Poker's Leading Operators Spread Their Wings

The U.S. Department of Justice's crackdown on Internet gambling advertising doesn't appear to be slowing the world's top online poker rooms.

PokerStars.com, the site that sponsored the last two World Series of Poker champions, announced last week that it's gearing up for an intense TV campaign scheduled for the last quarter of 2004.

Meanwhile, the Internet's most popular poker room, PartyPoker, said it's considering a float on the London Stock Exchange.

One year after the publicizing of a lengthy grand-jury investigation into the advertising practices of online gaming sites, the two companies appear to be on solid footing.

The DOJ warned numerous media outlets (including newspapers, magazines, online portals, TV and radio stations) that accepting advertisements from Internet sports books, casinos and poker sites was aiding and abetting criminal activity.

Hundreds of subpoenas were subsequently issued to entities that carried such ads, and the number of media outlets willing to accept online gambling ads dwindled throughout the process.

The tactic seemed to keep the industry in check, but operators are beginning to find willing partners to spread their messages.

PokerStars recently brought Nolan Dalla, a spokesman for the World Series of Poker, on board to bring the site more exposure. Dalla said they're finishing advertising deals with several TV stations and that PokerStars ads will be airing by the end of the year.

He also said that while many larger networks and broadcasters are leery about carrying advertisements from online gaming sites, local affiliates have been more eager to work with PokerStars.

"Even though we may not be going to the networks and running commercials there, we do anticipate running a lot of commercials on local or smaller networks," Dalla said. "It seems the restrictions on this happening are not as great, so we think we can do well there."

PartyPoker commercials returned to the air last month, after being pulled from broadcasts of the World Poker Tour and other popular poker programs. The group got around advertising restrictions by producing commercials for PartyPoker.net, the free-play version of PartyPoker.com.

The company relies heavily on U.S. play, and the legal situation in the States has forced company officials to reconsider the feasibility of a share offering. They might be able to find a partner, and investors, in the United Kingdom, where a handful of gambling sites are traded on London's AIM exchange.

But Vikrant Bhargava, chief executive of PartyPoker, says his company is probably too big for the AIM.

"Any listing we have cannot be on AIM," Bhargava told The Telegraph in London. ". . . Our market capitalization would be too big. An AIM listing is what I would call a 30 percent listing, and it is not something a big company such as ours could consider."

So despite rumors that PartyPoker is about to go public, Bhargava said no movement in that direction is expected in the next 12 months.

If and when that happens, the company would likely use the float to acquire other poker sites, similar to the approach BetOnSports is taking in the bookmaking industry. An IPO would not be needed to raise capital, analysts feel, because the site takes in nearly $1 million a day in revenue.

The site has reached this level in only three years of operation, and the company expects to reach the $1 billion mark in revenues for the first time before the end of thi