The largest London-listed online gaming company PartyGaming, based in Gibraltar, has confirmed in the end of December the purchase of gambling web sites from Empire Online Ltd. The BVI-based Empire Online, the owner of gaming brands such as Noble Poker, stated separately that it will receive about $38 million from the sale. The company spokesman has said that the discussions on sale of company’s gaming business and assets are to be continued. Empire has received an offer about a takeover from the poker operator in November 2005.
Before the companies became legal adversaries in a case that was later settled, PartyGaming was Empire’s main customer, incorporated in the British Virgin Islands. PartyGaming is the world’s biggest Internet poker company, which will fund the acquisitions by issuing 115.2 million new shares. It was stated by the company that the purchases probably will increase earnings next year.
Web gambling operators including PartyGaming have stopped taking bets from the US, after the country’s Senate passed the Internet Gambling Enforcement Act at the end of September, that made it criminal to process credit-card payments for the industry, and actually caused an online gambling crisis. This law actually separated companies, including PartyGaming and Empire, from their main revenue sources. Now PartyGaming, as well as other Internet gambling operators, is trying to compensate lost sales following the enactment of this legislation. US gamblers accounted for about 85% of sales in 2005 at PartyGaming and about 65% of Empire’s sales, when the company stopped accepting wagers from American gamblers.
The Empire purchase, which must be approved by the company’s shareholders, will add three casino Web sites as well as Noble Poker. PartyGaming expects the acquisition to contribute earnings before interest, taxes, depreciation and amortization of at least $6 million next year.
After selling its gambling business, the BVI company is planning to use its cash reserves to become an investment company.