PartyGaming takes a gamble with €102m sports betting buy

PartyGaming, the world's largest online gaming group, yesterday bought Gamebookers, an Antigua-based, Bulgarian-run sports betting group, for €102m (£69m) in cash, to push further into the European market.

The move comes as online gaming operators try to diversify away from the US, the world's most lucrative market, where the government is cracking down on what it regards as an illegal activity. Online gambling stocks, in particular shares in sports betting businesses whose activities are specifically outlawed in the US, crashed in recent weeks after the arrest of the BetonSports chief executive David Carruthers. Recent events have inevitably made acquisitions outside the US look more attractive.

PartyGaming's rival 888 is also looking to add a sports betting operation to its portfolio.

The deal netted backers of Gamebookers, including the chief executive John O'Malia, big windfalls.

PartyGaming has long wanted to acquire a European sports book. The new Canadian chief executive, Mitch Garber, said yesterday: "The acquisition of Gamebookers is an important step forward in diversifying PartyGaming's business from both a product and geographic perspective." The online poker and casino giant wants to cut its exposure to the American market from 75 per cent to around 50 per cent over time.

Gamebookers, which is licensed in Antigua and run from Bulgaria, offers online bets on a range of sports, in 12 languages and 140 countries, with the focus on Europe. It does not take bets from US punters.

While PartyGaming does not plan any changes to the strong Gamebookers brand, its sports betting acquisition will now be integrated into the PartyGaming platform under a name with a "Party" prefix.

A spokesman pointed out the cross-selling potential, with customers moving freely between the poker, casino and sports betting sites. He said: "We've put several ticks in boxes since last autumn" - when PartyGaming was spurred into action by a slowing in poker growth. It subsequently launched blackjack and backgammon games. The Gamebookers acquisition may not be PartyGaming's last. Mr Garber highlighted last week that the company was working on a number of initiatives - Asia is one area where the group is anxious to expand.

PartyGaming will pay Gamebookers' owner, the Isle of Man-based Trident Gaming, €81m on completion of the deal, and €21m in 18 months' time.