Gambling News - June 2005 Edition

"Jackpot for Indians, Courtesy Gambling Site"

Is PartyPoker based on a business model which makes nothing, sells nothing, and profits purely from avarice?

PartyGaming makes its money by charging its customers a commission to play against another player or in tournaments. The company announced its flotation on the Financial Times Stock Exchange (FTSE) in London, and is expected to go straight into the FTSE index where other traditional and prestigious British institutions such as Barclays and Marks and Spencer appear.

One newspaper journalist, commenting on the newly listed PartyGaming Company, which runs the poker website, PartyPoker.com, said “it is based around a revolutionary business model which makes nothing, sells nothing, and profits purely from avarice.”

Good news for the PartyGaming workers was announced at the same time that PartyGaming announced the five billion pound London Stock Exchange flotation.

The PartyGaming call center is located in India and the staff members, who number 1,100, are located mostly in Hyderabad, India. Staff members are also located at the head office in Gibraltar, Spain where the company headquarters are based.

PartyGaming’s employees will benefit directly from the flotation. The company, which employs about one thousand workers at the call center, will provide those employees a windfall of about 300,000 pounds in share options.

PartyGaming is owned by Anurag Dikshit and Vikrant Bhargava, two young graduates of the Indian Institute of Technology (ITT), and an American husband-and-wife team own. Bhargava, who owns almost 15 percent of the company, pointed out that when he and Dikshit finished their university studies at ITT, one of the top universities in India, many fellow graduates headed off to the United States, hoping to make it rich in the dot com business. “Many people wanted to do something big, but I don’t think we ever thought it would be this big. The motivation was not only money. We have done well at something we enjoy doing.”

PartyGaming’s incredible success is largely due to the shrewd business sense of its owners, say Industry analysts. They are taking advantage of poker’s increasing popularity and after a huge advertising blitz was launched at London’s underground train stations, PartyGaming experienced a meteoric rise in business. Players log in from all around the world, but the majority of visitors are U.S. citizens, where the poker website, PartyPoker, is very popular. The PartyPoker website averages about 70,000 customers playing online against each other at any one time. Estimates put the number of online gamblers in Britain at 4.3 million and they predict that the number will continue to climb. Internet poker attracts about four million pounds a day in bets.

To say the company has done well is a huge understatement and a look at the phenomenal company earnings shows its unprecedented growth. In 2002, PartyGaming’s poker website earned five million pounds. By 2003, that amount had grown to 68 and by 2003 it had grown to 304 million pounds. Now, in 2005, company earnings have hit 115 million pounds in the first quarter.

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