PartyGaming Purchase of the World Poker Tour

PartyGaming purchased the World Poker Tour for $12.3 million dollars. PartyGaming, the online casino group best known for being one of the first to bring poker rooms to the Internet. The company had lost value as the main market for PartyGaming was the US market and saw a big drop in value when the UIGEA was passed, making online gambling difficult for most American residents. The purchase fuelled the speculation that PartyGaming has seen a rise in its profits this year.

PartyGaming has been made famous for PartyPoker rooms. The company began in 1997 and became the world’s largest online poker brand before the implementation of legislation in the USA. The legislation change in 2006 had a dramatic effect on the company and it lost an estimated 60% off its share value in the 24 hours after the law change. The company was then fined a penalty of $105 million dollars for various breaches of the law. Considering PartyGaming and PartyPoker and given their reputation as the best online poker, it is not surprising that they went ahead with this purchase of the World Poker Tour.

The WPT (World Poker Tour) is a number of tournaments that are held in a series and feature games with the world’s best poker players. The games feature players competing in Texas hold’em games throughout the USA and in other locations around the globe. The games are televised and the WPT has been attributed to the rise in popularity of poker in recent years. The WPT first started in 2002 and with the purchase by PartyGaming, are expected to continue well into the future.

The purchase will mean the re-entry of PartyGaming into the US marketplace will be easier as and when, and will have a huge reflection on the value of the company as a whole. The bidding on the WPT was intense with PartyGaming up against Mandalay Media and it seemed that they were going to lose when Mandalay bid $36 million dollars for the WPT deal. The offer was rejected in favour of the sale to PartyGaming. The agreement is that there will be an initial fee of $12.3 million dollars and then a minimum of $3 million dollars revenue sharing for the upcoming three years. PartyGaming CEO Jim Ryan commented that the deal combines “two of the biggest brands in online and offline poker”.

Already the stock market is seeing ripples from the purchase as the price of PartyGaming shares started to creep up. The company once held a place on the FTSE100 but they were dropped when the US legislation in online gaming came into play, although they are still on the FTSE250 index.

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