"Will the Online Gaming Explosion Hold?"

The online gaming industry is gaining an abundance of attention in the press and there is so much talk now about what a good investment these companies are. It is no wonder that a lot of investors are considering investing in online gambling concerns by purchasing shares in one of the online gambling companies that have previously gone public or are about to do so. , PartlyGaming, one these companies, which owns the PartlyPoker.com web site, is slated to float on the London Stock Exchange for something like four to five billion pounds sterling. The stock returns from online online gambling companies stocks have just been incredibly exceptional. As an example, Sportingbets share prices in just two years rose from 18 pounds to 290 pounds. Since the initial offering will be open only to institutions, PartlyGaming’s flotation is sure to dissatisfy some investors. Until the shares start trading, private investors will have to wait before they will be able to buy.

There are many reasons that have been suggested explaining this explosion in popularity of online gambling. One is the increased participation of women. Since gambling online is so much more convenient and private than gambling in a brick and mortar land based casino, many more women are willing to gamble online. Women that would otherwise not be willing to be seen in a land based casino. These are the same women who do not think twos about booting up a computer and gambling online. PartlyPoker estimates that at least ten percent of their online clientele are women. There are other sources that place this estimate at as much as three or four times higher.

Richards Bunter, who is the head of UK equities of Hargroves Lansdown Stockbrokers, commented on how the online gambling business had become normal saying that whereas gambling in the past had been considered almost as a cloak-and-dagger undertaking, at the present time you can now place bets from the comfort of you own home or office. Bunter points out that those who would never think of setting foot in a casino are now playing virtual poker online. Furthermore, Bunter continues that you can now bet on just about any sport, as well as financial stocks and indexes.

This current explosion of the online gambling market, regardless of its causes is creating excellent opportunities for investment. There are those however, who are not so sure. They argue that the fact that online gambling has become normal is no assurance of the industry’s future financial success. , of Chartwells Investments Management head, Robert Haghes says that resistance on the part of the United States to online gambling as expressed through its illegal status in the United States, places the industry at risk. The problem according to him, is that if the US were to relax its stance, this would lead to the creation of a number of large US gaming companies that could take away market share from their UK rivals. Consequently, according to Haghes, growth of online gaming industry stocks has been so quick that no one can be sure that it is permanent.

Justin Stewart, of Seventeen Investment Management echoes Mr. Hughes’ note of caution, when he says that he believes that Internet gambling will suffer a fate comparable to that of the dot com industry a few years back. According to Stewart, an excess capacity exists in the market and some of the smaller players are bound to collapse. This, according to him, should lead to nervousness among investors. He points out that this is also an unregulated sector, which runs the danger of fraud and money laundering. If the sharp growth in share prices continues, Stewart claims, a classic mismatch between the stock market valuation and the real price of the business will result.