Harrah’s denies claim of World Series of Poker agreement breach

By Steve Green (contact)

Monday, April 19, 2010 | 9:12 a.m.

Harrah's Entertainment Inc. is disputing allegations in a lawsuit that its World Series of Poker breached a $22.5 million sponsorship agreement with an online poker company.

Ultra Internet Media S.A. (UIM), a West Indies company that owns the Everest Poker Internet poker business, sued the World Series of Poker in federal court in Las Vegas on April 1. Everest Poker says it committed to a $22.5 million sponsorship deal in which its logo would appear on broadcasts of the tournament, with the logo appearing on the felt of the poker tables and on the inner rung of the WSOP feature table during the finals.

Everest Poker says the World Series of Poker breached this agreement when an ESPN affiliate in Europe, Luxembourg-based television network RTL9, broadcast in France the tournament and electronically replaced the Everest Poker image with the "virtual signage" image of competitor Full Tilt Poker's logo.

Everest Poker said in the lawsuit it paid $6.2 million for the 2008 tournament sponsorship and $7.9 million for the 2009 tournament, but has canceled the sponsorship and isn't paying the final $8.4 million for this year's tournament starting next month at Harrah's Rio hotel-casino in Las Vegas.

In court papers filed Friday responding to the lawsuit, attorneys for Harrah's denied the allegation that the World Series of Poker breached the sponsorship agreement.

Harrah's said in its response that UIM entered into the agreement primarily to gain exposure in the United States for its Everest Poker website, that the agreement does not require that the event be broadcast into any particular country and that France is not even mentioned in the agreement.

"Nobody from Harrah's made any representation during any of the negotiations or in the promotional agreement concerning any ESPN distribution or WSOP programming in France," Harrah's attorneys said in their filing.

"Indeed, at the time of the negotiations, UIM did not have an online gaming license recognized by French authorities. It was broadly observed that poker programming was not distributed by French television stations unless tournaments were sponsored by a French licensee," the filing said.

"In 2008 and 2008 the WSOP was broadcast by ESPN and parties with whom it has contracted in over 170 countries, including the United States, collectively to over 250 million households, for over 6,000 hours. Thus, UIM has certainly gained all the exposure for the everestpoker.net website that it could have hoped for, and more," Harrah's said in the filing.

Harrah's also said it lived up to its end of the deal by providing UIM and Everest Poker with the right to use the World Series of Poker trademark in advertising and promotions and "substantial hospitality consideration -- numerous hotel rooms and access to hospitality spaces and amenities and entry into the WSOP."

Harrah's said that after UIM and Everest Poker raised concerns about the French broadcasts in 2009, a "make-good" arrangement was agreed to in which ESPN would find a broadcaster for the WSOP in Spain and Italy at no extra cost to UIM and Everest Poker. Spain and Italy combined have about the same number of potential viewers as France, the filing said.

Also, Harrah's agreed Everest Poker would be described as the presenting sponsor of the WSOP during the broadcasts in certain European countries, but not France.

ESPN representatives told Harrah's and UIM last year that RTL9 was granted rights by ESPN to "comply with a unique provision of French law and that as a result, RTL9 was within its contractual rights to use digital advertising techniques which resulted in the logo placement of an alleged competitor to the everestpoker.net" website, Harrah's filing said.

"While UIM now complains that on several dozen additional RTL9 broadcasts of the WSOP into France, the name of its alleged competitor still appeared on the poker tables, that is entirely consistent with the discussions with ESPN and subsequent resolution for make-good exposure in early 2009," the Harrah's filing said.