Ending months of contention and legal imbroglio, PartyGaming has agreed to acquire Empire Online's once flagship online poker site, Empire Poker, for $250 million. Until October, 2005, Empire Poker operated as a white label version of PartyGaming's online poker room, Party Poker. Accordingly, players who signed up to play at Empire Poker would essentially be playing on Party Poker's gaming platform, and as a part of its nine-million-strong player base. In exchange for attracting additional players to the Party Poker platform, Empire Online earned a substantial chunk of the rake generated by Empire Poker players.

The relationship between Empire Online and PartyGaming took a dive in October, when PartyGaming announced that it would no longer allow skins (i.e., white label sites) to access its central platform and player pool. Seeing as Empire Poker existed and thrived off of Party Poker's spoils, the move rendered it a fish out of water. While Empire Poker had previously been Empire Online's premier product, after getting shut out by Party Poker, Empire shifted focus onto newer acquisitions, namely online gaming sites Noble Poker and Club Dice Casino.

Soon thereafter, PartyGaming attempted to acquire Empire Online in its entirety. After acquisition talks fell through, Empire Online moved to take legal action against its former business partner for breach of contract. Initially, PartyGaming dismissed the severity of such legal action, claiming that it would emerge victorious. The company changed its tune, however, after a judge reportedly advised opting for an out-of-court settlement, citing the strength of Empire Online's claim. PartyGaming thus changed its legal strategy, going instead for the “if you can't beat 'em, buy 'em" approach.

Upon culminating the transaction, which is pending approval by Empire Online shareholders, PartyGaming will hand over $250 million to Empire Online for its namesake Empire Poker site. The sum is expected to be divided among Empire shareholders, although no further details are available regarding the dividend at this time.

The transaction marks an end of an era for online poker giant PartyGaming, bringing its “skins strategy to a close" to make way for “the launch of the fully-integrated, Party-branded platform," according to a PartyGaming press release. As such, the company is getting ready to release an integrated online poker/casino platform that promises to revolutionize the online poker market.

Commenting on the deal, Empire Online CEO Noam Lanir said, “This transaction removes the uncertainty of litigation between Empire Online and PartyGaming. It puts the Company on a stronger footing and will enable management to focus on growing its continuing businesses. We will consider carefully how to use the net proceeds from this sale to the maximum benefit of shareholders."

Source:  Poker777 Staff

Wednesday, 15 February 2006