Latest Results From Empire Online

Published: Tuesday, October 11, 2005 Online-Casinos.com

LATEST RESULTS FROM EMPIRE ONLINE

A more competitive stance in regard to Party Poker?

Noam Lanir's publicly listed company Empire Online this week appeared to confirm Party Gaming's pessimism regarding online poker growth by announcing that over the past three months the market had been flat.

"I don't think the market went up much in this period," Empire's Chief Executive Noam Lanir told Reuters after the firm reported a 24 percent increase in new players and revenues between its second and third quarters.

Despite the increases, Empire's shares fell 24 percent early in the week possibly due to signs of increased competition after PartyGaming said it was separating its own poker players from those directed to its site by partners such as Empire.

Empire recently bought several Playtech powered online casinos and Noble Poker, and it has started moving its customers across from the PartyGaming platform to Noble Poker's Playtech system.

This followed an announcement by Party Gaming earlier in the week that it had built new software platforms to provide an integrated multi-gaming site early in the new year and would now separate its own players from those entering via "skin sites" such as Empire Poker and Coral Eurobet.

PartyGaming's John Shepherd told Reuters. "But we're still supportive of our skins. We've improved their platform as well as our own."

Analysts thought otherwise. "Statements from PartyGaming and Empire Online contain the initial seeds of divorce," said Charles Wilson at Bridgewell Securities. "We believe the skins customers will be disadvantaged, as they will not have access to PartyGaming's player liquidity," he added. "Player liquidity is one of the key customer drivers."

Lanir said smart marketing had helped his group pull in more players than its rivals, while the launch of PartyGaming's new software platform showed it was concerned about Empire's success. "They're showing their concerns about our dramatic growth compared to them and the entire industry," said Lanir.

Empire Online said the number of new players reached 53,148 for the third quarter, an increase of 62 percent over the same period last year and 24 percent over the second quarter.

Net gaming revenues rose to $31.4 million, up 24 percent on the second quarter and 71 percent on the third quarter of 2004 with active player numbers up 37 percent.

PartyGaming's shares were down 7.5 percent, the biggest fall on the FTSE 100 index and industry observers were awaiting the results from Sportingbet's Paradise Poker.com, which is expected to report strong trading on Wednesday but fell 3.1 percent. Most industry experts predict the online poker sector will experience growth of around 60 percent this year, lagging behind last year's approximately 150 percent growth.