PartyGaming Shares Jump After Merger with Bwin

August 2 - PartyGaming, the online group that incorporates top brands such as Party Casino, Party Poker and Party Bingo, has announced a merger with its Austrian rival, Bwin.

The two groups will create the biggest listed online gaming business in the world and the share deal is considered to be worth €2 billion.

Under the terms of the deal, Party Gaming will own 48.36% of the group, while Bwin will be majority shareholder by owning the rest.

The merger is seen as the next logical step in PartyGaming's entry into the United States gaming market, which it was forced to leave when legislation changes in that country took place in 2006.

The merger was announced on the same day that a special US senate committee voted through politician Barney Frank's online gambling bill.

The vote on Frank's bill now has to be put to the House of Representatives and it may soon pave the way for changes in the US law books to repeal the current UIGEA.

Speaking about the current changes in the United States and the advancement of Barney Frank's bill, one analyst said: "At this stage, it is probably the most positive step towards the reopening of the US online gaming market since 2006. The US market was 50% of the global online gaming market prior to it being 'closed' and is still 25%."

"PartyGaming was set to make $750 million of profit in 2006, prior to withdrawing from the US and is set to make only $140 million this year," he explained.

There is no doubt that the giant merger between the two groups, as well as the changes in the US legislation, should have a ripple effect in the industry that should reach all markets, including South Africa.

Tell A Friend