Gambling News - July 2005 Edition

"PartyGaming Gambles on Float by End June"

Flurry of activity on the London Stock Exchange as online gambling companies rush floatations.

Following closely on the announcement by Empire Online that it plans to float on the London Stock Exchange, came the announcement by PartyGaming of its own plans to float on the London Stock Exchange. Another online gambling company, 888Casino.com has also announced plans to list on the LSE later this year. 888Casino.com has announced that it has contracted with Credit Suisse First Boston to prepare the float. The expected value of this flotation is set at 1.6 billion dollars. Empire Online is expected to float at one billion dollars.

The largest flotation, by far, will be PartyGaming. PartyGaming, which operates the Party Poker website, is the world’s largest online poker company. Financial analysts for the company estimate the listing could value PartyGaming at about ten billion dollars (equivalent to 5.5 billion British pounds). This value would qualify PartyGaming stock for inclusion in blue-chip indexes compiled by the FTSE and MSCI. The only other company to raise such a sum in London since 2001, was Friends Provident which raised the same amount in July of that year.

All this activity on the London Stock Exchange is proof of London’s central position as the listing center for the online gambling industry. It is also conclusive evidence of the rapid and continued expansion of the online poker, and online gambling industries.

The anti-gambling laws in the United States and its anti online gambling policies have further boosted London’s position as the center for the online gambling industry. In addition, advances in broadband technology continue to bolster the growing popularity of the online gaming industry itself. All this, combined with the renewed popularity of poker and the ease and convenience that is offered by the online gambling sites, especially to new players, all serve to fuel the industry’s growth.

PartyGaming has enlisted the brokerage firm of Dresdner Kleinwort Wasserstein to be the coordinator and sole book runner for its listing. Dresdner also handled Sportingbet.com’s expansion into online poker when Sportingbet took over the Paradise Poker site. The deal with PartyGaming will boost Dresdner’s image as a leading advisor to the online gaming industry.

If the report issued by Edison Investment Research and Durlacher is any indication, PartyGaming and the other companies associated with the online gambling industry have reason to be optimistic. The report, issued earlier this year, estimates that online gambling revenue, which is actually the amount of money lost by gamblers, passed the eight billion dollar mark in 2005, up 37 percent from the previous year.

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