Online Casinos Consider IPOs

LONDON — As reported by the Financial Times: "With its red telephone boxes, British bobbies on the beat and quaint period charm, Gibraltar is the last place you would expect to find a fast-expanding Internet industry.

"…Two hundred years later the tax haven has become a hub for the international online gaming industry and home to such companies as 888.com, Party Gaming and the online casino operations of Ladbrokes & Coral, the British bookmakers.

"With 888.com and Party Gaming, two of the largest operators in the sector, eyeing initial public offerings on the London market, a spotlight has been shone on what is still a nascent industry.

"Sitting in his office in a building that also houses Ladbrokes & Coral, John Anderson, chief executive of 888.com, says 2005 could be the year online gaming grabs the attention of public investors.

"The company is 75% controlled by two pairs of brothers, including Israelis Avi and Aharon Shaked, and has appointed CSFB to prepare a flotation that could value the group at up to 1.6 billion pounds (US$3 billion).

"Party Gaming, meanwhile, has appointed Dresdner Kleinwort Wasserstein and Investec to run a strategic review that could also lead to an IPO.

"U.S. banks had shied away from the Party Gaming advisory role on concerns about the legality of online gaming in the U.S., where Party Gaming and 888.com have millions of customers. The appointment of CSFB by 888.com is therefore being seen as a milestone for the industry because of the bank's size and U.S. exposure.

"…Anderson says previous legal cases have established that online gaming is not illegal. 'There have been several attempts at bringing in bills in the U.S. [to kill online gaming] and they have all failed,' he said…"