888 Holdings, the Gibraltar-based online gaming operator, last month announced that it has acquired the remaining interest in the All American Poker Network (AAPN).
888 bought out the remaining 53% stake of AAPN from its joint venture partner Avenue Capital for $28 million, becoming the sole owner of the network.
The company says that the transaction would strengthen its hold and growth position in the burgeoning regulated market in the US. Furthermore, the move will give 888 full flexibility to deliver on multiple growth opportunities such as forming new partnerships and continuing to roll out its product and technology within the US regulated markets without the need for partner approval.
Itai Frieberger, CEO of 888 Holdings, hailed the acquisition as “an important strategic step towards 888 achieving its exciting long-term potential in the US.”
“Taking outright ownership of AAPN gives 888 additional operational, technological and commercial flexibility to develop innovative and exciting new partnerships and launch in new states, through both B2B and B2C channels, as and when future regulation allow,” he added.
Frieberger believes that the deal “places 888 in an even better position to take advantage of the significant growth opportunities in the US.”
The AAPN was formed more than five years ago as a joint venture between 888 and Avenue Capital with the aim to build its online gaming platform in all the US states where online gaming was regulated. However, expected growth did not happen as quickly as 888 would have hoped. Since 2013, only four states have legalized and regulated online poker including Pennsylvania which became the latest state to regulate online gaming and is expected to come online soon.
“The AAPN joint venture has been a very successful endeavour for the Group,” Frieberger said in a press release. “It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years whilst also investing in other global regulated markets. I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.”
As of now, 888 is the only operator with footholds in all three regulated states (Delaware, Nevada, and New Jersey) for online poker. In Nevada and Delaware, 888 has been operating for a while now, with a statewide monopoly in online poker in Delaware where 888 provides online poker software to all three racetrack-based poker sites (Delaware Park, Dover Downs, and Harrington Raceway).
It is also the only network to offer an interstate shared liquidity player pool in the US that connects players from Delaware, Nevada and New Jersey (which joined the pool in May 2018). 888 is expected to go live in Pennsylvania in the first quarter of 2019 through its partnership with the state’s Mount Airy Casino.
In September, the operator further strengthened its position in the country by launching its sports betting brand in New Jersey alongside its poker and casino brands. This was the first time that the operator had offered sports betting in the country following the US Supreme Court ruling that paved the way for legalized sports betting. The operator also entered into a sponsorship with NFL’s New York Jets, a first-of-its-kind partnership between an online gaming operator and an NFL franchise.
The $28 million buyout of AAPN is a significant step for the company in a bid to pursue further expansion in the US market. Under the agreement, 888 will pay $10 million up front, with the remaining $18 million to be paid by the end of March 2019.