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PokerStars to move its base before possible London float
Published: 2005-08-03
 PokerStars to move its base before possible London float
By Dominic Walsh
POKERSTARS, the world’s second biggest internet poker company, will announce today that it is moving its operations to the Isle of Man, presaging a possible stock market flotation.
The group, which is controlled by the Scheinberg family of Israel, becomes one of several gambling companies eyeing a possible London listing alongside Coral Eurobet, Gala Group, Betfair, Cassava Enterprises and Trident Gaming.
PokerStars, which is currently based in Costa Rica, has secured a licence from the Isle of Man Government and plans to move to the island later this year.
It has appointed headhunters to find a chief executive to run the company from its new base.
Bill Mummery, the head of e-gaming development for the Isle of Man, said that the decision by PokerStars to relocate there was a “milestone” as the island sought to position itself as an attractive jurisdiction for online gambling operators.
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.
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Float would pay 888.com chief $60m
Published: 2005-08-02
 Float would pay 888.com chief $60m
By Dominic Walsh
THE chief executive of Cassava Enterprises, the Gibraltar-based internet gambling operator behind 888.com, looks set to pocket up to $60 million (£35 million) when the company floats on the London Stock Exchange as early as next month.
The disclosure will re-ignite the issue of corporate rewards in the gambling industry after the huge payouts to the board of PartyGaming, the world’s biggest internet poker company, when it floated in London at the end of June. John Anderson, who also runs Burford, the property group, is understood to be sitting on a potential stake of as much as 4 per cent in Cassava when it pursues an initial public offering (IPO).
The IPO, which analysts believe could take place as early as next month, is expected to value the company at more than $1.5 billion (£850 million). It is tipped to deliver earnings before interest, tax, depreciation and amortisation (ebitda) of about $70 million this year. Cassava recently appointed HSBC to advise on its strategic options and the success of PartyGaming’s recent £4.64 billion IPO is expected to provide the impetus for the company to take the same route.
The PartyGaming listing crystallised a £50 million-plus paper fortune for Richard Segal, its chief executive, while even the non-executive directors shared several million pounds.
The biggest winners from Cassava’s IPO will be the two pairs of Israeli brothers who founded the company seven years ago. Avi and Aaron Shaked have a stake of about 70 per cent, while a family trust controlled by Shay and Ron Ben-Yitzhak has about 20 per cent.
Shay Ben-Yitzhak is the only one of the four men involved in the day-to-day running of the business. They set up the business after buying a gaming licence in Antigua for $100,000.
Like PartyGaming, Cassava’s poker and casino websites draw many players from the US, where internet gambling remains a legal grey area, and the issue is bound to attract fresh comment when Cassava lists its shares.
Credit Suisse First Boston, which has been advising Cassava’s shareholders, had been expected to act as adviser to the company but is understood to have decided against such a move over the US legality question. HSBC, which will act as lead underwriter to the issue, is expected to work alongside Numis and Lazard in preparing the company for flotation.
Cassava is only one of several gambling companies considering a listing. Coral Eurobet, the bookmaker, and Gala, the bingo and casino operator, have both appointed advisers to possible listings, while internet-based operators are queuing up to cash in on the interest created by PartyGaming.
While PartyGaming looks set to enter the blue-chip FTSE 100 index next month, Cassava, Coral and Gala are all candidates for the FTSE 250. Cassava said yesterday that it had made no firm decision on an IPO.
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