With a fourth state poised to launch legal online poker early next year, worldwide iGaming firm 888 Holdings moved to solidify its footing in the U.S. by acquiring a full stake in the All American Poker Network (AAPN).
In a press release issued on December 11, the Gibraltar-based 888 Holdings announced its purchase of 53 percent of AAPN shares for $28 million. Adding to the company’s previous 47 percent stake, the deal secures full control in the AAPN, a joint venture between 888 Holdings and investment partner Avenue Capital Holdings which was launched in March of 2013.
At that time, 888 and Avenue envisioned the AAPN as a vehicle through which to “launch 888’s B2C brands in the regulated online gaming market in the United States.”
By September of 2013, the 888 Poker software engine was being used to power the WSOP.com platforms – which operate under the iGaming licenses of Caesars Entertainment – in both Nevada and New Jersey. The Garden State is also home to a separate 888 Poker “skin,” while 888 provides the software used by Delaware’s three state-operated online poker sites.
In May of this year, all three states began sharing player pools across their respective 888 / WSOP.com brands as part of the Multi-State Internet Gaming Association (MSIGA) agreement. One month later, the combined intrastate platform became the clear revenue leader within a crowded New Jersey market while strengthening its monopolies in Nevada and Delaware.
Itai Frieberger – who serves as chief executive officer of 888 Holdings – offered the following appraisal of his company’s AAPN play:
“The AAPN joint venture has been a very successful endeavor for the Group.
It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years while also investing in other global regulated markets.
I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.”
As the only online poker operator with a presence in all three states where legal industries have gone live, 888’s full takeover of the AAPN is timed to coincide with the launch of a fourth regulated market in Pennsylvania.
Pennsylvania lawmakers approved a sprawling package of gambling expansion bills, including the full range of iGaming offerings, in October of last year.
State regulators have taken their time sorting through the red tape since then, but the Pennsylvania Gaming Control Board (PGCB) recently issued its first round of operator license approvals.
Among the companies granted conditional approval to offer online poker in the first quarter of 2019 is Harrah’s, a subsidiary of Caesars Entertainment which will run the 888 / WSOP.com platform upon launch.
In his public statement, Frieberger pointed to the expansion of America’s regulated iGaming market as the prime impetus for securing full control over the AAPN:
“The acquisition of the remaining stake in AAPN is 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 allows.
This acquisition places 888 in an even better position to take advantage of the significant growth opportunities in the US and create additional value for our shareholders.”
An approved application submitted by the Mount Airy Casino Resort also lists 888 Holdings as an iGaming partner, giving the company at least two footholds in Pennsylvania going forward.