London newspaper The Guardian reports that PartyGaming, the world's largest online gambling company, is on the verge of acquiring an online sports book in an effort to further diversify its revenue streams. The newspaper says its sources for the information have been briefed on PartyGaming's plans to fund a series of online sports betting acquisitions with the proceeds of a bond issue that could raise between £221-276 million (US$400-500 million).
The Guardian's report indicates PartyGaming is currently in advanced negotiations for the purchase of a privately-owned European sports book operator and that the company could reveal more information to the public within the next two weeks. For the moment, however, PartyGaming declines to comment on the matter. It is anticipated that the purchase price would be "relatively small in the context of the fund-raising," but additional sports betting purchases might also be planned for the near future.
Should PartyGaming venture into sports betting it is expected that it would not accept sports wagers from gamblers located in the U.S., which is home to about 80 percent of its customers.
Earlier this week PartyGaming released its new online backgammon wagering product, PartyGammon.com, which uses the same PartyAccount shared purse technology as the company's other gambling offerings, PartyPoker.com, PartyCasino.com, and PartyBingo.com. An integrated sports betting product would likely also use the PartyAccount platform.
Much market and media buzz that surrounded PartyGaming earlier this week speculated that the company was considering issuing debt to fund an acquisition, but it was thought that the acquisition would be a traditional bricks and mortar gambling company. It now seems, at least for the immediate future, that the company will continue to expand online rather than into land-based operations.
With a period of much consolidation in the online gambling industry being predicted by market observers for the next several months, picking up sports betting operations seems like a plausible thing for operators without them to do. Sports books are essential to any operation that wishes to be a one-stop-shop for online gambling and they increase companies' ability to cross-sell other products.
One of PartyGaming's main rivals, 888 Holdings, which operates PacificPoker.com in addition to the world's largest online casino 888.com, revealed months ago that it also seeks to acquire a sports book that does cater to American bettors.
The Guardian has also reported that PartyGaming's sponsorship deal with Harrah's Entertainment to make its play-for-free PartyPoker.net site an official sponsor for the 2006 World Series of Poker is thought to be worth about £20 million ($36 million).
The sponsorship will put the PartyPoker.net logo in the center of every playing table of the 2006 WSOP at the Rio All-Suite Hotel & Casino, which began June 25th and entails 44 separate events, including the televised $10,000 No Limit Texas Hold 'em World Champsionship Event, which takes place July 28 - August 10.
The 45 events of last year's WSOP shattered all participation and prize money records for a live poker tournament, generating 32,341 player entries and more than $106 million in gross prize money. Joseph Hachem of Melbourne, Australia, won the No Limit Texas Hold 'em World Championship and an unprecedented $7.5 million.
The WSOP's kickoff event-- the third annual Tournament of Champions, which consists of 27 of the top WSOP and WSOP Circuit players of the past year competing in a freeroll No Limit Texas Hold 'em tournament-- culminated today with PartyGaming spokesperson Mike Sexton seizing victory. Another company spokesperson, Mike O'Malley also participated in the tournament.