PokerWorldNow

Those who did a detailed analysis (not me) on the deal in which Gamynia bought the World Poker Tour may have noticed that in the associated 8-K that was filed with the SEC there was a clause in the acquisition agreement that gave the WPT an out if a better deal came along. More specifically, the WPT has the right to terminate “under certain circumstances, including a determination by the Company’s Board of Directors to accept an acquisition proposal it deems superior to the Transaction.” All the WPT has to do is pay an “I’m sorry for changing our mind” fee of $1,000,000.

The WPT is getting a pretty good deal from Gamynia, to summarize: Gamynia pay $9.1 million in cash, WPT gets to keep the $21 million in the bank and WPT receives about 5% of future revenues.Who has come over the top (I promise the last poker metaphor that will ever be used) and piqued the WPT’s interest?

Assuming that the  Gamynia deal is really just a shell company for  PlayTech as I predicted in my first blog about this transaction, then perhaps one of the big boys, and by that I mean FullTilt or PokerStars, has taken a page out of this book and opened up their cash coffers. It is strategically logical for both companies to a) expand their push for producing TV shows as way of advertising and b) act as a hedge in a U.S. regulated environment because, as I wrote in my blog about the Menendez bill, it looks likely that off-shore operators will be rejected for licenses.

Thus far the WPT execs have kept mum about the deal, but I suspect if the deal goes through it will take a couple of weeks for an official announcement. Technically the Gamynia deal will automatocally terminate on Januray 28th, 2010.

For over 2 years I have watched the World Poker Tour stock (WPTE) hover in the  40 to 50 cent range, bottoming out at 25cents in January of 2009. Then in June something amazing happening. The stock went crazy and was up nearly 7X from its bottom. Someone somewhere knew something and it wasn’t me. A few days later rumors came out that PartyPoker was making a bid and then another rumor surfaced that Bwin was the suitor. Finally, on August 3rd it was announced that WPT was bought by Gamynia Limited.

Who?

No one has ever heard of (or, can pronounce) this company. Ok then, time to Google…

Google returned 461 listings and every single one (I didn’t look at every one, but at least the first 100) had to do with the aforementioned acquisition. This leaves us with two possible scenarios: 1) a couple of moneybags decided that it would be fun to run a struggling televised poker tour with negative returns, created a shell company and away they went or 2) a company that saw a strong strategic fit despite large losses created a shell company and away they went.

I am going with number 2. The press release also gave it away by saying “Gamynia has secured the services of an industry leading online gaming marketing company Hardway Investments Ltd. which will seek to exploit and develop the WPT brands with the goal of maximizing future revenue opportunities.” Ok, online gaming marketing company probably means there is some sort of online gaming plan. So, who is this Hardway company anyway? Time to Google.

Unlike Gamynia the mystery company, Hardway actually has a website. From the looks of it they seem be the holding company for Titan Poker and a couple of online casinos, all of which are on the PlayTech network. They also operate EuroPartners, the official affiliate network operator of PlayTech.

To me this is all starting to seem like a PlayTech-backed play to position a WPT online poker brand in the U.S. once regulation occurs. It makes perfect sense. The WPT doesn’t have the cash or know-how to compete with the big boys, whomever they will be in the future. MGM Mirage? Harrahs? Full Tilt? The Mashantucket Pequot Tribe?  Playtech and Hardway have the cash resources and the know-how to build and market a U.S.-based online poker room. They have done it in the past. Gamynia was simply created as a shell to distance Titan, and other skins that have raked in the U.S., from this deal. That’s my theory and I am sticking with it.

Since the acquisition the stock has dropped back down to about a buck, but someone made some money somewhere…