bwin to Buy Italian Poker Operator

bwin today released a statement to address rumours which emerged over the weekend that it was to buy Italian online poker business Gioco Digitale.

The Austro-German publicly-quoted company confirmed it had agreed to buy the business but said the transaction had not yet been finalized.

“In response to market rumours and recent press statements, the board of bwin makes the following announcement,” the statement said.

“The Board of bwin Interactive Entertainment AG (“bwin”) and Gioco Digitale S.p.A. (“Gioco Digitale”) and its shareholders have agreed on principle terms for the acquisition of 100 percent of Gioco Digitale. The parties are in the final stages of working on a sales and purchase agreement, however, there can be no certainty that a final binding agreement on the transaction will be reached.”

Gioco Digitale was the first online poker room to benefit from legislative changes in Italy which partially legalized online poker.

Analyst Daniel Stewart & Co. said, “Gioco Digitale was the pioneer of regulated online poker in Italy, developing a [greater than] 60 percent market share at the back end of 2008. This has reduced to [around] 20 percent (June 2009) as other key new entrants have entered the market (Sisal, Snai, Lottomatica, PokerStars, PartyGaming etc).

“The combined market share of bwin and Gioco Digitale would equate to a market share of [over] 25 percent, providing a genuinely strong, defensible and liquid poker network in the regulated Italian market, with a market size estimated at [greater than] 2bn annually.

Estimates for the price bwin will pay range from €90 to €100 million.

The company retains a strong ‘buy’ stance on bwin which recently published robust second quarter poker results. bwin shares were up 5.4 percent to €28.70 at 1:25 p.m. BST.

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