Back in March, reports were surfacing that sports betting giants PartyGaming and Bwin were thinking of merging. Well, it’s finally happening as PartyGaming plans to acquire Bwin in a reverse takeover valued at around 1.13 billion pounds ($1.76 billion). It will become the world’s largest publicly traded online gambling company.
The merged company will be 51.6 % owned by Vienna-based Bwin. The rest will be owned by Gibraltar-based PartyGaming. The two reported combined net gaming sales of 682 million Euros last year. The new company will be listed in London and offer online poker, sports betting, an online casino and other games such as bingo.
Both companies are looking to combat a competitive market. In Europe, Bwin and PartyGaming are losing in poker revenue to PokerStars and FullTilt. In the United States, they are looking to expand as the government begins to allow online gambling companies outside American borders to offer services in domestic markets and put illegal acts under taxation and regulation.
Since the announcement, PartyGaming shares went up 20%, the biggest recent rise since December of 2008. The merger creates an online gambling entity worth around $3.3 billion. They will be in prime position to profit from any deregulation in the U.S. market. PartyGaming settled its debt with the U.S. Department of Justice before dealing with Bwin. So, with no legal liabilities, the company will be in a strong candidate for the first issue of gambling licenses in the U.S., if it comes to that.
PartyGaming CEO Jim Ryan said that he forsees U.S. regulated online gaming for two new reasons. Harrah’s recent entrance into the online gambling world is leading to its competitors searching for appropriate online gaming operators to tie up with. And, GTech is buying online gaming assets and dealing more with state run lotteries.