Davy, a broker based in Ireland, says that the recent settlement agreement between the US government and PokerStars and Full Tilt Poker could have an adverse effect on Bwin.party Digital Entertainment Plc.

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PokerStars, the world’s largest online poker room, agreed to pay a massive sum of money to the US government to escape the legal charges filed against it by the US government. The deal also puts PokerStars in a position to purchase its one-time rival Full Tilt Poker, which simply could not recover as PokerStars did after the US federal government cracked down upon it, seized its domain name, and arrested key people associated with it on April 15, 2011.

According to the terms of this deal, PokerStars has agreed to pay a sum of $547 to the US government and repay a total of $184 million that Full Tilt Poker is said to owe its ex players all over the world. Meanwhile, the US DoJ will use the massive sum of $547 million paid by PokerStars to repay Full Tilt Poker’s ex poker players in the US.

David Jennings, an analyst at Davy, said, “At first glance, the implications of this agreement appear to be negative for Bwin.party” and pointed out that the company rakes in 25 percent of its revenue from its online poker sector. He also said that a competitor for Bwin.party might return to the European market.

Jennings said, “PokerStars says it intends to re-launch Full Tilt Poker within 90 days. With PokerStars’ marketing budget behind it, it may well be able to resuscitate the severely damaged Full Tilt brand, bringing a fresh competitor back to the European poker market. Secondly, with this agreement in place, Pokerstars’ European licenses now appear to be completely safe. Any hope that bwin.party investors may have had that some day its European licenses could be impacted by a prosecution in the US will now fade. Combined, these two factors mean that the poker revenue line at bwin.party is likely to remain in a state of structural decline.”

Jennings said that he has downgraded the poker revenue for Bwin.party by 11.7% for this year and by 5% for 2013.

The future of online gambling companies in the US became bleak when the country passed its Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, on the basis of which it cracked down on top online poker rooms PokerStars, Full Tilt Poker, and Absolute Poker.

Tight Poker Staff

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Tight Poker Staff

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For nearly two decades, we’ve provided the best in class for poker site reviews, top online poker bonuses, strategy tips, poker news, and exclusive free poker content.  Consisting of a team of poker and gambling experts, we deliver the best online poker brand experience for players of all levels, from the fish to the sharks.