Industry Consolidation Imminent as Cashcade Sale Nears

5/27/2009 by Gaming Industry Media Staff

Both PartyGaming and 888 Holdings are expected to submit bids this week for Cashcade Ltd., the online bingo company, according to British media reports.

Editor's note: After this article was published, comments were added.

Both PartyGaming and 888 Holdings are expected to submit bids this week for Cashcade Ltd., the online bingo company, according to British media reports.

The Telegraph reports that 888 leads the pack bidding on the Foxy Bingo owner, which is estimated to cost £70 million and £100 million.

Media reports also list Paddy Power, the Irish bookmaker, as a potential bidder.

According to the London Times, the company, which claims to be the second largest operator of bingo sites in the United Kingdom, recently hired Jefferies & Co. to run an auction for the sale.

PartyGaming's chief executive Jim Ryan was not able to comment directly on the Cashcade sale during a telephone interview on Wednesday. However, he did say that, in general, his company is bullish about online gaming consolidation though is cautious on how quickly it will happen.

"It's been rumored to be happening for many years," Mr. Ryan said. "Party plans on playing a material role in the consolidation of the sector, but that will always be contingent upon appropriate valuations and the willingness of parties to make deals happen."

"I think that has been the limiting factor historically is that the gaming sector has been a growth sector, and the valuation expectations of organizations quite often don't get reset during the softer periods like we're experiencing right now," he added.