Online Gambling Giants Party and 888 in Merger Talks - 10-30-06

October 30 - The latest rumor to do the rounds in online gambling circles is one that would have been treated as a complete joke a month ago. Suddenly a merger between online gambling (not so) giants (any longer), Party Gaming and 888 Holdings, is not so far fetched any more...

Both Party Gaming and 888 have taken a huge hit since the signing into law of the much criticized  "Unlawful Internet Gambling Enforcement Act of 2006". The world's two biggest online gambling companies both decided to pull out of the US. This severely affected Party Poker and 888's 888.com and Pacific Poker brands, and lead to Party Gaming canceling its interim dividend.

The foundation of both these gambling giants has been the number game, which is exactly why a merger is not at all far fetched. A merger would again push the numbers of bums in seats at the poker tables, something which Part Gaming has been really good at. Both Reuters and Financial Times reports that the two have been in early talks.

Part Gaming is currently sitting on £100 million in cash, so acquisitions are a foregone conclusion. Party Gaming has already acquired Gamebookers, a sports betting operator, for just over £100 million.

888 Holdings is in a similar position and has been rumored in various possible acquisitions, but nothing has been confirmed to date.

With the changing landscape in the online gambling space, acquisitions and mergers will be the order of the day, as many small operators will struggle to service.

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