After a couple years of gossipy whispering, the rumors are apparently true: PartyGaming and bwin have agreed to a merger that they say will create the world's biggest publicly-listed online gambling company.

Both rival companies are already very big players in the world of online poker, online sports betting, online bingo and online casinos; now that PartyGaming and bwin are combining forces in a powerful merger, it will create a new industry giant. Together, they will form the largest listed online gaming operation in the entire world. The new venture would be incorporated in Gibraltar and listed on the London Stock Exchange with a joint net worth of around €3.4 billion (approximately US$4 billion).

The massive, new brand will be owned 48.36% by PartyGaming shareholders and 51.64% by bwin shareholders. The respective CEOs, PartyGaming's Jim Ryan Ryan and Bwin founder Norbert Teufelberger, will both become co-CEOs with the board of directors consisting of a 50/50 split between the two companies.

Ryan said, "With market-leading positions in poker, sports betting, casino and games (in particular bingo), the enlarged group will have a winning formula to exploit the growing online gaming market." He continued, saying, "This is a transformational opportunity for both our companies to create the world's largest listed online gaming business. With market-leading positions in poker, sports betting, casino and games (in particular bingo), the Enlarged Group will have a winning formula to exploit the growing online gaming market, supported by a strong balance sheet, significant cashflow generation and a highly experienced management team."

Teufelberger added, "This merger of equals makes great strategic, operational and financial sense. We will be in pole position to capitalise on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry."

The companies have a combined gaming revenue of €682m (£571m), and expect cost savings of €55m after the merger.

This could very well lead to PartyGaming returning to the U.S. market, having left four years ago in the wake anti-gambling legislation and seeing their shares plunge so low PartyGaming was forced out of the FTSE 100. However, with new legislation in the works in the U.S. that would regulate and tax online gambling, it seems safe to say that a return to American players is just what PartyGaming is shooting for.

The merger is expected to be completed in the first quarter of 2011 and its announcement was received well on the financial market, greatly affecting their respective value: bwin shares ended the day up 17.88% while PartyGaming rose by an incredible 20.43%.

How does this affect the average online gambler? It remains to be seen, but it is speculated that a giant online gaming company like the merger between PartyGaming and bwin is likely to be, will bring with it even bigger jackpots, bonuses and promotions than is currently seen in the industry.

Tags: PartyGaming, Bwin