Poker princes eye pot of gold - IIT alumni lord over company valued at $6 billion
Read more below
- Published 19.03.05
London, March 19: Two Indian batchmates from IIT Delhi, Vikrant Bhargava and Anurag Dikshit, who set up the online Party Poker website four years ago, are thinking of floating their company which is being valued by financial analysts in London at a mind-boggling $6 billion.
Bhargava, 32, has a 15 per cent stake worth an estimated ?450 million, in the company, called PartyGaming.
His friend, Dikshit, 33, has a 40 per cent stake, which city analysts value at ?1.25 billion.
Newspapers have called the couple ?gambling tycoons of the Internet age?. It is certainly true that online poker has taken off in a big way, especially in America.
Bhargava, PartyGaming?s marketing director, was born in Jaipur, educated at the Indian Institute of Technology, Delhi, and the Indian Institute of Management, Calcutta. Having worked as a credit officer for the Bank of America, he teamed up with Dikshit to set up their online poker company four years ago.
They employ 1,000 persons at a call centre in Hyderabad in a business which has gone through the stratosphere.
Last year, PartyGaming made profits of $350 million, which are expected to rise to between $500 million and $600 million this year. Investment bankers Dresdner Kleinwort Wasserstein and Investec have been called in to advise on the suitability of a flotation.
With a notional value of $6 billion, the company will be among the Financial Times Stock Exchange Index (FTSE) top 100 companies on the London Stock Exchange.
Before the flotation can take place, however, the rules governing Internet gambling, which is not legal in the US, will have to be revised.
In interview with the Guardian today, Bhargava said that more than 70,000 people play on Party Poker simultaneously. Two years ago, the figure was fewer than 2,000.
?People need a $50, $100, $150 deposit to play; $500 can last a player a long time,? he said.
Party Poker makes its money by taking a small slice from each pot ? the rake, in the jargon.
A dollar here and a dollar there soon add up, particularly as the website runs round the clock.
?In early 2000 everybody was talking about Paradise Poker and we saw them and thought ?they?re making money, so can we?,? said Bhargava.
Hollywood celebrities have jumped on the bandwagon, with the likes of Ben Affleck and Nicole Kidman playing in a tournament that generated a television audience of 13 million.
Bhargava?s view is that the US Wire Act applies to sporting events, not poker. He feels he is doing nothing illegal.
?I go to the US very frequently,? he said. ?I am an Indian passport holder and have a 10-year multiple-entry visa to the US.?
Their site has been attacked by hackers.
?In early 2004 many sites in online gaming space went down and we went down multiple times,? disclosed Bhargava. ?Since then we have been attacked a few times but we now have systems in place to fend it off.?
Online poker is said to be a massive business ? it is estimated that the worldwide commission earned by operators of poker sites runs at about $4.5million a day. And the boom in online poker has created a whole new crop of Internet millionaires such as Bhargava and Dikshit.
Bhargava said the appeal of online poker is that, unlike traditional bricks-and-mortar card rooms, it allows players to gamble for low stakes. ?I could never find a casino where I could play poker at low enough stakes where I felt comfortable. The atmosphere is intimidating and the stakes are too high. (Online poker) provides clean, inexpensive entertainment.?