A Big Deal Is Brewing in Online Poker

Travis Hoium, The Motley Fool
Updated

Online gaming, poker in particular, has been on a roller-coaster ride in the year since the Feds shut down the two most popular poker sites on the Internet. But there may be a light at the end of the tunnel for PokerStars and Full Tilt Poker.

The Wall Street Journal and other media outlets are reporting that PokerStars is in discussions to buy Full Tilt Poker and some have said a deal may already be in place. Reports have stated that the deal would also involve a settlement of civil charges brought by the Department of Justice against both companies.

This is one big hurdle that needed to be cleared before online poker could take positive steps forward in the U.S. and may clear the way for deals between online sites and casino operators. Before the entire industry collapsed, Wynn Resorts (NAS: WYNN) had a partnership with PokerStars, something that could have put the casino company at the top of the heap. But Steve Wynn canceled the deal soon after the Feds invaded and now PokerStars is up for grabs.


MGM Resorts (NYS: MGM) and Boyd Gaming (NYS: BYD) are in partnership with Bwin.Party and could also form a formidable player. Caesars Entertainment (NYS: CZR) has a deal with 888 Holdings to power its potential move into online gaming. Only Las Vegas Sands (NYS: LVS) is staying out of the game, probably due to Sheldon Adelson's preference that gaming stays within a casino's walls. Other casino giants are preparing their arsenals.

Where does this leave us?
If reports are true and the deal to sell Full Tilt would result in the settlement of civil charges and create a path for players to get their money back, I see it as a plus for the industry. Black clouds hanging over an industry like this are never good for the potential legalization of poker. But we're still in an election year, and despite support on both sides of the aisle, I don't think poker on your computer is imminent.

It may be some time before online poker becomes legal, leaving casino companies and Internet operators in limbo. The latest news is good for everyone involved, including players, but I don't see it as a sign that poker will be expanded in the U.S. anytime soon.

Interested in reading more about gaming stocks? Add your favorites to My Watchlist, which will find all of our Foolish analysis on each stock.

At the time thisarticle was published Fool contributorTravis Hoiumdoes not have a position in any company mentioned. You can follow Travis on Twitter at@FlushDrawFool, check out hispersonal stock holdingsor follow his CAPS picks atTMFFlushDraw.The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement