Dragonfish pens poker deal with Caesars Interactive
Deal leaves 888 subsidiary well-placed to pitch to other US operators should market open
888’s B2B subsidiary Dragonfish has extended its software licensing agreement with Caesars Interactive to supply poker software for the US market, ahead of potential American regulation.
The original agreement only covered the UK, but has been extended to the US to allow Caesars to launch real-money poker products as soon as intrastate or federal regulation is passed. The deal is non-exclusive, meaning that Dragonfish will be able to sign licensing agreements with other US customers ahead of the market opening.
888’s deputy chairman Brian Mattingley (pictured) said the deal leaves Dragonfish well-placed to develop a foothold in the US once the market opens: “888 has taken a prudent approach to regulation, which culminated in the successful review conducted by the [Nevada Gaming Commission], putting 888 and Dragonfish in pole position for the US market. This gives us a strong platform to roll out our cutting edge, turnkey solution to other potential partners as the market opens.”
The deal was originally signed in September 2009 following the formation of Caesars’ “ then Harrahs Entertainment “ interactive division in May of the same year. Under the terms of the agreement, Dragonfish was to supply Caesars with poker and casino software, e-payment and customer support services for the launch of Caesars and World Series of Poker-branded offerings in the UK. This was followed by a licensing deal with Gamesys in March 2010 to launch Caesars Bingo and Casino.
The supplier relationship between Caesars and Dragonfish was approved by the Nevada Gaming Control Board (NGCB) and the Nevada Gaming Commission (NGC) in March last year, making it the first deal between a Nevada licensee and a foreign supplier to receive approval, with 888 also submitting its application to become a licensed software provider to Nevada-based companies.
Following the announcement, Peel Hunt analyst Nick Batram released a ‘Buy’ recommendation, suggesting that the agreement was not unexpected but nonetheless “should see the shares move better”.
“Not only has 888 put itself in the game should the US open, but it also vindicates its B2B arm which is already a supplier to Caesars,” he said. “Added to good trading momentum is now positive strategic direction. 888 is now very much a business on the front foot,” Batram added.
Panmure Gordon’s Simon French reiterated his firm’s ‘Buy’ recommendation, and said that the significance of the deal has not been reflected in the share price: “The group’s discussions with other potential US partners highlights the potential market opportunity for 888 is bigger than is currently being priced into the shares, in our view,” he said.