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GVC Holdings/ Future of New Jersey's Largest Online Gambling Site at Stake

February 7, 2016

Corporate Takeover Brings New Licensing Hurdles, Future of New Jersey's Largest Online Gambling Site at Stake

On February 1, UK-listed GVC Holdings finalized its acquisition of fellow gaming network and software provider Now, GVC must acquire official licensing to operate its subsidiaries in New Jersey.

Before the takeover, had serviced Borgata Poker, the largest online gaming company in New Jersey. Borgata raked in over $45 million in 2015, and controls over 30% of the state’s market. But Borgata question whether GVC’s extensive operations in global “grey markets” will label it as a “bad actor” and get its state licensing request rejected.

GVC has already started the application for licensing with the New Jersey Division of Gaming Enforcement; the company sees “no reason” why its license should be denied. In the meantime, GVC also petitioned the DGE for the ability to continue running the partypoker network under the old bwin license while its application is pending. This request was approved by DGE director David Rebuck. However, while the partypoker network continues operation, GVC is prohibited from actually running its subsidiaries until it obtains the license.

Rebuck’s Director’s Statement states that “BWIN NJ and BWIN USA will be permitted to continue their New Jersey online gaming operations under their existing licenses and managed without any operational or management influence or control by GVC.”

But GVC’s shadier global operations might preclude it from getting DGE authorization.

The context: when first acquired its New Jersey gaming license in 2013, it had first chosen to abandon operations in 18 countries worldwide. These countries are considered “grey markets,” meaning governments do not have the policy in place to strictly license and regulate online gaming. Citing minimal revenues and costs involved in overcoming language barriers, gave up these markets. This was widely thought to be a move to clean up its record before applying to the DGE.

GVC, however, operates mostly in such markets, and plans to re-introduce its new acquisitions onto the wider global stage.

GVC is said to have extensive interests in unregulated Brazilian, German, and Turkish markets. CalvinAyre reports that such activity may comprise “up to 92%” of GVC’s business.

While “grey markets” may threaten GVC’s chances of licensing, and by extension, relations with Borgata, it seems likely that New Jersey is not vital to GVC’s endgame. After all, GVC CEO Kenneth Alexander even underplayed the value of American markets, saying its main goals were to get the rights to bwin’s valuable brands and technology, “and not for the US.” It is entirely possible that GVC sees bwin tech as the key to international money--more than could be made in New Jersey alone.


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