Harrah's/888.com Software Deal in The Works

This past Friday saw an interesting development in the online poker front when Harrah's (owner of many Las Vegas hotel casinos) announced a contract deal with online gambling company 888.com to utilizes their services for online operations.

The deal, which includes the licensing of 888.com subsidiary DragonFish to provide financial processing and customer support for Harrah's UK operations sent shares of the company (which had been stagnant) into a two-month high following the news.

The deal is reported to be worth millions of dollars over the coming years and is expected to begin in the first quarter of 2010 according to the schedule.  Chief Executive Officer of 888 Holdings Gigi Levy commented on the exciting news saying, "It's an amazing deal if the U.S. market opens up to online gaming one day and it's a good deal even if it's Europe only.  We have more big American deals in the pipeline for the B2B unit".  The extent of other American deals is unknown at the moment however 888 Holdings has been positioning themselves for the past several years as the de facto software providers for large corporations looking to enter the market.

Although the exact financials of the deal were not publicized, industry analysts are chalking this up as a huge development for 888 who will provide e-payment processing and client support for Harrah's online properties including WSOP and Caesars.

This deal stands to encourage further development into the online gaming market by land based casino operators who until recent years have been either hesitant or unwilling to explore the market.  Although the deal will only be European facing for now, you can bet that Harrah's is gambling on legalized US online poker in the coming years and is seeking to development a strong brand for entry into that market.

Recent shifts in US policy and various proposed legislation that will be decide on in the next few months will have a major impact on the stance of online poker in the United States.  Because of the potential revenues (with the US as the largest market worldwide), expect to see a number of companies start looking at the online space.

Harrah's operates more than 50 land based casinos worldwide and was acquired in 2008 for $30.7 Billion dollars by two private equity firms.  The company reported annual revenues of $10.8 Billion dollars across it's range of gambling products.