Shares in Partygaming, owner of the Partypoker website, have closed 11% up at 129p on their first day of conditional trading.
Online betting is legal in many countries
The firm's offer price of 116p valued it at £4.64bn ($8.46bn), the biggest UK debut in five years. The shares make their formal trading debut on 30 June.
The float has been controversial given claims that online betting is banned in the US, home to many Partygaming users.
The Gibraltar-based firm was set up in 1997 and had profits of £371m in 2004.
During the first three months of 2005 earnings growth has continued and sales almost doubled from the same period a year earlier.
Values of major FTSE 100 firms
J Sainsbury £4.89bn
Old Mutual £4.68bn
British Land £4.59bn
Hilton Group £4.50bn
Tate & Lyle £2.28bn
William Hill £2.11bn
Source: Thomson Financial
*Based on offer price of 116p
The company said the money raised in the flotation would be used to fund acquisitions, develop new products and expand its business into new countries.
Founders Anurag Dikshit, husband and wife Ruth Parasol and Russ DeLeon, and Vikrant Bhargava, are in line for windfalls which could reach £1bn.
They will keep share stakes worth more than £3bn.
Euan Stirling, investment director of Standard Life, told the BBC that the 116p price - towards the lower end of the expected range of 115-120p - meant the firm "was looking to encourage a positive aftermarket" in the shares once trading began.
The risks surrounding Partygaming are hard to price in
But he pointed out that the company is in an unusual situation, facing risks which were difficult to price.
"If the regulatory or legal situation changes, the taps can effectively be turned off for Partygaming (in the US)," he said. "So the fast growth investors are looking for could disappear in smoke."
The company also faced criticism from organisations concerned about the 24-hour availability of online gambling, which encourages users to chase losses.
"The Salvation Army is deeply concerned by the explosion of internet gambling sites such as Party Poker, Jonathan Lomax of The Salvation Army, a UK charity, which does a lot of work with the homeless, said.
"Online gambling is potentially very addictive and can ruin people's lives. Following the passing of the Gambling Act internet gambling sites will be able to register in the UK.
"They (Partygaming) should commit to doing that, submit themselves to regulation and taxation, and prove that they care about some of the vulnerable people who end up addicted to gambling."