The company, which avoids paying the UK's 9 per cent betting tax because it is based offshore, is run by chairman Mark Blandford, who has sold his betting shops to the Tote bookmakers.
Mr Blandford, who will retain a 30 per cent post in the flotation, is launching Netbet on the Ofex - the specialist market for untried share issues.
The company is offering investors 1.719m shares at 70p each, raising pounds 1.2m to finance expansion and listing 10m shares on Ofex.
The listing and offer went ahead yesterday in spite of the high street bookmaker William Hill's failure to float last week because of lack of interest from institutional investors.
Netbet began operating last October with a five-year licence from the betting authority in Alderney.
It offers bets by phone and Internet on live worldwide sporting events.
These will include European and UK football, rugby, cricket, tennis and selected horse-racing.
It is also testing software to allow it to offer bets on US sports such as American football, basketball, baseball and ice hockey.
The company expects to report a loss of pounds 1.1m on a turnover of pounds 1.2m in the year to the end of March 1999.
But the revenue from Internet betting worldwide revenue is growing rapidly and Netbet "intends to become one of the world's leading sports betting operators within a period of three years".
Up to 40 per cent of turnover after the first full year will be in North America, 25 per cent in Europe and 20 per cent in Asia, the company believes.
Sports betting is a highly competitive business and up to a dozen competitors will open Internet sports betting operations in 1999. Investors should apply through their own stockbroker. The offer is not underwritten and may not be suitable for cautious investors, the prospectus warns.
It will close when fully subscribed and in any case no later than 12 April.