Friday, June 03, 2005

Party Poker: A Brief History

PartyGaming, the company that owns popular online gambling site Party Poker, will go on the London Stock Market. It's estimated worth will be $10 billion, the combined value of British Airways and EMI, according to the Guardian.

The article gives a brief overview of the site's background, and it's pretty fascinating. In 1998, a California woman named Ruth Parasol sold off all of her holdings in a variety of lucrative porno websites and wanted to reinvest the money. So she hooked up with an young Indian programmer, got him to write some online gambling software, and they started a new company.

Online gambling was the new buzz and she found a friend of a friend, Anurag Dikshit, a computer engineering graduate from the Indian Institute of Technology, to create a programme for casino games such as roulette.


Hey, I'm allowed to goof on the guy's name. He's just made more money than I can even conceptualize with my feeble primate brain.

At the top price, Mr Dikshit, who owns 42%, will be worth £2.1bn at the age of 33. Ms Parasol, in her late 30s, and her husband, Russ DeLeon, each own 20%, worth £1bn apiece. Billionaire status has rarely been achieved so young or so quickly.

If the valuation seems implausible, look at the numbers. In three years PartyGaming's pre-tax profits have jumped from $5.8m to $89.2m to $372m. In the first three months of this year it made $125m, or $1.4m a day. That works out at $58,000 an hour, or about £500 a minute.

2.1 billion POUNDS. I'm far too lazy to do the math on how that converts to dollars, but it's got to be a whole dikshit load.

This online poker thing is a genuine worldwide phenomenon. It seems like everyone I know watches poker on television or plays poker on the Internet. That Antonio Esfandiari article that got linked on Paul Phillips' blog still pulls in more hits than anything else I've ever written. (Hence the follow-up article here...)

Poker's a lot of fun, and playing online is incredibly convenient, and not terribly expensive. You can play with $20 or so for at least an entire evening if you stay in the low-stakes tables. But it is amazing they've been able to make so much money at it so quickly. I remember a few years ago, when all the print media was talking about consumer security concerns with spending money online, how poeple didn't like to give out their credit card numbers on the Internet for fear of fraud. Well, I think it's safe to say that only the elderly, the Luddites and the paranoid currently espouse this philosophy. Everyone else is perfectly content to put their savings into Party Poker and let it ride.

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