In something of a doubling-down move to keep its options open in a slowly-developing regulated US online poker, 888 Holdings Plc has decided to buy out its partner investors in the All-American Poker Network (AAPN) in a $28 million deal. 888 Holdings, which was formerly a prominent but still-minority owner, at 47%, will pick up the remaining 53% of the entity’s shares, making it the AAPN’s sole owner and operator.

The vast majority of that outstanding 53% of AAPN was held by Avenue OLG Entertainment LLC, which was 888’s primary venture-capital partner back in 2013 when the AAPN was envisioned. A small bit of AAPN has been held by a handful of other investment entities, and via this deal, 888 picks up those shares as well.

The AAPN was created in late 2013 as a vehicle for possible liquidity-sharing sites between sites in which 888 implemented its online-poker software with a casino partner. At the time, Delaware, Nevada, and New Jersey had quickly become the first three US states to formally authorize and regulate online poker, and 888 had business deals in all three states. 

The thought behind the AAPN’s creation was that more US states would soon be onboard, and that liquidity-sharing deals between all these states would soon be hammered into place. That hasn’t really happened, for several reasons. Pennsylvania became the fourth US state to legalize online poker, but that occurred just in 2018; that process has been stymied for the most part in pro-gambling US states by greater interest in sports-betting legalization and by widespread opposition to expanded online gambling in states with powerful tribal-gaming interests, as happened in California.

The liquidity-sharing deals turned out to take longer than expected as well.

All of that meant that the AAPN’s US-conquering plans ended up on the back burner. It’s cute to remember that the first “official” AAPN was supposed to be launched with Treasure Island in Nevada, and… well… that site never came to be. Since then, the AAPN moniker has been applied to most US online offerings powered by 888. The announcement about this ownership shift, for example, cites the 888poker and 888casino brands in New Jersey, only one of which actually offers online poker.

Instead, it appears that Avenue OLG decided the opportunity just wasn’t that valuable any more, and 888 was left to take over sole control, in the event some of those hoped-for developments actually do occur. The 888 presser barely mentions any AAPN specifics; instead, it’s more of a “cog in our greater plans” type of thing. Check out this, about the reasoning behind the deal:

The Transaction will give 888 independent control of its growth strategy in the US moving forward. This strategy includes signing new partnerships and continuing to deploy its proprietary products and technology (both B2B and B2C) in new states as they regulate. Over recent months, 888 has also further strengthened its position in the US by:

• In September launching 888sport in New Jersey alongside its established poker and casino brands, marking the first time that 888 has offered sports betting in the United States and paving the way for the Group to launch 888sport in additional US states as future regulation allows; and

• Signing a landmark sponsorship agreement with the New York Jets of the National Football League (“NFL”), marking the first such agreement between an NFL team and a pure-play online gaming operator.

There’s also the mandatory quote, here attributed to Itai Frieberger, the 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,” Freiberger purportedly said. “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 AAPN joint venture has been a very successful endeavour for the Group. It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years whilst also investing in other global regulated markets. I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.”

We’ll see if the AAPN can ever capture the relevance its creators envisioned. For now, the waiting game continues.