Devilfish Gaming Floats on the PLUS Market

5 March 2008

An online poker company that has been flying under the radar for the last two years floated today on London's PLUS Market, raising £1.2 million for an initial market capitalization of £3.2 million.

Devilfish Gaming, named for international poker champion Dave "Devilfish" Ulliott, has been operating since December 2005, and according to CEO Paul Barnes, intended to go public in 2006. Unfortunately, the company's plans hit a snag when the U.S. Congress passed a nasty little law that forced the offshore I-gaming industry out of the United States.

But, today, the company's dreams came true and Barnes calls today's float a success.

"Well, certainly today we raised exactly the amount we intended to raise," Barnes told IGN. "So, from that point of view it was successful. We had a few delays along the way, but that's minor in the grand scheme of things."

Barnes said that while historically, the Plus Market has been attractive to small and mid cap companies, now you will find bigger companies coming to it because the liquidity of share dealing on Plus is increasing all the time. So, it's not just for the little guy anymore.

Devilfish chose to list on PLUS because it was a bargain compared to listing on the Alternative Investment Market.

"Plus Market is a very interesting market and has a relatively low cost associated with floating a business -- certainly a major order of magnitude less than floating on the AIM or most other stock exchanges," Barnes said. "It's a fully listed stock exchange with increasing liquidity in London, and London is probably the best place in the world to float a gaming company. So, it really boiled down to cost."

Now that Devilfish is being traded publicly, the company intends to capitalize on the brand by developing more products. "We are going to invest some of that money in revamping the infrastructure of the business to add new gaming channels, including casino games, bingo and sports betting. We are building a business which is multi-channel," Barnes said. "You'll see a lot of new products offered under the Devilfish brand in the coming months and hopefully we'll be a welcome addition to the market."

Devilfish does not accept customers from the United States or from any jurisdiction where online gambling is illegal.

"We'll only enter the U.S. market when it's fully legal to do it and when the U.S. authorities have brought in a regulatory licensing regime, whenever that happy day comes; if it ever comes," Barnes said. "But for now we're definitely staying out of the U.S. and anywhere it's illegal to indulge in online gaming."

The company is run by Barnes, an I-gaming veteran; Finance Director Andrew John Alec Flitcroft, a veteran of the technology and internet sectors and Executive Director Karl Hutson, who has eight years in the Internet sector, including as operations executive at Paddy Power Poker. Company namesake Ulliott is its largest shareholder (27.8 percent), but he is not an executive at the company. While he has been present since the conception of the brand, Ulliott is more of an ambassador, taking an active role in certain poker promotions, Barnes said.

"We go to Dave for advice and we have regular meetings with him and we get his buy-in on our plans and what we want to do," Barnes said. "But the actual running of the company comes down to me and my team."

It takes quite a leap of faith to float and promote a new online poker company in today's market, especially after what the industry has experienced in the last year.

I think it is worth the risk. There is no doubt it's a high risk investment, and we made that perfectly clear when we were raising the funds. But high risk brings high rewards if we get it right. Whereas there is plenty of competition, there are also lots of bad companies out there doing a poor job and we think we can do a better job.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.