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Vikrant Bhargava set up an internet poker site 7 years ago. It just emerged he has made £750m. So what about the losers? By Rachel Stevenson
A former internet porn baron, her husband and two Indian technology graduates are about to become dollar billionaires as a result of the phenomenal growth in online poker.
The four are the business brains that took the age-old game, once the preserve of card sharks in smoke-filled backroom bars, on to the internet and in to the homes of millions of people around the world.
So spectacular has been the rise in internet poker that, after only seven years in operation, the four owners of the world's largest internet poker company, PartyGaming, have a business worth £5.5bn. They now plan to float it on the London stock market and it is set to become one of the biggest companies in Britain by value, overtaking household names such as Boots, Sainsbury's, British Airways and Cable & Wireless.
Ruth Parasol, a Californian lawyer who made her original fortune in online pornography, her husband, Russ de Leon, and two Indian technology graduates, Anurag Dikshit and Vikrant Bhargava, are cashing in £1.26bn between them by selling part of their stakes to outside shareholders. They are holding on to the rest of the shares themselves - giving each of them a worth of between £750m and £2bn.
The company's 1,100 staff, ranging from top management to call centre workers in India, will also share in the bonanza.
Staff will each be given a package of free shares depending on their position and length of time with the company. Even those at a basic level in PartyGaming's Hyderabad call centre could earn more than three times their salary from the windfall.
Companies like PartyGaming have brought the glamorous image of poker - a macho game of nerve, wit, tactics and luck - to millions of ordinary punters. Rather than having to venture in to a casino, punters can play from their computer screen without having to leave home at any time of the day or night
Richard Segal, the chief executive of PartyGaming, said: "What we have done using the technology of the internet is give people the chance to play whenever they want, in their own homes, without the intimidating prospect of having to look their opponents in the eye if they were in a real-life game."
But this is fuelling fears of an explosion in gambling addiction. The online poker market grew by a staggering 466 per cent in 12 months to reach $1.4bn (£770m) last year. Industry sources believe it will double again this year, to $2.9bn. As well as signalling a rise in the numbers addicted, there are fears that the nature of internet gambling means losses are potentially much larger.
Women are particularly seen as vulnerable. Almost 40 per cent of those playing poker online are women whereas just five per cent of women gamble offline. Britons are responsible for four-fifths of Europe's online gambling. More than four million Britons claim to have gambled online.
Globally, about $200m has been wagered in tournaments over the past 24 hours alone, according to the online poker monitoring service, Pokerpulse.com.
Gamblers Anonymous, the gambling counselling service, said it had seen a dramatic rise in the number of calls it receives from people blaming the internet for their addiction.
"Gambling on the internet is like pornography on the internet. Clicking a screen on a computer is much easier for many people than going in to a sex shop and buying the goods face to face. People who are too scared or embarrassed to go in to a betting shop will bet online, and they can also bet unnoticed," said a Gambling Anonymous spokesman.
"As well as removing some of the social constraints around gambling, the internet also removes the physical constraints of having to hand over your cash to gamble. You don't have to keep going to the cash machine. It all happens electronically, which means you keep gambling without it seeming like a real loss. It gives you no time to think and consider your actions."
An arch rival of PartyPoker, Sportingbet, which owns the Paradise Poker website, yesterday said profits for the three months to the end of April had more than tripled. Around 14 games of poker are being played on its site per second. Its daily earnings from poker are around £168,000, up 70 per cent on this time last year, and it now has nearly a million registered customers.
Poker began its mainstream appeal in 2001 when the World Series, where hardened champions slug it out for multimillion-dollar prize money, was televised. Glass tables showed viewers the hands of the players, creating compelling viewing as tensions mounted. Audiences got hooked and wanted to take part themselves. The aptly named Chris Moneymaker began playing poker online and qualified for a seat in the World Series in 2003. He won, pocketing $2.5m in prize money. Most of the large poker sites offer seats in the Series, and these internet success stories are fuelling aspiring players.
Celebrities such as Ben Affleck, Nicole Kidman, Sarah Jessica Parker, Matt Damon and Tobey Maguire are all regulars at televised poker matches, and have also helped give the game a cult appeal.
So big is the potential for companies to make millions from the business that there is now a rush of other online gambling companies listing in the stock market. As well as Party Gaming, which plans to float later this month, Empire Online, another poker website, is planning to do the same. Set up by an Israeli businessman, it is expected to be worth more than £550m.
The millions being made by poker entrepreneurs are being raked in despite the fact it is in a legal grey area. The Government has passed a new Gambling Act to regulate internet betting, forcing operators to be properly licensed. Companies will also have to adhere to social responsibility codes that should ensure children and problem gamblers are protected, and ensure customers are treated fairly by websites.
The US has taken a more puritanical view and is trying to ban internet betting. PartyGaming does not believe its activities do break any US laws, but it is based in Gibraltar where it is free from legal problems.
Who's who in the poker business
VIKRANT BHARGAVA
Aged 32, and originally from Rajasthan, he pursued a career in banking before joining the poker party in 2000, having been asked to come on board as marketing director of PartyGaming by his old college friend, Anurag Dikshit. Married with two children, he is the only shareholder in the company to be seen in public and is a regular face in the crowd at PartyGaming's live poker tournaments.
RUTH PARASOL
A Californian lawyer whose first business exploits were in an even more controversial arena than poker. She made millions in the early 1990s from premium-rate adult chatlines and pornographic websites. By 1997, however, she had severed her ties with porn and hit on the idea of online poker.
RUSS DE LEON
Harvard law graduate who is Parasol's husband and co-shareholder. The pair now live in Gibraltar with their two children. They no longer play any part in running the business, but act as consultants, especially with the legal side of the business. Their combined stake is worth around £2bn.
ANURAG DIKSHIT
Very little is known about the 33-year-old computer whizzkid who created the technology behind online poker. He is a graduate of the Indian Institute of Technology in Delhi, and he was working as a software developer in the US for various companies when he hooked up with Ruth Parasol in 1998. He owns 40 per cent of the company, which is said to be worth around £2.2bn.
RICHARD SEGAL
Aged 42, he was appointed chief executive of PartyGaming last year. Has gambling industry experience, and has worked with the casino and bingo group Rank, as well as running the Odeon cinema chain until it was sold in 2003. A keen poker player, he stands to make as much as £50m from free shares in PartyGaming over the next four years.
A former internet porn baron, her husband and two Indian technology graduates are about to become dollar billionaires as a result of the phenomenal growth in online poker.
The four are the business brains that took the age-old game, once the preserve of card sharks in smoke-filled backroom bars, on to the internet and in to the homes of millions of people around the world.
So spectacular has been the rise in internet poker that, after only seven years in operation, the four owners of the world's largest internet poker company, PartyGaming, have a business worth £5.5bn. They now plan to float it on the London stock market and it is set to become one of the biggest companies in Britain by value, overtaking household names such as Boots, Sainsbury's, British Airways and Cable & Wireless.
Ruth Parasol, a Californian lawyer who made her original fortune in online pornography, her husband, Russ de Leon, and two Indian technology graduates, Anurag Dikshit and Vikrant Bhargava, are cashing in £1.26bn between them by selling part of their stakes to outside shareholders. They are holding on to the rest of the shares themselves - giving each of them a worth of between £750m and £2bn.
The company's 1,100 staff, ranging from top management to call centre workers in India, will also share in the bonanza.
Staff will each be given a package of free shares depending on their position and length of time with the company. Even those at a basic level in PartyGaming's Hyderabad call centre could earn more than three times their salary from the windfall.
Companies like PartyGaming have brought the glamorous image of poker - a macho game of nerve, wit, tactics and luck - to millions of ordinary punters. Rather than having to venture in to a casino, punters can play from their computer screen without having to leave home at any time of the day or night
Richard Segal, the chief executive of PartyGaming, said: "What we have done using the technology of the internet is give people the chance to play whenever they want, in their own homes, without the intimidating prospect of having to look their opponents in the eye if they were in a real-life game."
But this is fuelling fears of an explosion in gambling addiction. The online poker market grew by a staggering 466 per cent in 12 months to reach $1.4bn (£770m) last year. Industry sources believe it will double again this year, to $2.9bn. As well as signalling a rise in the numbers addicted, there are fears that the nature of internet gambling means losses are potentially much larger.
Women are particularly seen as vulnerable. Almost 40 per cent of those playing poker online are women whereas just five per cent of women gamble offline. Britons are responsible for four-fifths of Europe's online gambling. More than four million Britons claim to have gambled online.
Globally, about $200m has been wagered in tournaments over the past 24 hours alone, according to the online poker monitoring service, Pokerpulse.com.
Gamblers Anonymous, the gambling counselling service, said it had seen a dramatic rise in the number of calls it receives from people blaming the internet for their addiction.
"Gambling on the internet is like pornography on the internet. Clicking a screen on a computer is much easier for many people than going in to a sex shop and buying the goods face to face. People who are too scared or embarrassed to go in to a betting shop will bet online, and they can also bet unnoticed," said a Gambling Anonymous spokesman.
"As well as removing some of the social constraints around gambling, the internet also removes the physical constraints of having to hand over your cash to gamble. You don't have to keep going to the cash machine. It all happens electronically, which means you keep gambling without it seeming like a real loss. It gives you no time to think and consider your actions."
An arch rival of PartyPoker, Sportingbet, which owns the Paradise Poker website, yesterday said profits for the three months to the end of April had more than tripled. Around 14 games of poker are being played on its site per second. Its daily earnings from poker are around £168,000, up 70 per cent on this time last year, and it now has nearly a million registered customers.
Poker began its mainstream appeal in 2001 when the World Series, where hardened champions slug it out for multimillion-dollar prize money, was televised. Glass tables showed viewers the hands of the players, creating compelling viewing as tensions mounted. Audiences got hooked and wanted to take part themselves. The aptly named Chris Moneymaker began playing poker online and qualified for a seat in the World Series in 2003. He won, pocketing $2.5m in prize money. Most of the large poker sites offer seats in the Series, and these internet success stories are fuelling aspiring players.
Celebrities such as Ben Affleck, Nicole Kidman, Sarah Jessica Parker, Matt Damon and Tobey Maguire are all regulars at televised poker matches, and have also helped give the game a cult appeal.
So big is the potential for companies to make millions from the business that there is now a rush of other online gambling companies listing in the stock market. As well as Party Gaming, which plans to float later this month, Empire Online, another poker website, is planning to do the same. Set up by an Israeli businessman, it is expected to be worth more than £550m.
The millions being made by poker entrepreneurs are being raked in despite the fact it is in a legal grey area. The Government has passed a new Gambling Act to regulate internet betting, forcing operators to be properly licensed. Companies will also have to adhere to social responsibility codes that should ensure children and problem gamblers are protected, and ensure customers are treated fairly by websites.
The US has taken a more puritanical view and is trying to ban internet betting. PartyGaming does not believe its activities do break any US laws, but it is based in Gibraltar where it is free from legal problems.
Who's who in the poker business
VIKRANT BHARGAVA
Aged 32, and originally from Rajasthan, he pursued a career in banking before joining the poker party in 2000, having been asked to come on board as marketing director of PartyGaming by his old college friend, Anurag Dikshit. Married with two children, he is the only shareholder in the company to be seen in public and is a regular face in the crowd at PartyGaming's live poker tournaments.
RUTH PARASOL
A Californian lawyer whose first business exploits were in an even more controversial arena than poker. She made millions in the early 1990s from premium-rate adult chatlines and pornographic websites. By 1997, however, she had severed her ties with porn and hit on the idea of online poker.
RUSS DE LEON
Harvard law graduate who is Parasol's husband and co-shareholder. The pair now live in Gibraltar with their two children. They no longer play any part in running the business, but act as consultants, especially with the legal side of the business. Their combined stake is worth around £2bn.
ANURAG DIKSHIT
Very little is known about the 33-year-old computer whizzkid who created the technology behind online poker. He is a graduate of the Indian Institute of Technology in Delhi, and he was working as a software developer in the US for various companies when he hooked up with Ruth Parasol in 1998. He owns 40 per cent of the company, which is said to be worth around £2.2bn.
RICHARD SEGAL
Aged 42, he was appointed chief executive of PartyGaming last year. Has gambling industry experience, and has worked with the casino and bingo group Rank, as well as running the Odeon cinema chain until it was sold in 2003. A keen poker player, he stands to make as much as £50m from free shares in PartyGaming over the next four years.
