This week’s surprise resignation of bwin.party co-CEO James Ryan might just have more to it than meets the eye, and it has some relevance to bwin.party’s efforts to obtain Nevada licensing for online poker software services.
Ryan, who co-helmed the company following PartyGaming’s 2011 merger with Austrian bookmaking giant bwin, saw the company through a handful of recent turbulent events, including PartyGaming’s settlement with the United States Department of Justice in which Party forked over $105 million for its previous US-market activities.
Ryan, a Canadian national, has a long career in the online-poker and gaming industry. His early work history included stops at the tiny St. Minver Network and at Cryptologic, but he’s perhaps best known for his several years’ service as the CEO of Excapsa Gaming (the parent company of UltimateBet), which ran from 2003 or thereabouts to late 2006 or early 2007.
It was probably the latter, but the exact date of his exit from the UB world has been buried by that company’s officials. Still, curiosities abound.
Ryan was brought on to UB/Excapsa as a corporate headhunter, with the specific goal of helping position the company for its IPO. In due time that IPO was launched on the London Stock Exchange’s Alternative Investment Market (AIM), and Excapsa’s primary shareholders, including Russ Hamilton, Greg Pierson, Phil Hellmuth, Annie Duke, Mansour Matloubi, Ryan and others all profited handsomely, to the tune of tens of millions of dollars.
Then the UIGEA happened, wiping out the liquidity of that IPO, even though the early investors had long since cashed out the money. What was left in the wake of the UIGEA was a hurried sale to friendly rival Absolute Poker, in which Ryan himself played a significant role.
The problem for Ryan is that he was always the hired gun at Excapsa, the outsider brought in to fill a specific role, and when the company was sold to AP, he no longer had a viable role. So he was released from the company, but apparently with a non-compete in effect, and that non-compete played an important role in the later revelation of the corporate structure behind UltimateBet.
Ryan, it seems, had little intention of sitting on his hands, and he’d already had contact with PartyGaming, which came calling some time in 2007 as they searched for a replacement for the outgoing CEO, Mitch Garber. There was, however, the matter of Ryan’s Excapsa non-compete. Ryan was tied into the efforts to dissolve Excapsa as a going concern following the sale to AP; the liquidation proceedings were technically titled “Ryan v. Excapsa”.
Ryan wanted to make the jump to Party, and he had access to all the ownership records at UB, which those owners, mostly Americans, did not want released after the UIGEA was enacted. According to company insiders, it was at James Ryan’s behest that an extensive list of ownership proxies was released following the revelation of UB’s insider cheating scandal. Those proxies pointed to some but not all of the prominent owners at UltimateBet, and the implied threat therein was that Ryan possessed far more damaging documentation. It was under those conditions that Ryan was allegedly released from his UB non-compete and allowed to take over at PartyGaming in early 2008.
One prominent industry insider once told me that James Ryan “might be the single stupidest person in online poker,” and while I can’t make that judgment, I can assert that without Ryan’s accidental cooperation, the ownership structure behind UB might have remained far more hidden. However, Ryan failed to consider that his own hands were far from clean, as he was involved in covering up a cheating episode at UB not directly connected to the Russ Hamilton-led insider cheating operation.
There is an old saying that what comes around, goes around, and James Ryan is a prime example.
Which brings us back to the move to Party, Party’s merger with bwin, and that company’s recent efforts to obtain Nevada licensing.
Bwin.party has already signed deals to offer an online-poker platform to more than one casino brand in Nevada, if they are able to obtain proper licensing. However, the regulations as drafted in Nevada include a December 31, 2006 “bad actor” cutoff date regarding previous US services. PartyPoker left the US in late 2006, immediately after the UIGEA was signed into law by George W. Bush. Bwin never served US customers; no problem there.
But Ryan? He worked at Excapsa into 2007, even if you’d be hard-pressed to find certain official Excapsa corporate documents on the web these days that detail Ryan’s ending date of service there. Key employees such as a CEO (Ryan) are subject to the same cutoff-date restrictions as the applicant companies themselves, in the Nevada process, and there is a legitimate chance that Ryan’s presence within the bwin.party executive structure could be a red flag during the screening process.
Besides, the company doesn’t need two CEOs to screw things up. The other guy (Teufelberger, who came from the bwin side) just got himself detained briefly by Belgian authorities due to bwin.party’s insistence that the company can offer services there, though Belgium says otherwise and has blacklisted bwin.party’s domains. If the guy who’s the intentional scofflaw toward Belgium is the better of two CEOs heading forward, then Ryan just may have a lingering problem.
Is Ryan stepping away to make bwin.party’s Nevada application process a little bit more likely to pass muster? That’s the $64,000 question. bwin.party has some other baggage to deal with from Party’s earlier US days, such as the fact that it was PartyGaming that introduced blackjack and its PartyCasino suite of online-gambling casino audiences to the US… briefly… before yanking them in the face of the UIGEA.
Then there’s the whole PartyMarkets thing, a good tale for another day.
One well-placed Nevada source has told me that he believes bwin.party’s Nevada application has always been “DOA”. I’m not sure I believe that, just because bwin.party is a pending partner for large, influential casinos that want bwin.party to be approved. It seems clear, however, that the company has an image makeover in progress, and part of that makeover might just be the scrubbing away of the Ryan legacy.