By Adam Ulick | December 15, 2009

Over the weekend, news broke that PartyGaming may be taking on another major business acquisition by merging with another European-based online gaming group, bwin. The two sites are two of the largest online gaming ventures in Europe and a potential merger could create a business valued at more than $3 billion.

The initial reports over the weekend said that it was PartyGaming Chief Executive Officer Jim Ryan leading the charge to broker the deal. The idea of the merger has been floating around the rumor mill since the summer, but it was only recently that major news outlets like the London Sunday Times reported that the deal was a distinct possibility. While PartyGaming has a very strong presence in the online casino market and a rapidly growing bingo venture, its online sportsbook division, PartyBets, has stagnated as of late. The company’s online poker division, Party Poker, has seen major declines in profits ever since Party Poker removed itself from the US market following the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, but the poker room is still one of the largest in the world.

bwin, on the other hand, is best known for its strong sports betting division, so the merger between the two seems to make a lot of business sense. However, the reports of a merger between the two companies may have been premature, at least according to a Reuters report issued on Monday. The brief article revealed that bwin denied being in advanced talks with Party Poker or any other gaming venture.

“We are always talking to everyone, because we believe that there will be more consolidation in the sector. (But) we are not in any advanced talks, including with PartyGaming”, a bwin spokesperson told the news service.

Since news of the rumored merger broke, both companies saw the price of stock jump in value. Party Poker, which is publically traded on the London Stock Exchange under the symbol “PRTY,” saw an increase of more than 4%. bwin shares, which are traded on the Vienna Stock Exchange, were up 2.5% as well.

This news comes less than a month after another rumor surfaced that 888.com and bwin would be joining forces. Both Gigi Levy, Chief Executive at 888.com, and Norbert Teufelberger told E-Gaming Review Magazine that there was no truth to the speculation. While bwin representatives have come forward to dismiss talks of this latest merger as well, so far, PartyGaming has remained mum on the matter.

Party Poker has spoken before about wanting to strengthen the PartyBets division of the company and the company has gone out of its way to broker a number of business to business deals in 2 009, including the acquisitions of bingo company Cashcade and the World Poker Tour brand. For now, the merger appears to be nothing more than talk, but, should it go through, the resulting company has the potential to be one of the biggest in the business.

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