Poker site cuts IPO price

I'll see you at £1.27 a share

By John Oates • Get more from this author

Posted in IT Channel, 15th June 2005 09:50 GMT

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Online poker site PartyGaming is cutting the price of its Initial Public Offering because of concerns that its business may be stymied by US regulators.

The majority of PartyGaming's £600m annual turnover comes from US gamblers but the law there is unclear. European investors believe the company is priced too high considering this uncertainty.

Online gambling on sports is illegal in most states and some fear the puritans in Congress might try to ban all online gambling. The US makes up the lion's share of the market but this goes through companies based outwith the US.

The issue hit the headlines again in April when the World Trade Organisation ruled against the US's attempts to stop punters using offshore gambling sites.

Dresdner Kleinwort Wasserstein, which leads the float, talked to potential investors before lowering the price range to between £4.4bn and £5.1bn, giving a price between 111 and 127 pence per share, according to the FT. DKW originally suggested a valuation of £5.08bn.

Some investors were also concerned about the gambling firm's ambitious growth plans and its ability to maintain such high margins.

Worries about changes to US regulations means US banks are avoiding the flotation.®