The Hindu Business Line : Betting big... online

A casino is the last place to find Vikrant Bhargava — he has yet to come across one that allows stakes low enough for him to feel comfortable. And yet, it is to poker that he owes his whopping net worth of £592 million. With elite qualifications from IIT-Delhi, and IIM-Calcutta, he was serving the Bank of America and then British Gas until seven years ago when he drew Lady Luck's attention. It all began when he sent a comradely email to his IIT friend Anurag Dikshit, then a 25-year-old computing wizard busy developing gaming software for an Internet start-up founded by American lawyer Ruth Parasol.

Before long, Jaipur-born Bhargava was with PartyGaming Plc, then based in the Dominican Republic, driving its marketing strategy. At the time of going public on the London Stock Exchange in June 2005, the company was valued at £4.6 billion, Britain's biggest that year. And a rank outsider like Bhargava, among the company's four top shareholders who sold 23 per cent of their combined stock for the IPO, struck a pot of gold, without so much as touching a card. To be sure, Bhargava had played for high stakes, much like Parasol, one of the world's wealthiest working women today; her husband Russ DeLeon, an attorney and a serial entrepreneur; and Dikshit, whose net worth, according to the latest Forbes survey, is $3.1 billion. While Dikshit holds 30.4 per cent shares, Ruth and Russ hold 15.7 per cent each, and Bhargava 8.6 per cent.

The Beginning

The idea first took shape in 1997 when the Internet's boundless possibilities began to show up. Parasol, after stints in a personal injury law practice and her father's business of handling billing for the adult entertainment industry, decided to sever her ties with a past that, apart from good money, had also earned her the misnomer of `a Net pornographer'. Sighting a business opportunity in virtual gambling, she started PartyGaming. A year after the launch of Starluck, an online casino that licensed third-party software, she roped in Dikshit to develop a proprietary gaming and processing software. When Bhargava joined them in 2000, the company was still very small. "One of the priorities was to hire a team of professionals who could help grow the business," recalls the 34-year-old Group Marketing Director of PartyGaming and the only founder who gives interviews.

The Gibraltar-incorporated company has since become the world's largest online gaming company, which owns the world's largest virtual poker room (PartyPoker.com launched in 2001) and casinos (PartyCasino.com and Starluck Casino.com). For PartyGaming, Gibraltar is also perhaps an apt base for what it literally means: an invincible fortress. That's because a company moored in poker, casino and bingo must constantly guard against adversaries ranging from regulators to real casinos. True to its name, the laissez-faire British crown colony, sprawling on a narrow, rocky peninsula stretching into the Mediterranean Sea, is nothing short of a legal sanctuary for PartyGaming.

At its glitzy 14-storey head office overlooking the harbour, the ironies of borderless virtual worlds are apparent in full force. PartyGaming is the brainchild of an American, but online gambling is banned in her own country. So the $8-billion company has no assets in the US. And yet, well over half of its revenue comes from the US alone: More than a third of Internet gamblers, says the American Gaming Association, are Americans. PartyGaming set sail at the swell of the dotcom tide, but continues to ride high long after that tide has ebbed; the company is worth more than British Airways today.

Scorching pace of growth

And to think, none in the top three levels of key people has a poker background. "But ours is like any other eCommerce business," explains Bhargava, "where what you need to succeed are technology and back-office infrastructure to support the customers and the ability to process transactions online and attract more customers." While the team was always upbeat about the potential of online gaming, Bhargava says that no one could have expected the industry to grow at such a scorching pace. "No market research will ever forecast 800 per cent year-on-year growth. We've all been pleasantly surprised by this growth."

That, of course, has resulted from early innovations: A live `PartyPoker.com Million' tournament played on luxury cruiser ships for lucrative prizes of up to $1 million (this tournament — with Mike Sexton, America's best known poker personality, as a consultant — has even attracted the likes of Ben Affleck and Nicole Kidman); a bad beat jackpot that, at times, surged over $600,000; the world's largest poker school at PartyPoker.net; incentives to outsiders for recruiting new players and so on.

But what also set the stage for PartyGaming's success was Dikshit's software that allows simultaneous sessions for tens of thousands of players from around the world — nearly 200 countries as of now. Last year alone, PartyPoker.com hosted over one billion hands of real money poker and took wagers of over $45 billion. PartyGaming, which rakes in a small slice from each bet as a commission, clocked revenues of $977.7 million in 2005.

More Innovation

Recently, the company introduced PartyGammon, based on the "5,000-year-old backgammon skill-game that requires a keen sense of timing and calculation". Earlier this year, the group launched PartyCasino as part of its fully integrated, Party-branded systems platform that enables customers to play backgammon, poker and casino, all using one account and a shared purse. Says Bhargava, "People play online for entertainment. Why restrict them to one game? By offering them a one-stop shop for gaming entertainment, we expect to increase the amount of time they spend on our brands as well as their value to us."

We are now launching multilingual versions of poker, followed by multicurrency offerings towards the end of this year. - VIKRANT BHARGAVA

Bhargava says the company has seen an increasing number of new players — a good 40 per cent in the first quarter of 2006 — from outside of North America. "We are now launching multilingual versions of poker, followed by multi-currency offerings towards the end of this year. These are likely to further increase the player-base outside of the US." The company also plans to add a new game later this year.

Online whirr...

In the virtual world of poker, the whirring of cards, clattering of chips and clacking of bets and raises are all there. But anteing up, be it for fun or money, comes without asphyxiating cigarette smoke, erratic ventilation systems, asterisked utterances, germ-laden chips and brain-teasing calculations. Instead, players get the snug comfort of split-second synchronisation of their actions and disembodied anonymity, where they can play as icons, caricatures or photographs.

It's no surprise that more and more poker aficionados are making the leap to Internet poker: PartyGaming draws as many as 80,000-95,000 players at peak times. In the next five years, estimates an expert at the British firm Global Betting and Gaming Consultants, almost $22 billion or nearly 7.5 per cent of the world's total gross gambling yield will be wagered over the Internet. "Studies suggest that there are an estimated 100 million poker players worldwide," says Bhargava. "As of now, only around 3-4 million of them have played poker for money online. We therefore expect the market to grow over time, though we expect growth rates to moderate."

The People and... the Legalities

Ask Bhargava what propelled his company's growth and the emphatic response is "people, people and people". Having attracted enormous talent from around the world, including our own IITs and IIMs, PartyGaming sets store by smart professionals ranging from experienced executives to investment bankers. The group has over 1,200 employees spread across Gibraltar, London and Hyderabad. "We've had a great team," says Bhargava, adding that the company environment has further fostered an entrepreneurial spirit. "Even junior employees could execute their ideas and what we have seen is innovation and determination to succeed. When employees feel like owners, are treated with respect and rewarded for good work, they start behaving like owners, which can only lead to people putting in their best and doing what is best for the company."

On the legal challenges his company lives with, Bhargava says, "Rules and regulations differ in every country around the world. This won't change and we have to adapt our business to cater for all these regulatory variances." He is confident that the company's legal team can help them rise up to various challenges and adds that they continue to closely monitor the legal environment for online gaming around the world.

"The introduction of online gaming legislation by the UK government is a welcome move," he says. "We advocate regulation and hope that other governments around the world will follow the UK's move."

Reports of PartyGaming's foray into sports betting have done the rounds for some time now. Ask Bhargava about the company's plans and all that he says is, "As much as I'd like to tell you about our future plans, I don't want to give away valuable information to our competitors." Hiding cards and keeping a poker face, one gathers, is no less crucial in the virtual world.

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