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888 Purchases Remaining Assets of All American Poker Network for $28 Million

888 Holdings has been a significant player in the regulated online poker market and a move announced on Tuesday will give them an even tighter hold on the regulated market. The company issued a press release stating that the company now has full interest in the All American Poker Network after buying the remainder of their assets for $28 million.

888 Holdings Acquires All American Poker Network

In case you didn’t already know, 888 Holdings and Avenue OLG Entertainment LLC came together in a joint partnership back in 2013 to form the All American Poker Network. At the time, 888 Holdings held 47% interest in the company with Avenue holding the remaining 53%

On Tuesday, 888 Holdings issued a press release announcing that they have purchased the remaining 53% interest in AAPN from Avenue for $28 million. According to the terms of the deal, $10 million has already been paid to Avenue for the assets of the company with the remaining $18 million to come due by March 31, 2019.

888 ties up All American Poker Network acquisition for $28m https://t.co/7trvmwN1jP

— EGR Intel (@EGRIntel) December 11, 2018

According to the release, the value of the gross assets of AAPN is just $10 million, and the company generated a $3 million loss in 2017.

According to Itai Frieberger, Chief Executive of 888, “ The acquisition of the remaining stake in AAPN is an important strategic step towards 888 achieving its exciting long-term potential in the US. Taking outright ownership of AAPN gives 888 additional operational, technological and commercial flexibility to develop innovative and exciting new partnerships and launch in new states – through both B2B and B2C channels – as and when future regulation allows. This acquisition places 888 in an even better position to take advantage of the significant growth opportunities in the US and create additional value for our shareholders.”

The All American Poker Network was only active in New Jersey, but the fact that the company was one of the first to offer regulated online poker in the United States will make it a favorable candidate for future expansion. Now that 888 has complete control of the company, they can position the company for further growth in other states, including Pennsylvania.

Why Buy a Company Losing Millions?

This move may look a bit odd considering that the AAPN lost $7 million in 2017, but this move can be seen more as a forward-thinking move by 888 rather than one to bring immediate profits. Right now, only four states have regulated online poker, but that number is sure to grow at some point in the near future.

It’s no secret that the growth of iPoker has been slow, and we still don’t expect an “explosion” of growth. However, with states now taking a look or revisiting online gambling thanks to sports betting, this will open the door for online poker and other forms of gambling in other states. When this happens, 888 will be in a great position to take advantage of the expanded markets.

888 is the only online poker site operating in the three regulated states already live, and they will be in Pennsylvania once they launch online gambling in 2019. Acquiring the AAPN gives them an additional arm that they can use to expand online poker into other states. It also gives them the chance to form multiple partnerships in certain states. In addition to 888poker, they can use the AAPN brand to partner with multiple casinos, giving 888 a higher market share than PokerStars, partypoker, and other companies.

The $28 million spent by 888 may take years to recoup, but over time the company will be well positioned to compete against WSOP.com and PokerStars.

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