Online Poker Stakes Raised in Merger between PartyGaming and Bwin

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Big news for online poker was delivered on Thursday July 29th to the London Stock Exchange (LSE). The online gaming giants – PartyGaming and Bwin Interactive Entertainment just announced the two will merge to form the world’s largest listed eGaming company. Bwin will emerge with the largest share holding of 51.64% of the newly merged alliance, while PartyGaming will hold the remaining 48.36%. The newly formed company will be listed on the LSE and remain based in Gibraltar.

Currently, Bwin is the largest publicly listed eGaming company with a market cap of approximately CAD 1.9 billion (€1.4 bn), with PartyGaming coming in close second with a market cap of CAD 1.79 billion (£1.1 bn). The unified organization will record 2009 net gaming revenues of CAD 927.3m (€682m) and earnings before interest, tax, depreciation and amortisation of CAD 266.4m (€196m). Following the announcement, both companies experienced a sharp rise in share prices as PartyGaming shares rose by 30% while Bwin shares went up by 12%. The deal isn’t finalized just yet; shareholders of both companies still have to approve the acquisition.

If it does fly, what does it mean for poker players and the online poker market?

Most importantly, based on the stability of both companies and their presence in the online gaming industry, it appears that none should worry. In addition, the stock markets approve the deal and that is paving the way for smoother investing and large scale marketing. Many believe that PartyGaming’s software is superior to Ongame’s (owned by Bwin) and because of this, many in the industry are calling for PartyGaming to hold what they’ve got, and not transition to Ongame’s format. Some admit that integrating to the Ongame software could be the difference between success and failure within the merger.

If the two networks decided to combine player liquidity, players could find larger tournaments and more attractive poker action. Although Party Poker is currently the 3rd largest global poker network, with Poker Stars and Full Tilt ahead of them, combining the 5th place Ongame network into the pool would definitely give both networks the much desired liquidity growth they seek.

With the final decision unknown, the atmosphere remains hopeful that the right decision will be made for the organization and ultimately the players. Some believe the new merger could spell hard times for the smaller guys in online gaming, while others hold to the notion of the new merger eventually collapsing under the pressure of internal negotiations gone wrong. Altogether the general consensus in the poker community seems to be positive, however some question exactly how the cards will fall in the end. Nevertheless, share prices have already begun to rise and all bets are fully waged towards current positive trends continuing along the same path.

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