* Founders' gamble pays off, collect 35.5 million sterling
* Shares rise almost 19 percent
(Updates shares)
By Kylie MacLellan
LONDON, Oct 22 (Reuters) - The owners of Betfair will bank at least 211 million pounds ($333 million) from an initial public offering (IPO) that valued the world's largest internet betting exchange at 1.39 billion pounds on Friday.
One-time professional gambler Andrew Black, who founded the company 10 years ago with former JP Morgan trader Edward Wray, is in line for 18.9 million pounds if an overallotment option is exercised in full, while Wray will get up to 16.6 million.
Shares in Betfair, whose offer comes at a time of resurgence in public offerings as European equity markets trade around six-month highs, were quoted at 1,542 pence at midday, a premium of close to 19 percent on the IPO price.
The shares will officially begin trading on Oct. 27, but are already conditionally being traded.
The share performance also implies a hefty paper profit for Black and Wray, who respectively retain 10.2 percent and 10.7 percent stakes, if the overallotment is exercised, according to the pricing document.
Betfair's platform allows customers to place bets as a punter or take bets in the role traditionally played by a bookmaker. It matches millions of bets a day on a variety of sports and other events.
RIVALS PAIR UP
It is likely to face competition from the merger of Austrian internet bookmaker bwin with PartyGaming, which is set to create the world's biggest listed Internet gambling company worth $3.3 billion.
Betfair said it had priced the offer at 1,300 pence per share, in the top half of its initial guidance of 1,100-1,400 pence.
A source close to the deal said it had been heavily oversubscribed, prompting a narrowing in price guidance to 1,250-1,300 pence early on Thursday.
There was good demand from investors with a technology focus in Britain and the United States, the source added, with interest also from continental Europe.
The book, which had more than 200 accounts, was a mixture of technology specialists, mutual funds and hedge funds.
A 78.3 million euro ($109 million) IPO by Czech betting group Fortuna on Friday also received strong demand. Shares in the company, whose offering was nearly twice oversubscribed, rose more than 5 percent in grey market trading.
Betfair's owners sold 16.2 million shares, or 15.2 percent of the company, in the offering, prior to an overallotment option of 10.8 percent.
Stock held by the company's larger shareholders will be subject to a lock-up arrangement of 180 days, while directors and senior managers will not be able to sell or offer their shares for a year after the listing.
If the overallotment option is exercised in full, 65 percent of Betfair's shares will be subject to lock-up arrangements, the company said.
Goldman Sachs and Morgan Stanley, ranked first and second respectively in the global equity deals league table according to Thomson Reuters data, were joint bookrunners on Betfair's offering. Barclays Capital and Numis were co-lead managers. ($1 = 0.6333 pound) ($1=.7181 Euro) (Additional reporting by Chris Vellacott; Editing by Sinead Cruise, Dan Lalor and David Hulmes)