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

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Pricing Analyst

    £30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Day In a Page

    Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

    The 161-page dossier that exposes Fifa's dark heart

    How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
    Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

    Exclusive interview with Tripoli PM Khalifa al-Ghweil

    'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
    Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

    Raymond Chandler's Los Angeles

    How the author foretold the Californian water crisis
    Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

    Art attack

    Chinese artist who posted funny image of President Xi Jinping facing five years in prison
    Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

    Cher is the new face of Marc Jacobs

    Alexander Fury explains why designers are turning to august stars to front their lines
    Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

    'I'm climbing Ben Nevis for my daughter'

    Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
    10 best wedding gift ideas

    It's that time of year again... 10 best wedding gift ideas

    Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
    Paul Scholes column: With the Premier League over for another year, here are my end of season awards

    Paul Scholes column

    With the Premier League over for another year, here are my end of season awards
    Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

    Liverpool have seen too much tragedy to forget Heysel

    Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
    Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

    Khan’s audition for Mayweather may turn into a no-win situation

    The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor