Q&A: Partygaming share offer

Plenty of investors are betting on Partygaming's debut

Why has there been so much interest in Partygaming's share offer?

Investors have been clamouring to buy into the company.

The initial public offering was oversubscribed by more than 150%. Even at the price set by the company - 116p, at the lower end of expectations - the float is still the biggest to hit the City since technology company Dimension Data floated in 2000.

Conditional or pre-market trading began on Monday, three days ahead of the official launch of full trading on Thursday, 30 June, and the shares rose 11% to 129p by Monday's close.

The company will raise around �1bn through its share offer for 20.6% of the business.

Is it big news for the stock market?

The firm's offer price values it at �4.64bn - more than British Airways, Dixons and ITV.

It will be immediately eligible to join the FTSE 100 index.

Other online gaming firms have also been in the spotlight, with Empire Online - which markets mainly gambling websites - raising �123m at its steady debut earlier in June.

Other online players, such as 888.com, are waiting on the sidelines.

Elsewhere, betting group William Hill has been snapping up shops from its rival Stanley Racing, while the casino industry has been undergoing something of a renaissance recently with the government unveiling a shake-up of gambling laws that could see a Las Vegas style "super-casino" built in the UK.

Is online gambling a big deal?

Online betting has seen phenomenal growth since the first online casino opened in 1995.

Thousands of internet gaming sites have emerged worldwide, from the Caribbean to Gibraltar - where Partygaming is based.

According to research group Forrester, 76% of the UK's 29 million adult internet users admit to regularly placing a bet either online or offline.

Reports suggest that over the six years from 2003 to 2009 the industry will have tripled in size, with Christian Capital Advisors suggesting revenues could soar to �9.5bn from �3.13bn during the same period.

Partygaming itself has fared well since its launch in 2003. It says it now has a 55% share of the online betting market and regularly attracts 70,000 simultaneous players at peak times.

The group posted a pre-tax profit of �371m last year.

During the first three months of this year revenues jumped 93% to $222m compared with the same period last year, while operating profits rose 81% to $128m.

As well as its flagship brand Partypoker, the group also owns Starluckcasino.com and Partybingo.com.

Who is behind the business?

Four people own the company: Ruth Parasol, her husband James Russell Deleon, Anurag Dikshit and Vikrant Bhargava.

Reports suggest that Mr Dikshit - an Indian computer programmer who owns 32% of the business - could be worth as much as �1bn after the float.

Much of the interest has been focused on Ms Parasol.

A qualified lawyer, she made her name as an entrepreneur in the online porn industry after going into business running sex chatlines with her father.

She and her husband each hold 16% of the business.

In comparison, one of the most high-profile flotations of the dot-com era - that of Lastminute.com in 2000 - raised a mere �51m for its co-founder, Martha Lane Fox.

Any problems on the horizon?

There have been jitters among investors ahead of Partygaming's debut over possible legal problems in the US, where 80% of its customers are based.

While the firm insists it does not contravene any laws, there have been suggestions its owners could face prosecution and jail for breaking US laws.

The US Department of Justice says online betting is prohibited in the US by legislation designed to cover cross-border and inter-state telephone gambling.

However, a Partygaming spokesman told BBC News that previous cases in the US "clearly showed" any legal action needed to be linked to sports betting - a service not offered by Partygaming.

Some internet betting firms have been successfully prosecuted in America and some states have taken action against internet gambling - but, significantly, all such cases have been against US citizens with operations based overseas.

Meanwhile, the World Trade Organisation (WTO) has also ruled that US laws prohibiting cross-border gaming broke trade rules.

So far, there are no US laws that explicitly ban online gambling and efforts to bring in such legislation have stumbled in Congress since 1990.

However, Arizona's Republican Senator Jon Kyl is expected to have another stab at introducing a new anti-gambling bill soon.

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