Editorial

Tuesday, 06 April 2010 07:19

Sponsoring a major poker event like the World Series Of Poker is an enormous undertaking and as such, the sponsor expects a return on their investment.

That investment can be turned into a profit both in terms of revenue as well as brand profile and status, which are equally important to the future revenue generation of the company. So when the online gambling company Ultra Internet Media S.A. signed the deal to sponsor the WSOP for 3 years, they expected their name and the name of their Everest Poker brand to be prominently displayed throughout the tournament. In most cases this was the case, but in some cases it was not. Because of this, not only will Ultra Internet Media pull out of the WSOP for 2010, they have now filed a lawsuit against its owner, a subsidiary of Harrah’s Entertainment Inc. This article explains why that has happened and provides an insight into the world of sports sponsorship.

Everest Poker was the prominent sponsor of both 2008 and 2009 tournaments. For the tournament held in 2008, Ultra Internet Media made payments totalling $6.2 million, while for the tournament held in 2009, it paid $7.9 million. In those two years, Everest Poker was widely known as the tournament's on-felt sponsor. For the upcoming 2010 tournament, set to begin on 27th May and held at the Las Vegas Rio Hotel-Casino, which is owned by Harrah's, it pledged $8.4 million.

As stated in the lawsuit, for the tournaments held in 2008 as well as 2009, Ultra Internet Media paid the due amounts of sponsorship money to Harrah’s. However, it has now notified Harrah’s of their decision to pull out of this year's tournament.

As part of the deal for all three tournaments, the logo for Everest Poker was set to appear in a prominent place on the felt covering all the competition's tables, including the feature table's inner rung during the WSOP finals. Unfortunately, that sponsorship deal was breached when ESPN broadcasts by a France based affiliate, TV channel RTL9, did not display either Everest’s name or their logo. To make matter worse, they instead featured a competitor's name and logo, that of Full Tilt Poker.

A court order is now sought by the lawsuit to validate Ultra Internet Media’s claim of the breach of contract. The lawsuit charges that in February 2009 a meeting was held at ESPN headquarters located in Bristol, Connecticut, by officials with Harrah’s, ESPN and Everest, to discuss issues related to the broadcasts. It also charges that Harrah’s made an agreement with ESPN to control RTL9 requiring them to cease violating the agreement during broadcasts and transmissions appearing in France.

Despite this agreement, the lawsuit charges the name and the logo of Full Tilt Poker were included in one WSOP event broadcasted in France by RTL9, as recently as 14th February 2010. The suit also noted that Ultra Internet Media does not obtain any of their gaming revenue or make any profits from the Internet in the US. Its greatest source of income and profit comes from customers in Europe and particularly France.

Several companies are linked in this legal wrangle. One of these is GigaMedia Ltd, which developed the online gambling software used by Ultra Internet Media's Everest Poker. In December 2009, GigaMedia announced sold 60 percent of the business that creates online gambling software to Mangas Gaming, a French company with an extensive portfolio of European gambling companies. These include BetClic, Bet-at-Home and Expekt, which offer sports betting, casino and poker services to over four million registered users across some 25 countries.

This has created a strategic alliance for the Mangas Gaming group with Everest Poker as its main poker website. GigaMedia’s software powers Everest Poker, one of the most popular poker websites in the world and, until this announcement to quit, the official felt sponsor for the WSOP. Also in 2008, GigaMedia touted the WSOP sponsorship by its flagship Everest Poker product.

At the time of writing, Harrah’s were unable to make a comment on the lawsuit or its allegations as it had not yet been served on them.

The upshot of all of this is that the WSOP is currently without a felt sponsor for this year's tournament which will affect the overall prize money on offer to attract the players to what is the leading poker event globally held. The retraction of Ultra Internet Media as sponsor will certainly send a message to any other company that may have been considering taking on the role of sponsor. While it may not be possible to fully control all the media that televises the event, measures need to be taken to tighten up the rules by which affiliate TV companies promote events that are financially supported by the companies that expect their brand to be fully displayed in all stipulated areas.

This may not be a complete disaster for the 2010 WSOP, but it will certainly leave a dent in its credibility and the attractiveness to poker players the world over.