Thursday 29th June 2006 PartyGaming plans £500m move into sports betting
It has been reported that online poker company PartyGaming, is on the brink of unveiling plans to expand into sports betting via a series of acquisitions to be funded with the proceeds of a bond issue, that could raise as much as £500m.
It is understood that the first purchase will be of a privately owned European operator, and will be relatively small in the context of the fund-raising. The size of the fund-raising is likely to surprise PartyGaming's investors but reflects the scale of a commitment by new chief executive, Mitchell Garber, and the group's controlling shareholders to 'derisk' by diversifying earnings.
The strategic sense of expansion into sports betting has also been demonstrated during the World Cup, as most online casino and poker operators admit a slight decrease in activity throughout June. However, sports betting would be seen as complementary to PartyGaming’s existing operations, a franchise that would seem to be recognising the need for brand diversification.
It is understood that the company has decided not to accept sports bets from the US in an effort to limit confrontations with the anti-online gambling lobby, a stance shared by established sports betting companies such as Ladbrokes. PartyGaming has also paid about £20m to gain wall-to-wall exposure for its brand during televised events.
Source: OnlineCasinoNews
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