Party Gaming has dominated headlines in the online gaming industry this week following the firm’s announcement that it intends to purchase a sports betting firm. According to British daily, The Guardian, the world’s largest poker site intends to spend GBP 500 million to acquire its own sports book.

While secrecy surrounds the new purchase, insiders have revealed that the sports betting firm is European-based. Rumors have linked Gamebookers, a European firm with over 145,000 customers in 150 countries, as a possible acquisition target. Talks between the two firms are said to be in the final stages with a final announcement predicted in the coming weeks. 

News of the coming purchase has been welcomed by investors and shareholders, who have reacted positively toward new chief executive, Mitch Garber’s commitment to "de-risk" by focusing on diversification. In an attempt to appease legislators, Party Gaming has announced that it will not accept wagers on sporting events from U.S. players. The firm has also paid a reported 20 million pounds to become the major sponsor of the 2006 World Series of Poker tournament in Las Vegas next month.
The firm’s shares have had an unsteady run recently amidst fears that the U.S. government is preparing to take steps to outlaw online casino gambling. Despite its entry into new markets in the last two years, Party Gaming still relies heavily on U.S. casino players for approximately 80 percent of its revenue.

Sports betting is widely viewed by the company as complimenting its traditional poker business. The firm has been highly successful in marketing blackjack to its poker fanbase and has recently launched its new backgammon site. Its efforts in cross-selling and diversification have set leading trends in the industry, with major rivals such as 888 and Empire Online quick to follow suite. 888 Holdings, operator of the Pacific Poker site, has also announced its intentions to enter the world of sports betting.

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