Reno-based International Game Technology and London-based Cyberview Technology have entered into preliminary discussions that could lead to IGT’s acquisition of Cyberview.
Both sides agreed to a period of time to negotiate a potential acquisition. Under the terms being discussed, shareholders, option holders and warrant holders of Cyberview would receive aggregate consideration of up to US$70 million for all of the outstanding equity securities of Cyberview.
Discussions are in the early stages and terms of any agreement between the two companies that is currently being negotiated have the potential to be significantly different should a final deal be signed. Cyberview shareholders would still have to approve any deal as well.
Both companies have said the discussions do not mean there is any definitive deal on the table and no assurances that a deal will be reached. Neither company said it would comment on the negotiations further.
PUSH FOR U.S. INTERNET GAMING REGULATION GAINS MOMENTUMIn early March, Congressman Jim McDermott, D-Wash, introduced the Internet Gaming Regulation and Tax Enforcement Act of 2008 in an attempt to create further movement toward the legalization and regulation of Internet gaming within the United States.
Online wagering has been banned in the States since Congress’ 2006 passage of the Unlawful Internet Gaming Enforcement Act. Opponents of the ban argue the United States is missing out on golden opportunities to regulate and reap valuable rewards in the form of taxation that could put millions of dollars into federal and/or state coffers. Already an estimated $12 billion to $15 billion industry, one report by Merrill Lynch indicated that online wagering could become a $528 billion industry annually by as soon as 2015. According to a recent release from the Safe and Secure Gambling Initiative, a coalition that is fighting the current ban, potential tax revenues from regulated Internet gambling could be between $8.7 billion and $42.8 billion over 10 years.
“To be clear, these are not mostly new taxes - the bulk of the revenues generated would come from taxes required under existing law,” said Representative McDermott in a letter circulated last year to all members of Congress. “This is simply a framework to collect taxes on existing activity that is currently unregulated, unsupervised and underground.”
McDermott’s bill would serve as a companion bill to the Internet Gambling Regulation and Enforcement Act (H.R. 2046), legislation introduced by Rep. Barney Frank, D-Mass., that would regulate Internet gambling in the United States. Under the Frank legislation, each Internet gambling operator would be licensed by the Financial Crimes Enforcement Network (FinCEN) and be required to ensure that the individual placing the bet or wager is physically located in a jurisdiction that permits a particular form of Internet gambling.
The legislation would also reinforce the rights of states to control what, if any, level of Internet gambling is permissible within their borders, including the ability to apply additional taxes, and to ensure that appropriate consumer protections and limitations were in place. McDermott’s legislation includes an enhanced reporting mechanism under which licensed gambling operators are required to provide each customer an annual statement of winnings and losses.
It also establishes a 2 percent licensing fee that is paid by the operator, not the individual gambler. The licensing fee is designed to equalize the costs of operation in providing gambling services online, as opposed to brick-and-mortar casinos providing gambling services in person, and would only be applied to online operators.
GCA DISCONTINUES ARRIVA CARDLas Vegas-based Global Cash Access announced it was discontinuing its Arriva Card as part of its strategy of focusing on its core electronic payments business. The Arriva Card was the first consumer credit card geared specifically for the gaming patron, and offered better cash access and credit lines for gambling patrons than many traditional credit card companies. The card had been offered by GCA’s wholly-owned subsidiary, Arriva Card Inc.
GCA executives said the company is currently studying a range of strategic options for the Arriva Card Inc. portfolio of receivables and cardholder accounts.
“We remain committed to developing innovative products and services for our gaming industry customers, but we believe that the right business decision is to discontinue our Arriva Card product,” said GCA President and Chief Executive Officer Scott H. Betts. “Even though we believe that we have effective credit quality safeguards in place, it is our view that, in this environment, no consumer credit product will be immune to losses. We are convinced that this decision is in the best interest of our shareholders and casino partners.”
Betts said that GCA plans to make the discontinuance seamless for its casino customers and Arriva cardholders, adding that “we learned valuable information from the offering of the Arriva Card and intend to apply those insights, and the same innovative energy, to our continued product development pursuits.”