probably migrate. This also could be why Betfair moved to Ongame shortly before Bwin announced its intention to sell.

Having skins like Betfair and Betsson could be good business for Bwin.Party. These sportsbook operators are big in the UK and Scandinavia, which could prove useful when acquiring licences around Europe. Bwin also relaunched Pokerroom three years after its closure, which means Bwin could look to be adding other skins to support the Bwin.Party brand.

If Bwin.Party allow WPT Poker, PartyPoker and Bwin as the network’s only skins, then ON2 will likely be transferred over with the company that buys Ongame. While nowhere near the player traffic of Bwin.Party, ON2 would have some potential. A US-based outfit partnered with a European operator could produce a network that would cash in on both the US and Euro markets–an incentive to stick around when Bwin leaves with half the traffic.

This thought is supported by the creation of the Ongame Advisory Board, a committee expected to have representatives of all skins on ON2. It could be the governing body that controls software development and regulates the skins themselves on the network, further enforcing ON2’s independence.

For skins on ON1, the future looks bleak. In the end, the net-extracting players will cannibalize the poker economy. They will be forced to either adapt, move to another network (similar to Tower Gaming, who was forced off by Ongame), or cease poker services altogether.

Of course, this is if the €16 million is the actual price. If it’s more, then it’s likely the entire network is going to be sold altogether. If it’s lower, then it most likely includes the migration of ON2 to Bwin.Party and for skins on ON1 to cease operations (unless they move).

But whatever happens to Ongame, the result for Bwin.Party remains the same. In the end, there will be at least one network that will focus on promoting poker as entertainment rather than profit. With rakeback pros forced out, recreational players should not lose their money as quickly and allow a losing player to have more “wins” against other weak players. The possible reduction of player turnover could mean a more stable poker economy.

With many other networks and rooms struggling with the same problems as Ongame, they will be keeping a close eye on the results. If it succeeds, Bwin.Party has a good chance of pulling clear from Playtech and gaining ground on PokerStars. Should this happen, expect to see other networks following a similar model afterward.

 

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Perry Garland

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