The IPO craze is catching on- 2005-08-12

Is Gambling legal or not? Well as long as the online casinos companies keep on generating interest and attracting players, investors will more likely be concerned with ROI and debt/revenue ratio than the legality of it all. While poker tournaments swarm the airwaves of major American cable channels and celebrities keep on professing their love for Vegas, the IPO buzz becomes louder and louder.

On June 27th of this year, PartyGaming emitted its initial public offering in London. The initial share value was set at 116£. Trading immediately began about 10% higher than that, around 125£. At the close of the first day, shares were trading at 129£. After one month, the stock was trading at 176£, an increase of over 50% from its original opening price. Overall, PartyGaming capitalized a staggering $8.48 billion, positioning it as one of the 100 largest companies on the LSE.

According to tracking firm PokerPulse.com, every day, 1.8 million players—more than 70% from the United States—throw their chips into the virtual pots of the Internet. Research firm Christiansen Capital Advisors says online-poker revenues have grown from $82.7 million in 2001 to $2.4 billion today—and projects the amount to double once again by 2005. This means that the other companies will undoubtedly be contemplating the prospect of a great market capitalization to ride the wave.

Lately there has been a quiet but constant whisper that Cassava Enterprises, parent of Pacific Poker and the giant Casino on Net, is looking into its prospects, with the Financial Times reporting a Cassava float in the second half of 2005 for $1.6 billion. On the other hand, Jackpot city, which runs ‘Instant win’ games has confirmed through Michael Mee, Finance Director at the mother company Gamesys, that actions are being taken to set up a possible 100 million GB£ float on the LSE.

Rumors about other possibile IPOs on the London Stock exchange are mounting: Pokerstars, the #2 online poker card room and PokerRoom parent’s OnGame.

What does this mean for players? it obviously could swing both ways, but ultimately what the industry needs is more accountability to ensure security and polish a somewhat ever-weary image to the larger public.

Links:
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