To run the site, Playboy has announced plans to partner with Toronto-based gambling software company CryptoLogic.
Under the terms of the three-year licensing deal, CryptoLogic will provide the software needed to run the Playboy-branded site.
“In CryptoLogic, Playboy has found an innovative and proven partner who can help us capitalize on the growth and excitement of online poker," Playboy CEO Christie Hefner said.
The poker site partnership builds on an existing relationship between the two companies, which previously announced plans to join forces for an online Playboy casino.
Playboy has said that it will cross-promote the gaming sites in its other print and online properties.
While few would question the potential economic upside of entering the online gambling business, Playboy’s decision is not without legal risk.
Concerns over the legality of Internet gambling have prompted Playboy to restrict U.S.-based users from gambling on the site.
The U.S. Department of Justice has taken a strong stance against Internet gambling, insisting that the 1961 Wire Act applies to online gambling. However, federal courts have yet to give a final opinion on the matter.
In the meantime, David Carruthers, the former CEO of British-based BetOnSports.com has pleaded guilty in federal court in St. Louis on racketeering and fraud charges. Carruthers’ site, though based overseas, did business in the U.S. He is believed to be only the second Internet gambling operator to be prosecuted under the Wire Act, which specifically targets sporting events, not games such as poker.
A bill, which recently passed the U.S. House of Representatives in July, seeks to ban all forms of Internet gambling and “attacks poker in many ways,” Internet gambling law expert Nelson Rose said. The bill, which is part of the Republican Party's "American Values Agenda,” must next pass the Senate, where it is expected to face strong opposition from both Nevada Senators, according to William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno.
Legal concerns aside, Sue Schneider, who publishes Interactive Gaming News, believes Playboy’s decision to enter the online gambling arena, even without a U.S. consumer base, will yield dividends for the company.
“Everybody knows Playboy,” Schneider said. “[They] have an amazing international brand.”
According to Schneider, Playboy’s brand appeal should help it overcome obstacles that undid bids by MGM Mirage and Harrah’s to launch online gambling ventures. Both companies created sites that steered clear of the U.S. market for legal reasons, but according to Schneider, neither company was popular enough overseas to make a serious international push and overcome the American market handicap.
The U.S. is believed to comprise half of the world's online gambling market, which is estimated to be worth up to $12 billion, Eadington said.
