AS originally posted here
http://www.sbpost.ie/breakingnews/breaking...78&n=9464220&x=
Legality of online poker threatens flotation
05/06/2005 - 12:22:28 PM
The biggest flotation in London since 2001 could be derailed by fears over the legality of online poker in the United States, it was reported today.
PartyGaming, which owns and runs the biggest web-based poker brand, has unveiled plans for a listing that could value it at up to $10bn (€8.2bn).
But analysts at major US institutions said they would not automatically back the flotation because of concerns about the legality of internet gambling across the Atlantic, according to The Observer.
Fund managers are understood to need convincing that the US government will not harm the Gibraltar-based owner of the PartyPoker brand.
A failure to secure the backing of major institutions could force PartyGaming to lower its target price or possibly pull the float altogether, the report stated.
PartyGaming unveiled its flotation plans on Thursday - a move that would herald windfalls for its four owners and about 1,100 staff in the UK, Gibraltar and India.
Operations director Anurag Dikshit, husband-and-wife team Ruth Parasol and Russ DeLeon and Vikrant Bhargava, who own the group between them, could net about $2bn (€1.6bn) from the proposed sale of 23% of their shares.
PartyGaming will also give staff a 5.6% stake that would be worth a total of $560m (€458m)
Its PartyPoker.com online poker gaming room has attracted more than one million users since it was set up in 2001.
Customers pay a type of commission known as rake to play against each other on individual tables of up to 10 players or in tournaments.
Online poker generated about $553m (€452.3m) or 92% of PartyGaming's revenue in 2004, helping it to notch up annual pre-tax profits of $371.7 (€304m) against $89.2m (€73m) last time.
The group, formerly known as iGlobalMedia, also has gaming brands including Starluck Casino and PartyBingo.
It has more than 1,000 staff, including 126 people at its head office in Gibraltar, 57 marketing staff in the UK and 925 customer support and software development workers in India.
US laws consider all online gambling to be illegal which explains why web-based poker firms are based in the Caribbean and Gibraltar.
Fund managers are worried because PartyGaming said last week that 90% of its revenues come from the US.
However, a successful flotation could persuade other online gaming firms to come to the market such as Cassava which owns the poker site 888.com and is tipped to have a market value of around £800m (€654.3m).
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. How are they going to keep their employees? 
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