Shuffle Master drops plans to buy Ongame Network
LAS VEGAS (AP) — Slot machine and gambling table maker Shuffle Master Inc. said Wednesday that it no longer plans to acquire Ongame Network Ltd.
Shuffle Master signed an agreement in February to buy the online poker provider for 19.5 million euros ($25.7 million) in cash from from bwin.party Services GmbH of Austria. Shuffle Master would have to pay paid another 10 million euros ($13.2 million) over the five years following the deal if real-money online poker were legalized in the U.S. during that time.
Shuffle Master had sought the deal because it's trying to capitalize on legal online gaming worldwide.
CEO Gavin Isaacs said in a statement Wednesday that the company remains an "ardent believer" in the earning potential of online gaming. But, when it made the deal for Ongame, it thought general market conditions and Ongame's sales would prove fruitful. But business conditions in Europe have deteriorated so the company no longer feels the deal makes financial sense.
"It has become evident to us that Ongame's operations post-acquisition will not achieve the near-term results we initially expected and will require a larger ongoing investment than anticipated," Isaacs said. "Although we believe in its eventuality, there is also uncertainty surrounding the timing of legalization and the rollout of online poker in the U.S. at both the state and federal levels."
Shuffle Master said neither company needed to pay a breakup fee for ending the deal.
Shares of Las Vegas-based Shuffle Master fell 72 cents, or 5.4 percent, to $12.62 by midday.