European investment banks led by Dresdner Kleinwort and HSBC have earned fees of €32m ($41m) bringing internet gaming companies to market since 2000.

The value of those companies collapsed by as much as 60% last week after the US Congress passed legislation which effectively shuts the lucrative US market to online gaming. According to data providers Thomson Financial and Freeman, Dresdner Kleinwort was paid €13.7m by PartyGaming for its work on the company's flotation in June last year, which raised €1.3bn. The bank was also paid €0.73m for its part in taking Sportingbet to market in 2001. HSBC earned a €3.9m fee from 888 Holdings' €205m initial public offering in September last year. Other banks participating in recent floats of internet gaming companies include Calyon, ING and Commerzbank. Austrian bank Erste Bank earned €1.1m when it advised BetandWin on its March 2000 flotation on the Vienna Stock Exchange. The sector is in turmoil in the wake of the US legislation but bankers say its prospects for growth remain strong. Companies like PartyGaming and 888 generate large free cashflows and are showing growth in non-US markets. Announcing its interim results last month, PartyGaming reported 50% growth in revenues and a 47% jump in earnings before interest, tax, depreciation and amortisation and before flotation and share option-related charges. Non-US revenues were up 151% to $149.8m (€119m). Banks could earn further fees as online gaming companies look to refocus their strategies to Europe and Asia. Although equity issues are out of the question, smaller companies may need to restructure their debt while the need for player liquidity could drive consolidation.