Bwin.party Gives Kentucky $15 Million in Online Poker Shakedown

kentucky-stampCommonwealth of Kentucky officials have cashed in again as a result of their ongoing shakedown maneuvers against online gaming.  Kentucky Governor Steve Beshear’s office has announced a $15 million settlement with European giant bwin.party, to resolve Kentucky’s potential claims against bwin.party for PartyPoker and PartyGaming’s pre-UIGEA business activities directed toward Kentucky residents.

A brief on the settlement that appeared in a local Kentucky news outlet noted that “Gov. Steve Beshear’s office said Kentucky filed a case against bwin.party in August 2010 and reached an agreement earlier this month,” referring to the separate filing done by lawyers representing Kentucky on a contingency basis.

PartyPoker.com and PartyGaming.com were not part of the original 141 domain names that Kentucky attempted to seize in its initial 2008 targeting of online gambling, but were named in 2010 in a separate complaint.  PartyGaming, the actual parent company of PartyPoker, later joined forces with Austria-based bwin in a major gaming industry merger.  Bwin, before the merger, never offered any form of online gambling to American customers.

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This $15 million is actually the biggest score for Kentucky, surpassing the $6 million it received from the Department of Justice a couple of weeks ago in exchange for dropping its lingering claims in the DOJ-led “Black Friday” case against PokerStars, Full Tilt and Absolute Poker.  In dropping that matter, Kentucky also reserved the right to pursue future legal action against PokerStars, which now also controls the Full Tilt brand name.  The possibility of Kentucky or other US states continuing to investigate possible actions against PokerStars represents a significant roadblock in any Stars-based plan to return to the US market.

Kentucky has also received a few dribs and drabs and the rights to a handful of largely defunct names as a result of its initial seizure attempt, though the state never succeeded in its seizure efforts against the major sites initially named.

This settlement is interesting.  A brief acknowledgment from bwin.party officials published at another poker site states that the Kentucky action was the last existing legal concern facing bwin.party regarding its pre-UIGEA operations, and it may be another form of a “poison pill” payment directed not so much at Kentucky as at chief rival PokerStars.  Both bwin and Stars continue to covet a chance to reenter the US market, and bwin.party continues to take steps to differentiate itself from Stars.

Those points of differentiation include the (voluntary?) jettisoning of former bwin.party co-CEO James Ryan, who had plenty of US-facing dirt on his hands from his pre-Party days with Excapsa and UltimateBet, which continued to accept US players after the UIGEA passed with Ryan at the operational helm.

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