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888 CEO Brian Mattingley Discusses Launch, Interstate Compacts, and More

It's been an exciting week for poker players in Nevada. On Monday, the World Series of Poker announced that its real-money online poker operation will launch in the Silver State on Thursday, Sept. 19. More exciting news came on Tuesday when opened its doors early, inviting pre-registered players to participate in the real-money action ahead of the rest of the state.

The brand power of the Caesars and WSOP in the gaming industry is immense, and making the online operation even more powerful is the partnership with Gibraltar-based 888 Holdings. 888, which owns and operates the highly successful 888poker outside of the U.S., will act as the software service provider for the WSOP's online offering. The venture is expected to create major competition for Ultimate Poker right out of the gate.

888 has additional interests in Nevada, New Jersey, and Delaware, making the gaming giant an instant leader in the emerging U.S. market. On Wednesday, we sat down with 888 Chief Executive Officer Brian Mattingley to discuss the company's exciting return to the U.S., as well as the important role that interstate online gaming compacts will have in strengthening the industry.

PokerNews: First off, congratulations on the launch in Nevada. It's been seven years since 888 pulled out of the U.S after the passage of the UIGEA. How does it feel to officially be back in the market doing business?

Mattingley: It's really great! It has taken a long time to get ourselves ready for this, a long time waiting, but it's a great feeling when you pull the whole thing together and you're now in a situation of launching. It's a very, very good day.

It was announced on Monday that would be opening its doors tomorrow, but players were able to access games yesterday. Can I assume that your software is under a beta-testing trial phase as we speak?

Yes, it is.

It took longer than expected for to get off the ground. How strenuous is the software testing phase in Nevada?

There's no doubt in my mind that the Nevada Gaming Control Board carried out rigorous testing of our software. And software is far from straightforward; it's very complex and very sophisticated. There's 20 years of development embedded within that software. And therefore it's not just a matter of taking a deposit and making sure the poker hands are shown right. Beneath that are huge algorithms, etc., which continue to drive the business. So I think the tests which have been taken by the control board have been arduous, and they've done an excellent job in testing our software. I'm full of admiration for what they've done.

What does it mean to have a brand like the WSOP on your side?

Absolutely superb. Probably the pre-eminent poker brand globally, and without a doubt the most recognized in the U.S. We are incredibly proud to actually join forces with Caesars for the launch of the absolutely superb WSOP brand.

Can you discuss the decision to create non-exclusive partnerships with Caesars, Treasure Island, and WMS in Nevada?

The strategy for us is to have forward partnerships with people who we can help, and they can also help further our interests in the U.S. Caesars Interactive is a straightforward B2B (business-to-business) contract where we power the online offer supplied by the WSOP. We have nothing to do with marketing or CRM (customer relationship management). We are purely and simply the engine which is driving the WSOP.

In the case of Treasure Island, we have an agreement with them to work on the back with their license so that we can launch the 888poker brand. That is now subject to verification and audit by the Nevada Gaming Control Board. As soon as the software has passed that specification, we can launch the 888 brand. The 888 brand runs under the AAPN (All American Poker Network) company which is an equity joint venture between 888 and Avenue Capital based in New York. That particular operation will be responsible for completing all aspects of the operation, such as powering the software, marketing, payments, etc. So the whole 888 operation and potentially another tactical brand that we will launch works on the back of the license with Treasure Island, and as part of the remuneration for Treasure Island to grant us that license, we have a B2B deal with them where we drive their poker network.

Ultimate Poker got about a five-month head start in Nevada. How big of an advantage did it give them over competitors?

I think whichever way you look at it, any first mover has an advantage. I think the brand of WSOP now become a serious competitor for them. The WSOP is renowned throughout the U.S., and I also think the marketing expertise and the drive of Caesars to promote that brand will be a formidable opportunity.

You said in a previous interview that it will take about two years for the real value of online gaming in the United States to become apparent. How crucial will interstate gaming compacts play into that value?

I think state compacts play a very significant part in the value of online gaming, particularly in the likes of Nevada and Delaware. I think compacts will allow customers to enjoy a better experience when liquidity is improved.

Would federal legislation in the U.S. be the optimal route for your company?

Naturally. Federal guidelines would absolutely be the optimal route. I don't think we're of the opinion that will happen, and therefore we are prepared to work with regulators from any state to help them understand what 888 is about, what its product is, what security systems we have, etc. It would be so much easier for us as software technology providers to have one set of rules.

One of my concerns of the moment is that the whole concept of online gaming is seen by certain people in the U.S. as an evil necessity. I am very concerned that people don't really understand the controls, the checks and balances, or the actual monitoring of players that goes on with online gaming, which is hugely different for a person of an undetermined age entering a casino in Atlantic City or the Strip and playing with $5,000. We know our customers, we check our customers, and we do a phenomenal amount of research to ensure that those are bona fide customers. We monitor their play, and if there are any signs that there is a problem, we will talk to those customers and monitor them closely.

I'm not sure that those things are well publicized or recognized in the U.S. Certain people in the U.S. see online gaming as a massive potential problem. I think it's far from that. One of the things I would like to try to do is to educate our critics as to the safety of online gaming.

888 was selected to be the primary provider of online gambling services in Delaware. Can a state that small survive on its own in this industry or will it depend on shared liquidity with other states?

I think that it can survive on its own. There are doubts that Delaware can generate sufficient interests and sufficient liquidity, but I think to make it really sustainable and to drive it through, the idea of compacts will become quite an important part of the operation.

Moving over to New Jersey — Will 888 be working with Caesars and the WSOP there, too?

Yes, 888 will launch with WSOP in New Jersey. It will also launch with AAPN, its 888 poker brand, as well. Other operators of significant size and interests may also potentially join forth.

Is the late-November launch in New Jersey still achievable, or can we expect delays into 2014?

We are following what the regulators are saying. We are compliant, we are ready to go, and we've applied for our licensing. We leave the rest in the hands of the regulator, and we are full of admiration for the way New Jersey has shown determination to launch in 2013. As of this moment in time there are rumors that there could be a delay, but we have not been given any formal indication of that. We are working toward the launch date at the end of November.

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