Neteller, Party and 888 – Let’s Make A Deal!

Some folks have been asking me to give my take on the most recent announcements to come out of the online gaming world. Okay, so here we go.

Neteller: It’s been announced that Neteller has struck a deal to give people their money back. Woohoo! As Drizz recently commented, I’m the blogging sourpuss so while I think this is a very positive development the bad taste left in my mouth from Neteller’s attitude and lack of communication during this period doesn’t exactly make me feel any better about them as an organization.

Anyway, I think it’s a good development. Some of that money will come back into the poker economy and that’s always a good development. But to keep it in perspective, it was only $55 million. That’s not an insignificant amount of money but it won’t likely create anything more than a small blip in overall liquidity.

It’s still difficult for players to get money onto online gaming sites and many people have simply left the market. In my personal opinion, the dropoff we’ve seen since the Neteller seizure isn’t a result of the $55 million being sucked out of the poker economy (though it is a contributing factor) as much it’s a reflection of how difficult it is to get money onto poker sites.

I know, I’m the bad guy for saying this stuff but I think it’s good news but not great news.

Party and 888: Both Party and 888 announced that they’re speaking with the USAO. Nobody’s 100% sure what it’s all about quite yet as both companies have made very generic statements but I think the view presented by some analysts that they are seeking to strike a deal with the USAO which says that the law was unclear prior to Oct 13th and they’ve been in full compliance with the law since Oct 13th is the most likely scenario. If that’s the case it’s like a baptism for both companies. They’ll come out of this squeaky clean.

Obviously, I side with this view because I’m biased by my past predictions on this. When people asked why these companies were exiting the US market I speculated that at least part of it had to do with being able to re-enter the US market at some point in the future. At a minimum, it clears up a lot of investor uncertainty and if the laws are changed to allow online poker in the US, Party and 888 could either apply directly for a gaming license or be acquired by someone who would have no problem getting one (Harrah’s, MGM, etc).

So from a meta-level, I view this as being extremely positive for online poker. It’s far better news than Barney Frank’s bill which currently has only 19 of Frank’s 69 committee colleagues signed up as co-sponsors. The reason being that if 888 and Party come to some sort of agreement with the USAO someone like MGM could buy 888. Once MGM owns an online poker site operating overseas they’d have a lot of motivation to lobby Congress hard for an exemption or law allowing them to offer services to US customers. Considering the depth of the gaming industry’s pockets this seems to be a far more of a slam dunk than anything else that’s out there right now.