PartyGaming IPO cashes big

PartyPoker’s IPO cashed big (see "Online Gambling Shares Climb 11% in Debut Day – New York Times", June 28th).  How big?  The IPO gave it a market cap of $9 billion US.  That’s US$800mil more than the market cap of Harrah’s, the casino gaming behemoth everyone talks about.

At this point, Party could actually consume one or more bricks and
mortar gaming companies, if it wanted.  In fact, this would be
problematic, as it needs to avoid US-based assets.  In reality it’s
probably going to create a stranglehold on the online market, expanding
into all forms of online gaming in Europe and Asia.

This is an excellent strategy, of course.  The gaming world is a lot bigger than Puritannical America, and Asian gaming consumers are far more plentiful than American ones, and without that pesky Department of Justice problem.

Party can still dominate American gaming by supplying a significant quantity of players.  In particular, the plentiful number of satellites they conduct to award entries into expensive buyin tournaments could begin their quest to control the audience of players.  There could come a time when your poker tournament won’t be top tier unless you’ve got PartyGaming running satellites for it, because you can’t attract enough players to plunk down the significant bucks for entry.

It’s the same way as being a recording artist, or a filmmaker.  You can make a great movie that everyone loves, but you won’t get it into wide distribution without the marketing dollars of the big studios and record companies.


  1. Joe Grossberg on July 4, 2005 at 11:54 am

    I don’t short stocks (or do anything with options, for that matter), but that would be pretty high on my list, if I did.

  2. Ticker: EOL (UK Stock) on July 20, 2005 at 6:54 pm

    Check out Empire Online. Traded in the UK only. Ticker is EOL. My hedge fund purchased this piece of crap that went public about 2 wks before PartyPoker. We lost over $400,000 before I would sell it. And I hated having to be at work at 12:30 AM PST to sell the stock when the UK market opened!