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Party Gaming Forces Separation from Skin Companies
16
October 2005
Last week it was reported by one of UK’s
news sources – UK Guardian – that market leader, Party
Gaming, has forced separation from the companies that
provided them with their marketing skills. Known as
“skin” companies, this group has really helped Party
Gaming boost their growth. The news of this separation
came as a big surprise, and has caused many investors in
Party Gaming to feel nervous.
The UK Guardian reported that Party Gaming’s decision to
cut the ties to their long-term partnership with the
“White-label” operators will be perceived, by the online
gambling industry, as the beginning of a strong
competition among various internet poker sties. Until
this divorce, the vast majority of sites have spent
their energy focusing on recruiting online gambling new
comers, now, however, it is speculated that many of
these sites will start to compete for players who are
more established.
Party Gaming’s decision to suddenly separate from the
skin companies has caused other online gambling sites,
with shares in the market, to suffer repercussions from
their choice. For instance, Empire Online, the online
casino company that potentially had the most to lose,
actually saw their shares fall to 34 percent. This was a
huge downfall, especially considering only a month ago,
Empire Online had received a takeover approach from the
popular online sportsbook, Sportingbet. At the time,
Empire Online was valued at more than 800 million
pounds, compared to its now worth of only £350 million.
With their decision, Party Gaming also ended up losing
over 11 percent, which caused them to hit an all new low
of 71 percent, which is almost 40 percent below their
original flotation price listed in June 2005.
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