According to reports by Reuters and the Sunday Times and Financial Times newspapers, two of the largest quoted online gaming companies, Party Gaming plc and 888 Holdings plc, are said to be in early talks to discuss a possible merger of their businesses.
Party Gaming and 888 Holdings respectively own leading poker sites Party Poker and Pacific Poker, and each have suffered severe setbacks following the passing of the US Safe Port Act legislation containing the "Unlawful Internet Gambling Enforcement Act of 2006", with both companies deciding to pull out of the USA completely, as a consequence. This has also been detrimental to 888's leading online casino brand, Casino-On-Net.
A merger would increase the pulling power of the combined entity as it would help once again build up a site that is attractive simply because of the numbers of players at the tables. This is the virtual circle that Party Poker created and benefited from through its aggressive marketing and growth in recent years before the US bombshell hit.
Party Gaming has already cancelled its interim dividend giving it in excess of £100 million in cash to utilise elsewhere, almost certainly for acquisitions. Two months ago, Party Gaming acquired the Gamebookers sportsbetting site for just over £100 million and there was recent speculation it was after Gamesys, another rival firm. Before that, there was unfounded talk of Party Gaming having its eye on the Victor Chandler group which, like Party, is based in Gibraltar. Victor Chandler later denied this was being discussed.
Similarly, 888 Holdings denied it was looking at UKBetting, another smaller UK quoted online gaming company, after UKBetting confirmed it had received enquiries from certain interested sources.
Other companies mentioned in the Sunday Times report as being active in seeking to consolidate are Sportingbet (owner of Paradise Poker), Excapsa and Bwin.
There are still countless numbers of smaller independent operators in today's market and it seems certain that 2007 will see those numbers shrink rapidly as the larger players grow by acquisition or merger while the smaller ones will either be swallowed up or squeezed out. The race is on to grab the European and Asian markets!
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