PartyGaming to announce a £5.8bn IPO

Online gaming firms PartyGaming and EmpireOnline have both announced that they plan to float substantial IPO’s.

PartyGaming, which owns the PartyPoker website, is planning to announce a £5.8bn IPO. If this plan does materialise, it would be the largest ever float on the London Stock Exchange. Online lawyer Ruth Parasol, her husband, Anurag Dikshit and Vikrant Bhargava, founded PartyGaming in 1997.

This planned IPO will put PartyGaming ahead of Boots, Sainsbury’s and British Airways on market capitalization. It is set to make £1.1bn in cash for the company’s founders. PartyGaming has kept aside £320 million of shares for its staff. The firm said that its 1,100 workers, including those working in the Indian call centers would be entitled to have shares of this launch.

PartyGaming chief executive Richard Segal, said, “PartyGaming is a highly profitable and cash-generative business. Our focus will be to deliver attractive returns for our shareholders through a combination of the growth of the business and through the payment of dividends.”

But analysts say that that around 85 percent of PartyGaming’s revenues come from the US where online gambling is still skirting the fence. Segal however, dismissed these speculations.

Meanwhile, the other online gambling firm, EmpireOnline was non-committal about the exact amount it hoped to raise. Unlike PartyGaming, it is going to sell its shares on the Alternative Investment Market. The site provides marketing services and helps push traffic to online gambling sites. Noam Lanir, an Israeli businessman, is the majority shareholder in the company, while, Leonard Steinberg, founder and non-executive chairman of UK casino operator Stanley Leisure, is the company’s non-executive chairman.

Online gambling has steadily gained popularity over the years, Adrian Scarfe, clinical practice manager at gambling addiction counseling and advice service Gamcare, says, “The internet has its own addictive qualities. Combine that with the thrill of playing cards and large sums of money and you have an extremely complex but dangerous environment. In the last three years we have seen a change. Internet gambling has risen steadily and in my view it will continue to rise.” And due to strict US regulations, London has become the focus of this online gambling boom, “London is one of the key financial centers and also through the passing of the UK Gambling Bill it is a jurisdiction that warmly embraces gaming and online gaming,” Segal pointed out.