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Wednesday, September 28, 2005

Casino poker stars

Mr Mummery, a former director of Betinternet, one of the first internet operators to move to the island, said that recent changes to the duty regime and the scrapping of corporation tax from April next year had “created a lot of interest”.

Another key factor for PokerStars was the removal in January of rules barring companies from accepting casino and poker bets from America, where internet gambling is a grey area legally.

Mr Mummery said he could not comment on suggestions that PokerStars might be considering an initial public offering (IPO). But he said that moving to a jurisdiction with strong financial and risk controls would “help companies get backing from the City and other sources of funding”.

Alun Bowden, the editor of eGaming Review, said: “There are a lot of reasons for moving to the Isle of Man, which provides PokerStars with a base for European expansion. But it would also suggest to me that an IPO was probably on the cards.”

The flotation of PartyGaming, the world’s biggest internet poker company, in London at the end of June has encouraged smaller rivals to consider their strategic options.

Although PokerStars is still some way from taking a decision on a possible IPO, analysts believe a listing would enable it to become one of the industry’s main consolidators. One analyst said: “There are more than 1,000 internet poker sites, but in three or four years I would expect there to be no more than 50 or 60. As growth slows, so consolidation will become the name of the game.”

Although smaller than PartyGaming, PokerStars, which has a market share of about 10 per cent, has a strong franchise through its involvement with big tournaments such as the World Series of Poker Champions and the World Championship of Online Poker.