Poker Stars Moving To Isle Of Man

Published: Friday, August 05, 2005 Online-Casinos.com

POKER STARS MOVING TO ISLE OF MAN

And inevitably, rumours that a London listing is planned

Following UK media speculation this week, Online-Casinos.com & InfoPowa contacted the management at second ranked online poker site Poker Stars to ask for confirmation that the company was moving to the Isle of Man. We also asked whether speculation that a London listing was planned had any foundation, who the broker would be and what sort of listing price we might expect.

In a prompt and courteous response, the company confirmed that it has obtained a license in the Isle of Man and would be moving to that jurisdiction in the near future. However, the response emphasised that the company would not comment on speculation regarding a listing - a fairly standard response under these circumstances.

Poker Stars is owned by an Israeli family called Scheinberg and has been based in Costa Rica. It is understood that a new CEO who will operate from the Isle of Man is currently being sought.

It is believed that the IOM's action in removing bans on its licensees accepting US bets was an important incentive for Poker Stars to make the big move.

The company reportedly has an estimated 8 percent share of the market, compared with PartyGaming's 54 percent, and Cassava Enterprises (Gibraltar) Ltd.'s 6 percent (through its PacificPoker brand). "The Times" says PartyGaming has obtained a license from the government of the Isle of Man and plans to move to the island later this year as well.

Founded in 1999, PokerStars is considered a pioneer of online poker, together with ParadisePoker, which currently has a 5 percent share of the market. Media sources claim that PokerStars' rake (commission from players) is $400,000-500,000 a day, its annual turnover is $150 million, and its net profit margin verges on 50 percent.

If PokerStars holds an IPO, it will reportedly be at a company value in excess of $1 billion.

Analysts covering public online gaming companies believe a listing would enable Poker Stars 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."