Although Bwin Interactive Entertainment A.G. could neither confirm nor deny the possibility of spinning off its payments business as a standalone, the company told IGamingNews its Cactus-branded prepaid cards will, in the coming weeks, launch in the United Kingdom.
"We are examining all of our options, and we are leaving all of them open -- we're not saying no to anything," Kevin O'Neal, a press officer with Bwin, said Wednesday in a telephone interview.
A small wave of intrigue was created this week when Ivor Jones, an analyst with Evolution Securities, published a note characterizing Bwin's in-house payments business as a "hidden asset" -- with over one million active users -- "that is now in a commercial and structural position to captalise on the investment which has been made in it."
A product of heavy investment in recent years, Bwin's payment processing arm, Mr. O'Neal explained, consists of two entities.
CQR Payments Solutions G.m.b.H., based in Vienna, is a payments service provider -- or PSP, in payments parlance -- that manages Bwin's relationships with payment mechanisms like Germany's Giropay or Italy's CartaSi.
Vincento Payment Solutions Ltd., on the other hand, is an e-money issuer in London. Vincento holds an e-money license from the United Kingdom's Financial Services Authority, and under that license has authority to, among other activities, issue prepaid cards.
Mr. Jones said that Bwin's plans to issue prepaid cards, significantly, are a signpost for its interest in converting existing customer accounts into e-wallet accounts.
An e-wallet, simply, would allow Bwin's customers to spend money with merchants other than Bwin. The Cactus prepaid card, therefore, would provide customers a way to withdraw cash from their e-wallet via ATMs or spend e-cash in shops that accept Visa or MasterCard, for example.
Mr. Jones said that like other of its sector competitors, Bwin developed and operates a proprietary payment processing solution. But unlike its competitors, he said, Bwin has established its payments business as one that could serve a wide variety of merchants -- of which Bwin, eventually, could be only one.
He theorized that were Bwin's e-wallet to remain in-house, other gaming merchants would be unlikely to accept it for payment, as, in doing so, those merchants would be losing valuable customer data to their competitor, Bwin.
Although Mr. O'Neal could not comment on this theory, Mr. Jones suggested Bwin could best leverage the investment in its payments business by spinning it off.
As a standalone entity, he said, the payments business' prospective customers -- gaming merchants, most likely -- would be less concerned about divulging customer data if the payments business were to exist apart from Bwin's gaming business.
"Any attempt to quantify this option would be premature, but we note that payments businesses are trading on higher multiples than Bwin even under the currently tough market conditions," Mr. Jones said.
Mr. O'Neal could not comment on whether Bwin had received any preliminary inquiries from other gaming operators about its payments business.
Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.