PartyGaming fuels IPO talk as names new chairman

"The world's biggest online poker company, PartyGaming, fuelled speculation it was nearing one of London's largest initial public offerings in five years by adding two high-profile executives to its board on Thursday."

"Chhabra estimated the market value of the overall company at around $10 billion, a figure backed up by other industry sources. That would make it the biggest London offering since Dimension Data (DDT.L: Quote, Profile, Research) floated for around 6 billion pounds ($11.3 billion) in July 2000. Further evidence that PartyGaming aims to float was seen in its announcement on Thursday that its revenue had quadrupled in 2004 to $602 million."

[Yahoo]

As a comparable, MGM's market cap is $9.7B. Online poker is one of the fastest growing industries in the world. As in all highly lucrative markets, one of the main risks in this deal is increased competition from the other online poker sites - 888.com, bodog.com, pokerstars.net, and the 500 other sites, etc - and US based casinos, which will lead to higher customer acquisitions costs and slimmer margins.