Some analysts estimated prior to the IPO that the four principals in the company could cash in shares worth $1.4 billion, with stakes worth more than $6 billion at current valuations.
During its first day on the market, PartyGaming shares rose 11 percent and set off a flurry of speculation over whether U.S. gambling laws could possibly hinder the sustainability of one of the most wildly profitably online gambling companies in history.
While the company claims no holdings in the United States, the majority of its success has come from the U.S. gambling market through its flagship sites, PartyCasino.com and PartyPoker.com, the latter of which feeds a thriving demand for online poker that mostly originates in the United States
The online poker industry is expected to pull in revenue of around $6 billion yearly by 2009. That estimate is clearly reflected in PartyGaming’s own reported revenue, which surged from $9 million in 2002 to more than a half-billion by 2004.
Headquartered in Gibraltar, Spain, with servers in Canada, the company was founded in the early 1990s by Ruth Parasol, a lawyer and former business partners with her father, Richard Parasol, a San Francisco-based owner of massage parlors. Prior to founding PartyGaming, Parasol got her start in the industry through a phone sex partnership with Seth Warshavsky, an adult industry veteran who also owned the Internet Entertainment Group.
In 1997, Parasol launched a website called Starluck Casino based in the Caribbean that eventually gave way to a full-fledged online casino based on a proprietary program for casino games and a platform for players to compete against each other in large numbers over the Internet.
And while online gambling is not yet officially illegal in the U.S., company holders have cautiously danced around continued threats from lawmakers in certain states asking that it stop offerings its gambling services. One of the laws that U.S.-based attorney generals claim PartyGaming is breaking is the Interstate Wireline Act, a 1961 law that makes it illegal for anyone involved in the gambling business to use wire communication to transmit bets on "sporting events or contests." But so far, the Fifth U.S. Circuit Court of Appeals has upheld that the wire act does not prohibit Internet gambling on a game of chance.
No offering of PartyGaming shares will being made in the United States, although according to Reuters, PartyGaming priced its initial public offering at 116 pence ($2.12) per share, giving it a market value of 4.6 billion pounds and guaranteeing a place in the FTSE-100 index of blue-chip companies.
Shares of PartyGaming are expected to outpace those of mainstream companies such as British Airways and chemicals group ICI.
PartyGaming will trade under the ticker PRTY.L.
