Could Full Tilt Poker Buy a Vegas Casino?

Much of the talk over the past few years has related to a Las Vegas casino property such as MGM or Harrah's purchasing an already established online poker firm the likes of Full Tilt Poker or PokerStars or even PartyGaming.  The theory being that Vegas would need to get a jumpstart in the industry should online poker become legalized within the United States.  Currently Internet poker rooms must operate offshore.

"I'm beginning to wonder if it's not going to be the other way around," said Mickey Richardson, CEO of BetCRIS.com, the oldest established online sports betting firm catering to the North American market.  BetCRIS began as a call center business in the Dominican Republic back in 1985 and Richardson feels he knows the industry like the back of his hand.  "Full Tilt Poker is like Wallmart.  It's tough to compete with them."

Richardson's company has had affiliations with other poker ventures throughout the years including America's Card Room and True Poker.

"Two years ago, even a year ago I would have laughed at the notion that an online poker company might begin acquiring Vegas casinos," said Richardson.  "Today it just seems logical."

Logical because the Vegas casino firms are suffering financially unlike their online counterparts.

Professional poker player, Clonie Gowen, filed a lawsuit recently against Full Tilt Poker, claiming she was given 1 percent ownership in the company.  In her complaint, Gowen states that her 1 percent amounts to $40 million based on an approximate one year of revenues.

While Full Tilt Poker remains a private company and does not report its earnings, other publicly traded online poker ventures do release their numbers, including the 4^th largest, PartyGaming.  That company owns PartyPoker and does not even operate within the United States.

Just last week, Party reported 3 per cent revenue growth despite the impact of the economic crisis and strong dollar.

CEO Jim Ryan pointed out the group delivered a strong performance across several economic measures.

According to the annual reports, the year 2008 brought in a net profit of $66.9 million or 61 percent higher than the year before, following an abrupt departure from the U.S. market in late 2006. 

Unlike their land-based Vegas counterparts, Full Tilt Poker and PartyGaming incur very little overhead. 

Many of the major Vegas casino groups are now drowning in debt.

In an SEC filing, Harrah's, the owner of the World Series of Poker, says sluggish business at its casinos may force the sale of some assets or result in restructuring.

The Vegas casino giant, which was bought in January 2008 by affiliates of Apollo Global Management LLC and TPG Capital LP, has $24.5 billion face value of outstanding debt, according to the filing. 

Likewise, auditors this week raised 'substantial doubt' as to whether MGM Mirage could continue operations. MGM Mirage, largest casino owner on the strip, has reported a painful $1.15 billion fourth-quarter loss after writing down properties because of shrinking gambling revenue.

And on Tuesday, Station Casinos, which runs a handful of Vegas Strip hotels, announced its intentions to file for bankruptcy protection by mid-April.

Meanwhile, the multi-billion dollar strong online gambling sector shows no sign of letting up despite the worldwide economic downturn.

Chairman of the House Financial Services Committee, Barney Frank, is looking to have legislation passed that would essentially legalize and tax online gambling in the United States.

"I think if we do this right we should make online gaming legal and subject it to a reasonable taxation like anything else," Congressman Frank told Gambling911.com.  "This does not conflict to our effort to stimulate the economy.  This isn't bad for the economy."