It is understood that PartyGaming, the Gibraltar-based group that launched the PartyPoker website in 1997, will reveal that it has appointed Dresdner Kleinwort Wasserstein and Investec Securities to advise the company on its “strategic options”.

Despite the likelihood of a place in the FTSE 100, the big banks such as Merrill Lynch, UBS, Morgan Stanley and Deutsche Bank declined the opportunity to be involved, eschewing fees of an estimated £20 million.

The difficulty is that PartyGaming’s biggest market is America, where the legality of internet gambling remains in doubt.

Although poker, where players are pitched against each other rather than against the house, is less of a grey area, the big banks are still wary of upsetting regulators such as Eliot Spitzer, New York’s attorney-general.

The company, which recently changed its name from iGlobalmedia, is understood to favour an initial public offering (IPO) some time this year, although its advisers will also consider alternative ways of taking the company forward, including raising debt or seeking a merger partner.

Last summer PartyGaming appointed Richard Segal, the former Odeon Cinemas boss, as its chief executive and it recently hired Martin Weigold as finance director. Mr Weigold was previously chief financial officer at Jetix Europe, the children’s entertainment network formerly called Fox Kids Europe.

Last year the company reported earnings before interest, tax, depreciation and amortisation of about $350 million (£186 million). However its IPO valuation is likely to be based on projected 2005 earnings of as much as $600 million, implying a valuation of perhaps $5 billion to $6 billion.

Although the company refused to comment last night, Vikrant Bhargava, PartyGaming’s marketing director, recently told The Times: “If we were to float in London there is a good chance we would be a FTSE 100 company.”

An IPO would crystallise huge paper profits for the handful of private investors who control PartyGaming.

They include Ruth Parasol, a colourful Californian lawyer who made her first fortune a decade ago through pornographic websites, and Anurag Dikshit, a computer services graduate from India. Mr Bhargava is also a small shareholder.

PartyGaming also has casino and bingo websites, although more than three-quarters of its business is derived from online poker, the fastest growing part of the gambling industry.

PartyPoker accounts for more than 50 per cent of the global online poker market. Launched in 2001, it now claims that 12,000 people are playing its online games at any one time.

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