Station Casinos plans to buy half of an Internet casino operation recently launched by Sun International Hotels.
The Web casino was recently licensed on the Isle of Man, a small, semi-independent island off the coast of England.
"Sun approached us," Glenn Christenson, Station Casinos' chief financial officer, told the Las Vegas Review-Journal. "They were looking to find a quality partner. They had already invested $10 million in their site, and they told us we could buy a half-interest for $5 million."
Sun operates the biggest casino in the Bahamas, the Atlantis megaresort on Paradise Island.
Sun President Butch Kerzner didn't return Friday phone messages.
The deal should benefit both companies, said online gambling expert Sue Schneider, president of the River City Group.
Sun, owned by South African Sol Kerzner, won one of three Internet casino licenses granted last September by the Isle of Man, a 220-square-mile island in the Irish Sea.
In December, Sun launched its Isle of Man-regulated Web site.
Station Casinos, owner of 10 casinos in the Las Vegas valley, has valuable marketing and technological expertise and a strong interest in gaining a foothold on the Internet, Schneider said.
"Both companies bring some things to the table," Schneider said. "Station has been working on the technology, and, of course, Sun has the license in the Isle of Man."
Station Casinos would have to be licensed by the island's government before the deal could take effect, Christenson said. The company expects a license by the end of September.
The Sun management team already running the site would continue to operate it, Christenson said. Each company would place three executives on the joint venture's board of directors.
"We're not doing this as a way to strengthen our brand," he said. "We're going to use our marketing capabilities and our slot machine expertise, and we're positioning ourselves to be the first mover if Internet gambling is legalized in Nevada or elsewhere in the U.S."
Isle of Man rules prohibit Sun's site from taking bets from gamblers in the United States, which means the joint venture would have to target international bettors.
"We're not abandoning our Las Vegas focus," Christenson said. "This is an aspect of the industry with the potential for growth, an area we've been interested in for some time."
Christenson said the company's goal is to make sure the Isle of Man operation doesn't violate Nevada gambling rules and jeopardize the licenses of the company's Las Vegas casinos.
MGM Mirage, the Las Vegas Strip's largest hotel-casino operator, already holds an Isle of Man license.
Christenson admitted that contributed to his company's decision to partner with Sun.
"It's important that the Isle of Man chose high-quality companies for its licenses," he said. "Their participation was a positive."