MGM, Boyd, in deals for US online poker

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MGM, Boyd, in deals for US online poker

* MGM would hold 25 pct of new company, Boyd 10 pct

* Deals contingent on legalization of online poker

Oct 31 (Reuters) – Casino operators MGM Resorts International and Boyd Gaming on Monday unveiled a plan to partner with online poker company Digital Entertainment , subject to the legalization of Internet gambling in the United States.

Gibraltar-based, the world’s largest publicly traded online gaming company, was formed earlier this year through the merger of Austria’s Bwin and PartyGaming. would own 65 percent of a start-up company that would offer online poker to U.S.-based players, while MGM would own 25 percent and Boyd would have a 10 percent stake.

U.S. prosecutors earlier this year accused the owners of three of the largest Internet poker companies of tricking regulators and banks into processing billions of dollars in illegal gambling proceeds.

That crackdown scuttled a similar deal between online gambling operator PokerStars and Las Vegas-based Wynn Resorts Ltd .

MGM closed its original Internet gambling operations in mid-2003, citing regulatory uncertainties.

“There is now an overarching opinion in Washington that this needs to be addressed,” MGM Chief Executive Officer Jim Murren told Reuters in a telephone interview. “U.S. citizens are putting their financial assets at risk on sites that the U.S. government has no comfort over how they are being operated.”

Wynn, MGM and other brick-and-mortar casino operators have been lobbying hard in recent years for U.S. legalization of online poker — which they say is primarily a game of skill, rather than other forms of gambling where the customer is playing against the “house.”

Their goal is legislation at the federal level, but legalization efforts are also underway in several states.

“Federal legislation is a vastly better solution … to avoid any ambiguities in laws,” Murren said.

Casino companies argue that millions of Americans are already playing online poker on web sites operated from overseas and legalization would bring that revenue to the United States, where it could be taxed, jobs would be created and integrity could be assured.

Opponents, including groups like the Southern Baptist Convention, say online gambling is an irresponsible way to raise revenue.

Boyd and MGM also said each has agreements to use’s technology under its own brands.

MGM owns 10 casinos on the Las Vegas Strip, ranging from Circus Circus to the Bellagio, as well as casino-resorts in Mississippi and Michigan and joint ventures in New Jersey and Macau, the only place in China where gambling is legal.

Boyd, which runs Las Vegas properties that cater mainly to local residents rather than tourists, owns and operates 16 casino properties in six states.