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.