The global online gambling market is storming in the wake of a mega deal, signed between 888 (888.L) and Harrah’s Interactive Entertainment Inc, a subsidiary of Harrah’s Entertainment Inc (HAMLEH.UL). Under the terms of the deal, 888, through Dragonfish, its B2B operations branch, will supply Harrah’s with online gambling software, customer service and e-payment.
Although it is the biggest gambling company in the world, Harrah’s has no online presence yet. The Las Vegas based Gambling Giant will use 888 support to penetrate the European online market with its World Series of Poker (WSOP) and Caesar’s Casino mega brands.
For 888 this deal is much more than just a lucrative (very lucrative) deal. 888 enters the deal as a part of its strategic emphasis on B2B activity as an instrument to secure its position in the American market, should it legalize online gambling. 888 renounced its online gambling activity in the US after a 2006 legislation, banned online gambling there. Recent massive lobbying by American gambling giants has caused some to estimate that the US legislator might legalize online poker in the US. Now, 888 is hoping to reposition in this market by offering its online expertise to local mega players.
It appears that investors appreciate the attractiveness of the deal for 888. 888 shares have surged Friday to complete more than a 10% increase in just one day. Analysts changed 888 shares rating from “Hold” to “Buy”.
