03 Feb 12

"Bwin/Party Player Pools Will Merge This Year" - Interview with Jim Ryan

PokerStrategy.com sat down with bwin.party Co-Ceo Jim Ryan to discuss Black Friday, US poker, the WPT, social gaming, regulation, and much more.

bwin.party Co-CEO Jim Ryan

To celebrate our recent increase in StrategyPoints at PartyPoker - our longest standing business partner - we sat down and interviewed Co-CEO Jim Ryan.

2012 could see some of the biggest changes ever in the poker industry as we all anticipate real money social gaming, regulated markets in Europe, and a return to online poker for the US.

The one name being heavily linked with all of these matters, and much more, is bwin.party. We caught up with Co-CEO Jim Ryan to discuss what we can expect from them over the next twelve months.

PokerStrategy.com: Were you surprised by the events of Black Friday, given that the UIGEA had been in place for five years with little action taken against US-facing operators previously?

Jim Ryan: We have always believed that the enactment of the UIGEA meant that it was unlawful to continue offering online games of chance to customers based in the United States. We were therefore not surprised by the actions taken by the FBI and the DoJ on "Black Friday", but we could not of course have predicted the exact timing.  

PokerStrategy.com: Why do you think PartyPoker did not achieve more growth after Black Friday?

Jim Ryan: There was nothing to gain immediately after Black Friday because PokerStars and Full Tilt Poker were able to continue operating in Europe. However, we did pick up around 15% of Full Tilt's European players when it lost its operating license in the summer.

Our player funds are ring-fenced: PartyPoker is 100% safe

PokerStrategy.com: In the wake of Black Friday, poker players are taking more interest in how poker is regulated and how money is protected. What efforts are you taking to make this part of your business more transparent?

Jim Ryan: Ever since we became a public company in 2005 we have had to be totally transparent. In addition to meeting all of our regulatory obligations, we have to adhere to very strict disclosure obligations set by the London Stock Exchange and by the demands of our investors. Our player funds are ring-fenced: PartyPoker is 100% safe.  

PokerStrategy.com: How has Black Friday changed the industry from your point of view?

Jim Ryan: Black Friday was a necessary step before any regulatory framework for online poker could be introduced in the US. What did we learn? We already knew the lesson to be learned was that when the law changed in 2006, it became clear that it was time to stop offering real money games to customers in the US.

PokerStrategy.com: When do you think we will see legal online poker in the US again?

Jim Ryan: The opinion published by the Department of Justice before Christmas clears the way for intrastate online poker in the United States. This is a matter of when, not if.

We have already seen bills introduced in Nevada, New Jersey, Florida, California and Iowa, to name but a few. There is now no question mark over the legality of these bills under federal law and we expect that one or more of these bills could well become law before the end of this year.

The bigger question is whether this race to become the first state to offer online poker will prompt the federal government into seeking to exercise its control over what will otherwise inevitably become a patchwork quilt of regulation, taxation and responsible gaming controls by introducing its own legislation?  We are continuing to monitor the possibly of federal legislation very closely.  

Intrastate online poker in the US is a matter of when, not if

Will we see Party in the US again?

PokerStrategy.com: Do you think that US poker rooms would be ring-fenced from dotcom liquidity?

Jim Ryan: This is our expectation.

PokerStrategy.com: Do you think non-US players would be allowed to play on US poker rooms?

Jim Ryan: I would "never say never", but this is our expectation.

PokerStrategy.com: It has been more than five years since PartyPoker pulled out of the US market - would they still have the same brand power if they re-entered it?

Jim Ryan: Based on a prompted awareness survey conducted just over a year ago in three of the largest populated states (California, New York and Florida), PartyPoker was ranked clear number three behind PokerStars and Full Tilt Poker, who have since had their US activities closed by the Department of Justice on so-called "Black Friday".

In addition to PartyPoker, we also own World Poker Tour, PokerRoom, and ClubWPT, which are all featured in the top ten list in the survey.

PokerStrategy.com: Why is it that many countries seek to go for ring-fencing as opposed to just charging the operator a tax on their country's residents and staying in dotcom liquidity?

Jim Ryan: It's still early days as we make the transition to regulated markets in Europe, but we expect change over time. Denmark has taken a very pragmatic step, recognising that the greater the liquidity, the better the returns. Danish regulation can be held up as a role model for other countries to embrace.  

PokerStrategy.com: After delays in Spain and other countries, do you think the regulation in Schleswig-Holstein will be as planned?

Jim Ryan: We are expecting Schleswig-Holstein to publish implementing decrees anytime soon and then commence the licensing process next month. According to our information, the planned introduction of regulation in Schleswig-Holstein remains on track.

We will continue to offer our products in Germany as long as the legal regime does not comply with EU law

PokerStrategy.com: Will it be possible to offer online poker to all of Germany based on a Schleswig-Holstein license?

Jim Ryan: We take the view that the current state treaty and the proposed revised state treaty violate European Union law. We will therefore continue to offer our products in Germany as long as the German legal regime does not comply with EU law.

PokerStrategy.com: If and when we can expect a merger of the liquidity pools of bwin and PartyPoker?

Jim Ryan: Our aim is to merge our liquidity pools this year. One of the key benefits of the bwin and PartyGaming merger will be the pooling of poker liquidity across our three networks – dotcom in early summer and then Italy and France later in the year.

This will put us in a clear number two position in the dotcom market place and leading market positions in France and Italy.  

PokerStrategy.com: Does the proposed sale of Ongame have a deciding role in this process?

Jim Ryan: No – the timing is independent from the sale of Ongame.

Our aim is to merge the Party/bwin liquidity pools this year

Expect Bwin & PartyPoker liquidity pools to merge this year

PokerStrategy.com: 2012 is the year we could see real money poker and social media coming together. What can we expect to see from PartyPoker in this area?

Jim Ryan: We are excited by the potential represented by the social gaming opportunity. While it's a very different business model from our core business of real money gaming, many of the skills required to develop a successful social gaming business already exist within bwin.party.

As you would expect, our future business developments are being kept under wraps for competitive reasons.

PokerStrategy.com: Are we likely to see a real money mobile phone product from PartyPoker any time soon?

Jim Ryan: Yes - we already have a bwin poker product on the iPhone and Android and we plan to develop similar products for PartyPoker.

PokerStrategy.com:  It has been great to see so many more European legs of the World Poker Tour. Are you happy with the WPT since the acquisition?

Jim Ryan: First of all, we have been delighted with the performance of the World Poker Tour in the US and Europe. The numbers for WPT events in Europe have exceeded expectations. WPT is one of our core poker brands that has high consumer awareness in Europe and especially so in the US. We will continue to strongly support WPT events online in 2012 and beyond.