Company sues World Series of Poker over tourney sponsorship

By Steve Green (contact)

Friday, April 2, 2010 | 1:22 p.m.

An Internet gambling company is suing the World Series of Poker in hopes of getting out of a $22.5 million sponsorship deal with the tournament.

A lawsuit was filed in federal court in Las Vegas on Thursday by Ultra Internet Media S.A. against the Harrah’s Entertainment Inc. subsidiary that owns the World Series of Poker.

Ultra Internet Media (UIM), which says it’s organized under the laws of Nevis, West Indies, says in the lawsuit it owns the Everest Poker brand and Web sites.

UIM says that in 2008 it agreed to sponsor the World Series of Poker for payments of $6.2 million for the 2008 tournament, $7.9 million for the 2009 tournament and $8.4 million for the 2010 tournament that begins May 27 at Harrah’s Rio hotel-casino in Las Vegas.

Everest Poker was known in 2008 and 2009 as the on-felt sponsor of the tournament.

Everest said the deal called for Everest Poker's logo to appear prominently on the felt on every table in the competition, and on the inner rung of the WSOP feature table during the finals.

UIM says in the lawsuit it paid the amounts due to Harrah’s for the 2008 and 2009 events, but that on Thursday it notified Harrah’s it is pulling out of the 2010 tournament.

UIM said that’s because in previous years Harrah’s breached the sponsorship deal when ESPN broadcasts of the tournament by an affiliate in France, television channel RTL9, failed to display Everest’s name and logo and instead featured the name and logo of Everest competitor Full Tilt Poker.

The lawsuit seeks a court order validating UIM’s claim that the contract has been breached.

The suit charges that officials with Harrah’s, Everest and ESPN met at ESPN headquarters in Bristol, Conn., in February 2009 to discuss issues with the broadcasts and that "Harrah’s and ESPN agreed to control their affiliate, RTL9, and require RTL9 to cease causing violations of the agreement during its broadcasts and transmissions into France."

But as recently as Feb. 14, 2010, the Full Tilt name and logo were included in a broadcast of a WSOP event into France by RTL9, the lawsuit charges.

"Every material breach of the agreement represents lost potential future profits, erosion of goodwill and compromise of UIM’s international business reputation," charges the lawsuit, filed by attorneys with the Las Vegas law firm Marquis & Aurbach.

The suit noted UIM does not generate gaming revenue or profits in the United States "by way of the Internet or telephone." Rather, its largest source of revenue and profit is from customers in France, UIM said.

Seth Palansky, a spokesman for Harrah’s Interactive Entertainment Inc. and Harrah’s World Series of Poker, on Friday said the company had not been served with the lawsuit and would have no immediate comment on the allegations.

Ultra Internet Media has been described in Securities and Exchange Commission filings as a licensee of online gambling software developed by GigaMedia Ltd., a company based in Hong Kong and in Taipei, Taiwan.

GigaMedia in December announced a deal to sell 60 percent of GigaMedia’s online gambling software business to European online gambling operator Mangas Gaming.

GigaMedia said Mangas, a French company, has an extensive European gambling portfolio, including BetClic, Expekt, and Bet-at-Home, that offer sports betting, poker and casino services to more than 4 million registered users in more than 25 countries.

"The strategic alliance will see Everest Poker joining the Mangas Gaming family as its primary poker site. Everest Poker, powered by GigaMedia’s software, is one of the world’s most popular poker sites and the official `felt’ sponsor of the World Series of Poker," GigaMedia said in its December announcement.

In 2008, GigaMedia also touted the sponsorship of the World Series of Poker by its Everest Poker product.

"In its first year of sponsorship by Everest Poker, the 2008 World Series of Poker is the largest and richest in history with over 58,000 participants playing for a prize pool of over $180 million. Players from 118 different countries have participated, up significantly from 87 different countries last year,"’ GigaMedia said in a July 2008 press release.

"Broadcasts of the 2008 WSOP begin this week on ESPN and will ultimately reach in excess of 300 million households globally."