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Acquisitions of Poker Companies Should Be Judged on Future Potential and Not the Past

11 April 2012, By: compncards
Bet24
Bet24

Earlier today, it was announced that Unibet purchased Bet24 for around €13.5, making the company just another in a long line of acquisitions.

This trend has been going on for a couple of years now and has been magnified by the events surrounding Black Friday.

What has been interesting has been the reaction over certain acquisitions. For example, the merger between bwin and Partypoker initially was mixed but later turned out to be somewhat positive as the largest poker network in Europe was now in league with, at the time, the third largest online site in the world.

Then came the sale of Ongame recently. Except for Shuffle Master Inc, everyone viewed the Ongame Network much like it was described, as a secondary asset.

I had a direct tie to Ongame since 2008 as they were one of my largest clients for years. While many gave the company and certain sites a bad rap, my experience with then was by and large and extremely positive one.

However, many people were really overlooking the potential of the network. Shuffle Master now has their own ready to customize poker network for when the US finally opens its doors to online poker.

Furthermore, what better site could they have for a flagship site than PokerRoom.com. Even when it was not running, it was still near the top of search engines and now with the site being open, it will be a great asset for Shuffle Master once US regulation happens.

Next, let's talk about the rumored sale of the Epic Poker League. Thanks to a lot of negative press and the information released in bankruptcy filings, many feel that the acquisition of this league is a bad idea. If you are going by the business model of the company as it stands, you may have a point.

However, is there any reason to believe that a pro poker league that is properly managed and financed will fail? Look at the World Poker Tour. While that is not a purely "pro league", the league is a showcase for that talent. If a pro league were setup in a similar fashion and managed properly, it would still have value.

Not all acquisitions should be looked at based the success or failure of the company being acquired, but also on the potential for the company that acquires the asset.

Why else would GBT be trying (at least in theory) to purchase Full Tilt? The reason is that anyone with half a brain knows that the site will once again move up to "at worst" one of the top five sites in the world once it reopens. Many feel they will move back up to #2. I believe that will eventually happen, but not right away.

One of the only companies that I could not see being acquired for reuse is UltimateBet. Yes, they were purchased after the superuser scandal, but now I think the company would be impossible to revive. UB was able to somewhat rebound after the superuser scandal, but now after what they did in connection with Black Friday, I don't think any company in their right mind will want to associate with that.

Poker is consolidating. At the present, consolidation is necessary due to both the economic and legal climate surrounding the game. However, acquisition is supposed to be a good thing for the companies that are making the purchases.

We should look more at the potential behind the acquisition for the purchasing company and consider what happened in the past as part of old management.

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