Private Investor: I'm a winner at poker without ever playing the game

Like the Cincinatti Kid, I imagine, if you're very, very lucky, you can make quite a decent living out of playing poker. I believe that the best paid poker player in the world is a chap named Greg "Fossilman" Raymer, who won the 2004 World Series of Poker. Mr Raymer is a patent attorney from Stonington, Connecticut, and he took home $5 million after the final of the series at Binion's Horseshoe Casino, Las Vegas, last April.

I've never played poker. Indeed, I've never been into any card games, being the sort of player who would always lose at patience. It seems to me that you need a good deal of patience to learn to be good at stuff like bridge and poker, and I have never been interested enough to stick these games out. If you don't play for decent stakes, for matchsticks or something instead, then it's all a bit futile; and if you do play for proper money, then it's too nerve-racking and, well, a bit of a gamble. I read somewhere that it's also illegal to do so outside premises licensed for the purpose, such as a casino.

I am, however, perfectly happy to gamble on the stock market, or invest carefully for long- and short-term returns, as I prefer to think of it. Regular readers will no doubt see where all this is leading to: another gloating session about my investment in Sportingbet.com.

A few weeks ago, it was still a fairly obscure firm, but it seems to be on everyone's lips now, a byword for the new boom in internet gambling, as indeed it is. Having bought the successful Paradise Poker concern in the United States, it is now one of the biggest of its kind in the world, and punters of all kinds have suddenly become interested in it. So interested, in fact, that they have chased its shares from the 192p or so, at which I topped up my holding a few weeks ago, to well over 300p this week. The shares stood at 20p in the autumn of 2003, their low point.

So, Sportingbet: bubble or business? A bit of both, I guess, as the speculation in the stock is becoming dizzying, even though its long-term growth prospects may be very sound indeed. In this respect, it feels uncannily like a small-scale re-run of the dotcom mania, as if no one had learned any lessons at all from the last debacle. And yet it still makes good profits out of a real business, although one with a candy-floss flavour.

The company makes money from allowing people to play poker with each other on-line, about as far away from a "real" business such as making cars or steel as you can be. So what? I've got money in lots of what are now old, mature busnesses, such as Shell and Tesco, and Vodafone even, by today's standards. Besides, how can you argue with a figure of 2.2 million customers?

In the half-year to January 31, Sportingbet.com posted underlying pre-tax profits of £18.3m, up 118 per cent. The Paradise Poker site, which was acquired for £196m last November, returned £8m in operating profit for the half-year. The beauty of Sportingbet is that it is just a profits machine. Almost every penny and every cent that it generates in revenue goes straight to the bottom line. With little, if any, variable cost increase per bet, every new punter is a profit generator. It's really as simple as that.

No wonder the shares have been doing so well. And some older investors have been taking the opportunity to sell out. I'm sticking with it for the ride, though, running my profits as happily as any devil-may-care vacationer in Las Vegas. There are risks, mostly regulatory, from government understandably worried about problem betting and with an eye to the profitability of the business as a useful source of taxes.

In the longer run, you have to ask yourself whether the low barriers to entry in this on-line business really afford outfits such as Sportingbet the protection they need from competition. I also find it difficult to believe that poker is really such a popular mass-market game, rather than just a fad the world is going through. So, it could all end in tears and I could walk away from this casino wiped out. After all, I'm not the Cincinatti Kid, am I?

s.o'grady@independent.co.uk