"The Poker Face"

Vikrant Bhargava, a 32-year-old electrical engineer, born and educated in India, owns 15% of PartyGaming, an online Poker site, and is about to become very wealthy because of it. His friend and founder of PartyGaming, Amurag Dikshit, is about to become even richer because of his 40% stake in PartyGaming. PartyGaming, the owner of the highly successful Party Poker website, is considering floatation in London. According to industry insiders, PartyGaming made about $350 million in profits last year and projected profit for this year are between $5 million and $6 million dollars. This means that PartyGaming could actually be worth $6 billion dollars, which would qualify it for listing on the FSTE index.

One large hurdle remains, however, and it makes potential investors a bit wary about investing in the company. That hurdle comes from the U.S. where online gambling is illegal. Lawmakers in the U.S. have argued that the U.S. federal Wire Act of 1961, which prohibits the use of phone lines for gambling purposed, applies to online gambling as well, thereby making Internet gambling an illegal activity. Understandably then, potential investors are nervous about PartyGaming suddenly being closed down in the U.S., where PartyGaming has its largest market.

Another worry for potential investors, is that online gambling sites may unintentionally be used for money laundering purposes. To counter this fear, Bhargava points out that PartyGaming employs an extremely rigorous checking system. Bhargava further points out that the checks probably aren’t even necessary since trying to launder money through Internet gambling is highly impractical and, therefore, highly unlikely to occur. Finally, Bhargava points out that PartyGaming uses only the most reputable international banking institutions. All of these factors should help mitigate these fears.

Still another encouraging sign for investors is PartyGaming’s aggressive marketing strategy and the emphasis it places on projecting a credible image. Credibility is particularly important to PartyGaming because of the history of one of its co-founders and major shareholder. Ruth Parasol, who owns 20% of PartyGaming, made her first fortune in Internet pornography and PartyGaming wants to stress that she no longer has any connections with the pornography industry whatsoever.

Even without being listed on the FTSE, PartyGaming has a brilliant future. Their next targeted market is China where there is a ready pool of enthusiastic gamblers just waiting to be tapped. PartyGaming makes its money by taking a small amount from the pot. According to Bhargava there are already about 70,000 people that play simultaneously at peak hours and that adds up to a lot of money from the pot. If PartyGaming can capture the lion’s share of the Chinese market, their future looks bright indeed.