London Internet poker craze sparks lively IPO

Jul 5, 2005 4:03 AM

In the U.S., the poker craze has been fueled by television presentations from both the World Series of Poker and the World Poker Tour.

In England, poker players have created their own boom with online poker gaming through such companies as PartyGaming Plc., a privately-held company that last week went public with a stock offering that shocked gaming analysts.

PartyGaming, with a 55% share of the online poker market, had been expected to go public with a share price that would value the company at about $5.5 billion pounds, or somewhere near $10 billion American. The offering price was listed at 116 pence a little over $30 a share but spirited trading on the London Stock exchange soon saw the price rise to 148 pence or better than $39 a share.

The company began offering Internet poker in 2001 and the site has attracted more than one million users since. For the individuals to play, they must pay a commission known as a rake.

The success has not eluded World Poker Tour officials who announced several weeks ago that they were establishing a real-money web site. That site was launched last week with the only fallout being that the company’s independent auditor, Deloitte and Touche LLP submitted its resignation saying online gambling created audit risks that would require an inordinate investment in time and resources, relative to the company’s size as a client.

WPT Enterprises Inc. (WPTE), a majority owned subsidiary of Lakes Entertainment Inc. (LACO), has developed world recognition through its syndicated television shows. To jump to the Internet gaming activity, the company partnered with WagerWorks to take advantage of the latter’s online gaming platform.

WPTonline.com will offer fully integrated poker room and casino sites, featuring all the games normally found in a regular casino. Also it will feature a variety of multiplayer poker games, multi-table series tournaments and a new graphic package to match the World Poker Tour television experience.

"WPT aims to be the People’s Choice for poker," said Steve Lipscomb, president and CEO of WPT Enterprises Inc. We want to give our WPT online.com players every opportunity to participate in the entire WPT experience, which is the way our online players will be afforded premier opportunities to enter WPT land-based tournaments as well as WPT invitational events," Lipscomb added.

WPT online gaming will not be offered to residents of the U.S. since the Justice Department has taken the legal position that Internet gaming violates U.S. law.