COPA selects Sciplay/Playtech for intrastate poker
Playtech marks "return to US" by signing initial play-for-fun poker software licensing deal with California Online Poker Association, group that makes up 60% of poker revenue in the state.
Sciplay, the joint venture between AIM-listed Playtech and US partner Scientific Games, has gained a footprint in the United States ahead of potential online gambling regulation by signing an online poker contract with the California Online Poker Association (COPA), a body that includes Commerce Casino in Los Angeles, one of the largest poker rooms in the world.
Initially based on play-for-fun, Sciplay will provide intrastate online poker services, while Playtech will license its poker software and IMS operator management system to COPA ahead of possible legislation which would eventually allow cash gaming. The exact terms of the deal, are unknown, however a Playtech spokesman said it would decide whether to set up a poker network or focus on a “mega brand” on behalf of COPA if and when real money play was an option. The spokesman added the first six months of the operation would be focused on setting up a play-for-fun site using “existing resouces”.
In an announcement to the stock exchange this morning Playtech called the move a “return to American operations”, its first since UIGEA was implemented in 2006. It added that California’s estimated 2m poker players, who currently play “illegally”, would be able to “become acquainted” with the new system and “hone their skills” ahead of real money play. California, that has an estimated population of around 37m, is the largest poker playing state in the US. Playtech will set up a base in California.
Playtech said it had the potential to become a “very substantial” revenue source, as and when a real money option is permitted. “The deal puts Playtech in the strongest position to take advantage from anticipated changes to US regulation as California is likely to be one of the first to regulate on a state level and have a sustainable domestic market,” a statement read. “Timing of revenues are wholly dependent on regulation, but Playtech will build franchise through play-for-fun “ starting this year,” it added.
The timing of the announcement comes just three months after Black Friday where the founders of three of the world’s most popular poker sites were accused of alleged bank fraud, illegal gambling offences and money laundering in an indictment unsealed by federal prosecutors and just a month after Playtech agreed the option to perform a buy-back of up to 10% of its shares aimed at protecting long-term investors, with the board believing that recent trading had not reflected the company’s “true value”. The buy-back came after a year-long period during which its shares fell more than 30%, hitting a low of 286.5p last month. Its shares rose approximately 6% on this morning’s news.
Mor Weizer, CEO of Playtech and Rick Weil, CEO of Sciplay, both said: “COPA is supremely well positioned to become a licensed operator should internet poker become legal in the state of California”, and that both companies were delighted to have the opportunity to work with COPA, both for the provision of software and also through the Sciplay joint venture.
COPA is California’s largest group of regulated land-based casino and poker operators, made up of 29 official tribal governments and 31 card clubs “ making up around 60% of poker revenue in California.
In August last year the Morongo Band of Mission Indians was joined by 21 tribes in its new California Intertribal Intrastate Poker Consortium. The consortium is one of two LLCs that form COPA.
At the time the Morongo/Card Room consortium was sending out requests for proposal to provide its poker platform in a regulated Californian market to operators and providers, with a view to being one of the groups licensed to offer egaming if and when Senator Rod Wright’s intrastate bill passed.
There are currently two bills in place in California although no progress has been made since April. In December last year Senator Lou Correa introduced internet poker only bill SB 40 at the request of COPA providing for the establishment of only one site. However, in April this year Correa, on behalf of COPA, filed a series of amendments to his bill establishing five sites. The first three sites would go online immediately with a preference for COPA. Then, after a period of three years the state would determine whether or not the market would need a further two sites.
At the same time Senator Rod Wright, Chair of the Senate Governmental Organization Committee, re-introduced SB 1485, his legislation from last year, under new bill number SB 45. His bill would legalise all online gaming. The previous incarnation of Wright’s bill stalled in committee in June amid opposition from potential stakeholders and interest groups, including the Morongo.
In January, trade organisation US Online Gaming Association (UOGA) was formed by founding members PKR, Sportingbet and Secured American Games “to advocate for the legalisation and regulation of online gaming in the States”.
In a blog in April former Morongo spokesman Patrick Dorinson, now director of communications at UOGA, said both Senator Correa and Wright should be “commended” for getting the discussion to this point but that “ultimately, all of us need to work together, with other members of the Legislature and the Administration, to create an internet gambling program that is a hallmark of clarity, fairness, enforceability and profit to the people of our state.”