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WASHINGTON, D.C. - The partnership between Dan Gilbert's Rock Gaming and Caesars Entertainment Corporation just got deeper as Rock agreed to purchase part of Caesars Interactive, the casino company's interactive online gaming subsidiary.
In a filing with the U.S. Securities and Exchange Commission Monday Rock will pay Caesars $60.8 million for an undisclosed percentage of the company that operates the World Series of Poker and recently launched Caesars Casino for Facebook.
The filing also shows that Rock has the option to up its shares in the company by roughly 25 percent down the road for $19.2 million. Rock and Caesars are partners in the operation of two of Ohio's four new casinos in Cleveland and Cincinnati.
'Rock Gaming is pleased to expand our relationship with the Caesars organization through an investment in Caesars Interactive Entertainment," the company said in a prepared statement. "Through our existing joint venture to develop full-service urban casinos in Cleveland and Cincinnati... we believe that an investment in CIE is a natural next step to align our interests and talents with Caesars."
The laws governing online gambling in the U.S. are in a state of change following last year's interpretation of the Wire Act by the Justice Department that altered its long-held view that all online wagering was illegal. The new position implies that the act applies to only sports betting.
Regardless, there's money to be made in social gaming which is a significant part of Caesars Interactive. The potential is evident by looking at companies like Facebook's Zynga, which operates Farmville, Mafia Wars, Words with Friends, Texas Hold'em Poker and many others.
When Facebook went public earlier this year it was revealed that Zynga made up about 12 percent of Facebook's revenue.
Having a strong social online gaming presence is important to have as other laws and restrictions change in the U.S.
In addition to their partnerships in the two Ohio casinos, Rock Gaming has an option to purchase part of Caesars Thistledown Horse Racing track in nearby North Randall, Ohio and the two filed a joint application last year in the state of Maryland for the license to operate a video lottery terminal facility in Baltimore.
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