PartyGaming, BWIN in Merger Talks

LONDON (Reuters) - Online gaming firm PartyGaming (PRTY.L) is in merger talks with Austrian rival bwin Interactive Entertainment (BWIN.VI) in a deal that could create an internet gambling giant, according to the Sunday Times.

The report said the two sides have been holding on-off talks since the summer about combining to create a group worth 2 billion pounds ($3.30 billion).

PartyGaming is expected to be asked by the Britain's Takeover Panel to clarify the position before the market opens on Monday, the report added.

"We don't comment on rumor and speculation," a PartyGaming spokesman told Reuters on Sunday.

Bwin was not immediately available for comment.