Caesars has sold WSOP to GGPoker

[Dan Druff]

I once said that Caesars would never sold WSOP. I figured that it's reliably profitable, and far too valuable to ever sell.

I was wrong.

Embedded Tweet

https://twitter.com/CaesarsEnt/status/1819101984709898531


Here is the press release: https://newsroom.caesars.com/press-r...n/default.aspx

Caesars Entertainment, Inc. (NASDAQ: CZR) (“Caesars”) today announced the signing of a definitive agreement to sell its intellectual property rights for the World Series of Poker ® (“WSOP”) brand to NSUS Group Inc. (“NSUS”), a leading investment group in the iGaming space known for successfully launching several groundbreaking ventures, including the innovative online poker room, GGPoker. The transaction, valued at a total of US$500 million, includes US$250 million in cash and a $250 million promissory note due five years after the transaction’s closing date (the “Closing”) secured by the WSOP intellectual property assets being sold.

As a part of this transaction, Caesars has secured the right from NSUS to continue hosting the WSOP’s flagship live tournament series at its Las Vegas casinos for the next 20 years. In addition, brick-and-mortar poker rooms currently operated by Caesars will continue to feature WSOP branding, and Caesars destinations will continue to enjoy preferential rights to host live WSOP Circuit (WSOP-C) events going forward.

Caesars Digital will also receive a license from NSUS to continue operating its recently upgraded WSOP Online real-money poker business in Nevada, New Jersey, Michigan, and Pennsylvania for the foreseeable future but will otherwise be restricted from operating online peer-to-peer real-money poker operations for a specified period of time and subject to certain exceptions.

“We’ve enjoyed a longstanding and successful partnership with GGPoker that has helped spur the growth of the WSOP brand,” said Eric Hession, President of Caesars Digital. “This transaction is an exciting step for Caesars as a company and the WSOP brand as it continues to evolve. We can’t wait to see what NSUS has in store for growing the WSOP’s legacy in poker, and we look forward to continuing to deliver an unmatched and familiar experience to poker players going forward.”

“After collaborating with Caesars Entertainment for years, NSUS Group, the operators of GGPoker, is thrilled to announce their new role in leading the World Series of Poker, the world’s most renowned poker brand,” said Michael Kim, Chief Executive Officer of NSUS Group Inc. “We will leverage GGPoker’s cutting-edge technology and industry expertise to create an exciting future for WSOP, ensuring players have an increasingly improved, safe, and seamless poker experience. Under the new leadership, NSUS intends to expand WSOP worldwide, positioning it at the forefront of poker’s growth.”

This sale is subject to customary regulatory approvals and other closing conditions and is expected to close prior to the end of 2024. Kirkland & Ellis LLP provided transactional counsel and Latham & Watkins LLP acted as finance counsel to Caesars, while NSUS was represented by Greenberg Traurig, LLP.

For fans of Yebsite, Greenberg Traurig was the firm which represented Mason Malmuth in the suit against him.

Greeberg Traurig also contacted me regarding a bullshit "content theft" issue alleged by Mason, but I refused to budge, since I was in the right. I ended up making a few minor concessions in exchange for a few minor concessions on their end, including unbanning me from the site (which Mason later violated lol).

I did run up Mason's bill by purposely staying on the phone with the lawyer for 90 minutes.

Anyway, I'll comment what this means in the next post.

[sonatine]

was surprised to hear they were basically compelled to sell the rights because they are 12bn in the red.

[Dan Druff]

NSUS Group is GGPoker. The CEO, Michael Kim, is actually the owner.

Before I get into this WSOP stuff, I want to diverge into a personal story about GGPoker and its executives.

I met Michael Kim in 2022 when I was unexpectedly invited to a private GGPoker party at a large Nobu Hotel suite. It is unclear why GGPoker invited me. The invite came at nearly the last minute, presumably because someone advised them to invite me.

I did not meet Michael until the very end, when Haley Hintze introduced me to him. At first he was just exchanging pleasantries and thought I was just another idiot poker pro. However, when I started discussing GGPoker's place in the industry, and compared it to the some of the mistakes made by onetime competitor Run It Once Poker, his ears perked up. He realized I had vast knowledge of the backside of the industry, and we suddenly had a detailed conversation about everything. His tone very much changed (for the better), and by the end he gave me his business card and told me to contact him. I read this as his wanting to possibly hire me for something within the company, but I decided I wasn't interested in this, as I wanted to remain 100% neutral as a longtime industry watchdog. I never contacted him, but still have the business card.

At the same time, I recognized a familiar face -- Steve Preiss, also known as Wicked Chops. He was a high level executive at GG at the time, and we talked about the old days in the 2000s. Recall that Wicked Chops was a politically incorrect, 2000s-era poker gossip site, and was friendly with Neverwinpoker. Preiss separately gave me his contact info, after we had a nice conversation for awhile. Steve was not the one who invited me, as he was legitimately surprised to see me. Steve moved on to Pokerstars in 2023.

If I had really wanted to break into a high level job in the poker industry, that was probably my chance. I had a CEO who thought I was intelligent and had my finger on the pulse of the industry, and a high level executive who liked me from our past interactions in the 2000s. I just decided not to bother with it.

Nowadays GGPoker probably would not hire me. I've been too critical of them, most notably of their superuser scandal in December 2023, which I felt was mishandled in several ways. I was one of the more aggressive people calling them out. So it goes.

Anyway, back to WSOP...

[Dan Druff]

First off, it is important to understand that WSOP and GGPoker have had a longtime marketing partnership.

GGPoker has a big logo on all the WSOP felts.

They also run the Canadian WSOP site, wsop.ca.

GG also has a lot of satellites for non-US players to win their way directly into the WSOP. They've also run online WSOP bracelet events in the past (though most have not been on GG).

Still, I never thought Caesasrs would outright sell the WSOP to them. That's a shock to me, to be honest.

So what does this mean for the players?

First off, the most important detail is that WSOP will continue operating at Caesars properties (presumably Paris/Horseshoe) through at least 2044. It is not clear if the existing WSOP management (Jack Effel, Ty Stewart, etc) will remain in place, but I'm guessing they will.

It is also not clear if GGPoker will send their own employees to work WSOP, or if all of the employees will work for Caesars. My guess is that the staff will be almost all Caesars employees, but possibly some GGPoker managers might get involved.

What about the events? The rake? The structures? Will these be decided by GGPoker, or Caesars?

To me it appears that GGPoker bought the intellectual property of WSOP, and therefore has the ultimate say in what happens with it. The only thing they can't do is move the WSOP away from Caesars properties until after 2044, and they have to give priority to Caeasars properties to hold circuit events. Beyond that, it seems like GGPoker has the flexibility to do what they want with it.

But will GGPoker change anything? For the moment, probably nothing major. There's the old adage, "If it works, don't fix it."

The WSOP works. It's hugely successful. It's extremely popular with both pros and recreational players. There is no need or reason to change things. GGPoker might integrate itself more into the marketing and branding, but I think the WSOP itself will be quite similar to what we just saw in 2024.

Might GGPoker increase the rake? They could. It is not clear how the money will be split between the two companies going forward. Clearly Caesars will be getting something out of continuing to operate it on their properties for the next 20 years, but it's not clear if this will be a rental of facilities for a flat rate type situation, or if there will be a rake/profit split. However, GGPoker might want to increase rake in order to make back the money they just invested.

Why would Caesars sell WSOP? Apparently they need money to pay down their existing debt (said to be $12.4 billion), and might buy back some stock.

Caesars sees this as a win, because they get a cash infusion, yet still remain the home of the WSOP for the next 2 decades.

What about online? Interestingly, Caesars will retain the rights to run wsop.com in the existing states of New Jersey, Nevada, Michigan, and Pennsylvania, but are now restricted from operating ANY online poker sites other than those for a "specified period of time". This means there definitely won't be any further expansion to wsop.com to other states, unless it's a GG branded site.

It also isn't clear if Caesars is allowed to use WSOP branding in future promotional material. Can they advertise Horseshoe Las Vegas as home of the WSOP? Or is that a violation of the intellectual property rights agreement? Presumably that's spelled out somewhere. The association with WSOP has been a selling point for Caesars over the past 2 decades.

Speaking of the past 2 decades, I see on social media that there's some confusion regarding how Caesars acquired the WSOP in the first place. Prior to 2004, WSOP was owned by Binion's Horseshoe. However, Binion's was run into the ground by then-owner Becky Behnen, and it essentially went broke. In fact, at one point authorities seized over $1 million from the cashier cage to pay debts to labor unions. The casino was shut down because their meager cash could no longer cover the chips they held, so Behnen was desperate to sell. Harrah's, which would soon become Caesars, swooped in and bought it at a bargain. They then took the rights to the WSOP and resold Binion's to a third company. When the smoke cleared, Harrah's/Caesars had acquired the WSOP brand for free. This was one of their best business decisions of all time.

[garrett]

NSUS Group is GGPoker. The CEO, Michael Kim, is actually the owner.

Before I get into this WSOP stuff, I want to diverge into a personal story about GGPoker and its executives.

I met Michael Kim in 2022 when I was unexpectedly invited to a private GGPoker party at a large Nobu Hotel suite. It is unclear why GGPoker invited me. The invite came at nearly the last minute, presumably because someone advised them to invite me.

I did not meet Michael until the very end, when Haley Hintze introduced me to him. At first he was just exchanging pleasantries and thought I was just another idiot poker pro. However, when I started discussing GGPoker's place in the industry, and compared it to the some of the mistakes made by onetime competitor Run It Once Poker, his ears perked up. He realized I had vast knowledge of the backside of the industry, and we suddenly had a detailed conversation about everything. His tone very much changed (for the better), and by the end he gave me his business card and told me to contact him. I read this as his wanting to possibly hire me for something within the company, but I decided I wasn't interested in this, as I wanted to remain 100% neutral as a longtime industry watchdog. I never contacted him, but still have the business card.

At the same time, I recognized a familiar face -- Steve Preiss, also known as Wicked Chops. He was a high level executive at GG at the time, and we talked about the old days in the 2000s. Recall that Wicked Chops was a politically incorrect, 2000s-era poker gossip site, and was friendly with Neverwinpoker. Preiss separately gave me his contact info, after we had a nice conversation for awhile. Steve was not the one who invited me, as he was legitimately surprised to see me. Steve moved on to Pokerstars in 2023.

If I had really wanted to break into a high level job in the poker industry, that was probably my chance. I had a CEO who thought I was intelligent and had my finger on the pulse of the industry, and a high level executive who liked me from our past interactions in the 2000s. I just decided not to bother with it.

Nowadays GGPoker probably would not hire me. I've been too critical of them, most notably of their superuser scandal in December 2023, which I felt was mishandled in several ways. I was one of the more aggressive people calling them out. So it goes.


Anyway, back to WSOP...

[Dan Druff]

Sale has closed.

Press release:

TORONTO and LAS VEGAS (October 29, 2024) – Caesars Entertainment, Inc. (NASDAQ: CZR) (“Caesars”) today announced the closing of the previously announced sale of its intellectual property rights for the World Series of Poker® (“WSOP”) brand to NSUS Group Inc. (“NSUS”). As previously disclosed, the transaction includes US$250 million in cash and a $250 million promissory note due five years after the transaction’s closing secured by the WSOP intellectual property assets being sold.

Caesars retains the right from NSUS to host the flagship WSOP live tournament series at its Las Vegas casinos for the next 20 years and will receive a license from NSUS to continue operating its recently upgraded WSOP Online real-money poker business in Nevada, New Jersey, Michigan, and Pennsylvania for the foreseeable future but will otherwise be restricted from operating online peer-to-peer real-money poker operations for a specified period of time and subject to certain exceptions. In addition, brick-and-mortar poker rooms currently operated by Caesars will continue to feature WSOP branding, and Caesars destinations will continue to enjoy preferential rights to host live WSOP Circuit events going forward.

Concurrent to the transaction, several long-time WSOP executives will transition to key leadership roles within the NSUS team. Ty Stewart will serve as Chief Executive Officer of the newly formed WSOP subsidiary, while Gregory Chochon has accepted the position of Chief Operating Officer. Erik Eidissen also joins as Communications Manager. With more than 30 years of combined experience managing the WSOP brand, these employees will lead the next phase of growth and integration under new ownership.

Not much new here, except the last paragraph.

It appears Ty Stewart is now a GGPoker employee, rather than Caesars, and will continue running the WSOP. It also appears two other Caesars executives associated with the WSOP, Gregory Chochon and Eirk Eidssen, will also move over to work for GG/WSOP. It is unclear what will happen to Jack Effel, but I'm guessing he will transfer over as well.

[Dan Druff]

And you know who has to be secretly hating this?

Phil Galfond.

He announced his poker site Run It Once in 2016, though it had not yet been developed. GGPoker started in 2014, and at the time was not a huge player, focusing on the Asian market.

GGPoker grew in popularity in the late 2010s, despite never serving the US market. Now it's the biggest online room. Run It Once, also slated to appear in the late 2010s, took years to finally get to market, and failed miserably the entire way.

Phil Galfond was/is a big name in poker, whereas GGPoker's owner/CEO (Michael Kim) was an unknown. If managed correctly, Run It Once could have been what GG is, and today Phil Galfond could own the WSOP. How epic would that have been for him? He would have been an absolute legend, going from young PLO crusher to owner of the WSOP. Maybe in another universe...