Liberty Media, the US media group chaired by John Malone, is to make its first foray in the fast-growing UK online gaming market with the purchase of a 51 per cent stake in Fun Technologies for $195m.

Fun, which is listed in Toronto and on Aim in London, specialises in online versions of skill games such as solitaire, chess and sudoku. While the legality of sports and casino internet betting is unclear in the US, Fun’s portfolio of skill-based games means it can operate there without fear of legal action.

Skill game operators have yet to generate the returns of online poker or internet groups such as PartyGaming and 888. However, skill games have a similar growth pattern to internet poker, with the number of players rising at 30 per cent per quarter.

Liberty is buying 10.5m new Fun shares at 267p and is offering Fun shareholders 360p a share for another tranche of 23m shares that will lift its stake to 51 per cent.

Under the deal, Greg Maffei, Liberty’s new chief executive, will take a seat on the Fun board.

“Our customer profile is very different from other gaming sites,” said Lorne Abony, Fun’s chief executive, adding it provided online arcade games and games such as Scrabble.

Liberty’s move to acquire a gaming company reflects broader efforts by media companies to enter one of the fastest-growing sectors in the entertainment industry.

Last year, the global video games market rose 11 per cent to reach $25bn in revenues, according to PwC, and is expected to grow by more than 20 per cent in 2006 and 2007.

Big media companies such as Time Warner, News Corp, Viacom and Walt Disney have said they are eyeing acquisitions to increase their presence in the online
gaming sector.

Media companies want to reach heavy users of games, as they often spend less time consuming other media products such as television.

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