Global Cash Access snags Live Gamer deal, Gaming Control Board approval
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BY CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL
LAS VEGAS REVIEW-JOURNAL
Posted: Aug. 8, 2012 | 3:17 p.m.
Global Cash Access Holdings Inc. is moving into the social media and online gaming business with its partnership with Live Gamer, a move an analyst said Wednesday gives the Las Vegas-based company a significant competitive advantage in processing online payments.
The company said it signed a letter of intent to create the alliance with Live Gamer, which Global Cash Access describes as the "leading independent wallet, analytics and media supplier for the social gaming space worldwide."
Based in New York, Live Gamer calls itself a combined e-commerce and advertising platform.
The company has deals with Facebook, Electronic Arts and Sony Online Entertainment.
As a "wallet" provider, Live Gamer enables customers to spend real money on social and entertainment websites.
David Bain, an analyst with Sterne Agee, said Global Cash Access would gain "key technology for its I-poker processing platform and technology, and technology relevant for customers' social gaming initiatives."
"We believe the I-poker processing market is a $100 million plus ... opportunity with Global Cash Access having a significant first-mover advantage given both licensing and casino brick and mortar relationships," Bain said in a research report.
Financial terms of the deal and specific details of the alliance were not disclosed. Global Cash Access CEO Scott Betts announced the deal late Tuesday as the firm was announcing its second quarter earnings.
"Our proposed alliance with Live Gamer will combine Global Cash Access' cash management expertise with Live Gamer's cutting edge technology platform," Betts said. "We believe this alliance will position (us) well to develop integrated solutions as the social and Internet gaming markets continue to rapidly evolve."
Betts told analysts during a conference call that the alliance will prepare Global Cash Access for the launch of real-money online poker in Nevada, as the company positions itself to provide cash services to online gambling sites just as it provides them in brick-and-mortar casinos.
On Wednesday, the payment processing company received Nevada Gaming Control Board approval to be a service provider in the online poker industry. The Nevada Gaming Commission will consider Global Cash Access' license application on Aug. 23.
Shares of Global Cash Access gained 85 cents, or 12.94 percent, to close at $7.42 on heavy volume of 1.69 million shares traded on the New York Stock Exchange.
The company on Tuesday reported second quarter earnings of $6.8 million, or 11 cents a share, compared with $1 million, or 2 cents a share, in the same period last year. Revenue was $147.4 million, up from $135 million in the second quarter of 2011.
Analysts surveyed by Yahoo Finance expect third-quarter earnings of 20 cents a share on revenue of $152.8 million.
Betts attributed the jump in second quarter earnings primarily to its acquisition in November of MCA Processing LLC, coupled with "modest organic growth" in the company's base business.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or .
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