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Why Has bwin.party Not Received a Nevada License?

Mar.12, 2013 7:46:AM
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Over 30 companies have applied for an interactive license in Nevada.  A total of 23 companies have either received a Nevada interactive license or have been recommended to receive one.  bwin.party is noticeably absent from this list of approved companies.

bwin.party created a partnership with MGM Resorts and Boyd Gaming to be their software and support provider.  The partnership gives bwin.party a 65% ownership, while giving MGM Resorts 25% and Boyd Gaming 10%.  MGM Resorts and Boyd Gaming have both been approved for an operator’s license, but bwin.party has yet to even appear on the agenda.

What Could Be Causing the Delay?

PartyGaming and their former executive Anurag Dikshit both settled with the US Government.  Dikshit pleaded guilty in 2008 to a single count of violating the Wire Act and paid a $300 million fine, while PartyGaming paid a $105 million fine in 2009.  These settlements were related to accepting US players before the UIGEA went into effect.  The group decided to settle to help pave the way for the company to reenter the US market without interference from the federal government.  One major thing has changed since then.

PartyGaming and bwin announced that they would merge and this plan was finalized in 2012.  The bwin group, formerly known as BETandWIN, accepted US players as well.  They did this through their Ongame skins Pokerroom.com, Holdempoker and Europoker that were acquired in 2006, along with the entire Ongame Network.  The Ongame Network, which was eventually sold to Amaya Gaming, ceased their US operations upon passage of the Unlawful Internet Gambling Enforcement Act.  BETandWIN never settled with federal authorities.

One has to wonder why PartyGaming would settle with the US Department of Justice, only to merge with a company that has not settled with federal authorities.  Settling may have actually hurt their licensing chances.  Nevada gaming laws do not allow a person or company that has committed gaming violations to receive a license.  Anurag Dikshit is no longer involved in PartyGaming or its current company bwin.party, but the company itself admitted guilt in its settlement with the United States Attorney’s Office.

A press release offered by PartyGaming after the 2009 settlement admitted:

“Prior to 13 October 2006, certain of the US customer transactions intended for PartyGaming that were processed by third parties, and other gaming and payment-related activity, were contrary to certain US laws.”

Unlike PokerStars, the only other online poker companies to settle with federal authorities, PartyGaming actually stated their actions were contrary to certain U.S. laws.  PartyGaming was not prosecuted as a company in this settlement, but there is a chance this has come back to haunt them.  This is a fact that the Nevada Gaming Control Board will consider.

Jim Ryan Former CEO

Jim Ryan is the former CEO of PartyGaming and later became an executive with bwin.party.  He started with the company in 2008.  Jim Ryan was also CFO and CEO of Ultimate Bet’s parent company Excapsa.  This is where the situation gets interesting.

Ryan was head of the company back when the largest online poker cheating scandal in history occurred.  There are countless questions that Ryan has yet to answer about the cheating scandal that the Kahnawake Gaming Commission estimates stole in excess of $22 million from players.  The refunds to cheated players may have contributed to the eventual demise of Ultimate Bet and its sister site Absolute Poker.

While Ryan is no longer an executive of bwin.party, there are still doubts about a business that would employ someone in such a role that oversaw Ultimate Bet during these events and potentially withheld important information about it from the public and the KGC.  This is especially true since the incident was exposed shortly after he was hired.  Ryan resigned from bwin.party in December 2012, nine months after bwin.party filed an application to offer online poker in Nevada.

Party Poker and bwin Affiliate Programs

There are many online gambling affiliates that are disgruntled with the affiliate programs offered by PartyGaming and bwin.  This has not changed since the two companies merged.  The bwin affiliate program was known as bewinners.  One affiliate felt that the affiliate program was so shady that they created the belosers.com website.  This affiliate was so angry about predatory terms that were enacted retroactively by bwin that he felt it was time to expose them.

The legitimacy of Party Poker’s affiliate program has also been questioned many times.  They have been accused of removing players from affiliate accounts, not tracking players, changing agreed upon commission rates and removing sub affiliates from their parent affiliate’s account using new terms that were applied retroactively.  These affiliates may go more public with their anger should bwin.party receive a hearing with a US licensing body.

Pokerstrategy.com is arguably the largest online poker affiliate in the world.  On December 28, 2012, the group stopped offering Party Poker Network skins on their website without any notice.  Industry observers were left to speculate as to what caused this abrupt action, but one cannot help but wonder if some of the above affiliate issues were a direct factor in this decision.

Players Suspicious of Random Promotions

Players have also questioned whether Party Poker’s promotions are legitimate.  The World Domination promotion has been suspect according to player reports.  The latest World Domination reportedly saw no player win more than two countries from the large pool of active Party Poker Network customers that frequent the Two Plus Two poker forum.

The Party Poker Network will drop their top VIP tier at the end of March.  Players that have already qualified for this tier will not be grandfathered into the promotion that they worked for the past year to obtain.  These players will lose 20% of their rakeback, resulting in thousands of dollars in lost rakeback each month.

bwin.party Restricts Winning Players

The latest manipulation of the player pool by bwin.party has also drawn suspicion from players.  The Party Poker Network removed access that winning players have to losing players.  This removes some of the skill involved in poker, an argument that Party Poker had made in the past when the UIGEA passed in the US.  This action was done secretly and was later exposed by savvy and observant players.  This has drawn the ire of many in the online poker community.

There is a question as to whether restricting winning players violates gaming laws in Nevada, but this type of behavior could also be illegal in New Jersey.  In Uston vs Resorts International Hotels, the New Jersey Supreme Court ruled that a player cannot be barred or backed off and that all players must receive access to games.  Anything else would be considered discrimination.  If this New Jersey Supreme Court ruling applies to internet wagers, one could argue that restricting access to certain players based on skill violates this decision.  This could become a problem, especially if there is ever a chance of combining U.S. and international player pools, something that appears to be allowed in both Nevada and New Jersey.

There could be any number of reasons why bwin.party has yet to receive a license in Nevada.  The fact that they have remained this quiet and have yet to receive a suitability hearing certainly begs the question of whether their past behavior is hindering their ability to join the upstart US market.

MGM Resorts and Boyd Gaming could miss the launch of online poker in Nevada if bwin.party cannot get licensed soon.  Their competitors could have a head start of months or even years.

Party Poker was once the most popular and arguably the most respected online poker brand in the United States.  As you can see from their actions over the past few years, one has to question if this company is even suitable to offer real money online poker in the United States.

The delay may mean nothing, but there is reason to speculate about why a number of companies that applied for a Nevada license after bwin.party are already approved, while bwin.party has yet to even find their way onto the Nevada Gaming Control Board’s public agenda.