Shares of online casino PartyGaming, went up 11% after the company’s initial public offering. The company was worth about $8.5 billion, but is now estimated to be worth about $9.1 billion.
“The listing will reinforce the group’s position as one of the world’s leading online gaming companies and enhance the group’s profile as we seek to expand internationally,” PartyGaming CEO Richard Segal.
The stock gained as much as 13 pence to 129 pence in the first day of trading after being priced at 116 pence a share to raise at least 907 million pounds for the company’s owners. The stock, which was offered in a range of 111 pence to 127 pence, was trading at 124.5 pence at 11:13 a.m. local time.
Investors are expecting that growth in online gambling will outweigh any potential regulatory concerns. PartyGaming, the operator of the PartyPoker Web site, makes 87 percent of its revenue in the U.S., where the Justice Department considers the business illegal. Revenue almost quadrupled last year, and the PartyPoker site has gained active players every quarter since 2001.
“This is a franchise seeing fast growth and we would expect Internet gaming to continue to grow quite rapidly over the next few years,” said Hugh Sergeant with SG Asset Management. “This is offset by the regulatory risk, where you have to have your eyes wide open.”
The company was created back in 1997. It controls over half of the world’s online poker market with its three brands: PartyPoker, StarluckCasino and PartyBingo. The online gambling market for the whole world is estimated to be between $7 billion and $12 billion per year.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
