Wynn Resorts Ltd. (WYNN) plans to run its online gaming business in New Jersey from the property of competitor Caesars Entertainment Corp. (CZR), according to a person with knowledge of the situation.

Wynn, which doesn’t own a casino in the state, will use computers at a Caesars hotel in Atlantic City, said the person, who sought anonymity because the arrangement hasn’t been announced. The person didn’t provide other terms. Both companies are working with 888 Holdings Plc (888), one of Europe’s largest online gambling operators.

The accord gives Wynn a physical presence in a New Jersey casino for its computer hardware -- a requirement set by the state to help its struggling casino industry. Local gambling rules can force competitors to cooperate to gain a slice of what researcher H2 Gaming Capital estimates could be a $7.4 billion market in the U.S.

“As the online business rolls out on a state-by-state basis, everyone will need to partner with someone,” Itai Frieberger, chief operating officer of 888 Holdings, said in a telephone interview. “You’ll find very strong partnerships in some cases with competitors in order to get a license.”

Frieberger declined to say where Wynn’s computers would be located.

Michael Weaver, a Wynn spokesman, declined to comment. The arrangement between Caesars and 888 Holdings isn’t exclusive, said Seth Palansky, a spokesman for Caesars, which owns the World Series of Poker brand.
Boston Competition

Wynn and Caesars, both based in Las Vegas, are competing for the sole casino license to be awarded in the Boston area next year. They are also rivals in Las Vegas, where Wynn’s namesake casino and Caesars Palace target high rollers.

While New Jersey requires that the computer hardware used to run online gaming in the state be located in an Atlantic City casino, property owners are free to house equipment from many providers, according to David Rebuck, director of New Jersey’s Division of Gaming Enforcement.

“On one side of the room ABC company can have its server, next to it can be a server from another company,” Rebuck said in an interview yesterday at the Global Gaming Expo in Las Vegas.

Gibraltar-based 888 Holdings is working with Wynn through All American Poker Network, a joint venture with Avenue Capital Group, a $12.2 billion New York-based investment firm that is also an investor in Trump Entertainment. 888 Holdings announced their arrangement in a statement yesterday. 888 Holdings reported its agreement with Caesars earlier.

888’s Role
888 Holdings provides the software, games and customer billing to casino operators looking to operate online, Frieberger said, while companies such as Wynn and Caesars make the marketing decisions and investments. 888 Holdings is also providing online operations for the Treasure Island casino in Las Vegas and the Delaware Lottery.
“We could have 10 different brands operating in the U.S. by the end of the year,” Frieberger said.

Wynn gained 0.7 percent to $156.12 at the close in New York. The stock has advanced 39 percent this year. Caesars added 0.4 percent to $22.63 and 888 Holdings rose 1.3 percent to 166.3 pence in London.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net