Gambling News
“The Poker Face”
Keep an eye on PartyGaming, an online poker site. They are going
from a Full House to a Royal Flush!
Online gambling is still illegal in the U.S. Lawmakers there are arguing
that the U.S. federal Wire Act of 1961, which prohibits the use of phone
lines for the purpose of gambling, applies to online gambling as well,
thereby making Internet gambling an illegal activity. While arguments
rage, investors are nervous about a company called PartyGaming, which
has its largest market in the U.S. being suddenly closed down.
PartyGaming, owners and operators of the highly successful Party Poker
website, is considering flotation in London. According to industry insiders,
PartyGaming made about $350 million in profits last year and projected
profit for this year are between $5 million and $6 million dollars. This
means that PartyGaming could actually be worth $6 billion dollars, which
would qualify it for listing on the FSTE index.
Two of the owners and founders are Vikrant Bhargava, a 32-year-old electrical
engineer, born and educated in India. Vikrant owns 15% of PartyGamingn
and will become a wealthy man on this floatation. The other owner and
cofounder of PartyGaming is Amurag Dikshit. He will become even richer
because of his 40% stake in PartyGaming.
But potential investors in the floatation are nervous on some points.
One of these is that online gambling sites may unintentionally be used
for money laundering purposes. Bhargava counters this fear by pointing
out that PartyGaming uses a rigorous checking system, but says that the
checks probably aren’t even necessary since trying to launder money
through Internet gambling is highly impractical and, therefore, most unlikely
to occur. Finally, Bhargava reassures potential investors by saying that
PartyGaming uses only the most reputable international banking institutions.
All of these factors should help mitigate the fears of potential investors.
PartyGaming has an aggressive marketing strategy and strives to project
a credible image. This is another encouraging sign for investors. Credibility
is very important to PartyGaming. This is because Ruth Parasol, one of
its co-founders and major shareholder and who now owns 20% of PartyGaming,
made her first fortune in Internet pornography. PartyGaming stresses that
she no longer has any connections with the pornography industry.
PartyGaming has a brilliant future, whether it is listed on the FTSE
or not. Their next targeted market is China where there is a huge pool
of enthusiastic gamblers just waiting to be tapped. PartyGaming makes
its money by taking a small percentage from the pot. According to Bhargava
there are already about 70,000 people playing every day at peak hours.
This adds up to a large pot. If PartyGaming captures a large chunk of
the Chinese internet gambling market, their future looks bright indeed.
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