PartyGaming to float

[MattyNeth]

Internet gaming site banks on flotation Survey shows 4 million Britons use the web for betting Nils Pratley Friday January 28, 2005 The Guardian The world's biggest online poker company yesterday said it may float on the London stock exchange as new figures suggested that 80% of Europe's internet gamblers are British, and roughly a third of those are women. The possible flotation would provide an insight into the fortunes being made by internet gambling companies, mostly from offshore tax havens. City analysts have already put a rough value of £3bn on PartyGaming, owner of the Party Poker website. That would mean the Gibraltar-based operation is worth more than many established companies, such as British Airways, ICI and EMI. PartyGaming's announcement that it had appointed two investment banks as advisers, a common prelude to flotation, coincided with a survey claiming that almost 4 million people in Britain use the internet for betting. The YouGov research, for uswitch.com, suggested that 30%-40% of British players are female and that 14% are aged 18-29. That supports anecdotal evidence that women and students are among the most enthusiastic recruits to poker, the fastest-growing area of online gambling. Party Poker itself accounts for more than half the worldwide poker market. It claims that 65,000 people, mostly Americans, play simultaneously on its site at peak hours. The group yesterday declined to give details of its financial performance, but it is understood to have made operating profits of about $350m (£185m) last year. Bankers suggest it is targeting $500m-$600m for this year. Poker websites make their money by collecting a "rake" from each pot, usually 1%-3% of the cash in that pot. The research group River City calculated last month that such revenues from the world's 200-plus poker websites now approach $2bn a year. It believes some 1.5 million people play poker online regularly for real money and that the number is growing by 100,000 a month. Nigel Payne, the chief executive of Sportingbet, which last year paid $297m for the rival website Paradise Poker and saw its own share price double, said the estimates of Party Poker's profits seemed accurate. "The industry is enormous. The profits of the industry are enormous and over the next few years people are going to realise just how big it is," he said. Paradise Poker's sale made £150m for its creators, three Canadian computer engineers who insisted on anonymity, and more may follow, depending on the site's future performance. A flotation by PartyGaming would dwarf those sums. The company is owned by a handful of individuals, including Ruth Parasol, an American lawyer who made her first fortune in pornographic websites before establishing Party Poker in 1997. The company is targeting London for a stock market listing because the legality of online gambling in the US is unclear. The US forbids gambling across state lines and so all the big online sites base themselves in territories such as Belize, Costa Rica, Gibraltar and the Dutch Antilles. Sportingbet is hoping that PartyGaming's transformation into a public company would trigger better regulation. "We are concerned about children, excessive betting and addiction. It is too big for it not to be regulated, but it has got to be regulated properly," Mr Payne said. The government's gambling bill proposes licensing online gambling sites, but has had a largely hostile reaction from operators. They complain the draft legislation is too concerned with the definition of terms such as "computer equipment" and does not understand their businesses.

[Jezza]

Re: PartyGaming to float The yanks are completely useless when it comes to online gambling, infact the current administration is bent on trying to ban it over there (it seems people do it through loop holes in the law from the sites being off shore). At least over here we are well regulated and everything is smooth regarding the law. It does not surprise me that Party Poker are worth this much money, online poker has EXPLODED in the past 3 years. Jez