CryptoLogic And PartyGaming May Join Forces

Published on: October 22, 2008 

Leading gaming software developed CryptoLogic Limited announced that they are currently in discussion with ‘another major poker network’, namely, PartyGaming.  According to Financial Times, the two companies are discussing pooling their poker businesses together to help save costs during this time of economic crisis.  Both companies – PartyGaming is the parent company of PartyPoker – are trying very hard to keep their high ranking positions in the online gaming industry.

CryptoLogic, the Dublin Ireland-based company, heard from WPT Enterprises that they were closing their real money online poker site on November 14, 2008.  CryptoLogic already lost the William Hill license to Playtech, and if they want to keep from being financially crippled any further they need to make a new partnership.  PartyGaming is the company they have decided to approach to soften the blow of WPT closing and losing the William Hill account.

PartyGaming’s online market share has fallen to 8.5 percent from 40 percent over the last two years.  They can thank the passage of the UIGEA in October 2006 for the loss, the company losing one of its most lucrative markets in the United States when they closed their doors to all players from the country.

CryptoLogic is attempting to reduce their annual operating costs by $12 to $15 million, and by pooling their resources with PartyGaming they would be able to start working on their new strategy of casino licensing and offering their leading games to other operators in addition to developing branded content.  The new deal with PartyGaming is a five-year licensing agreement on casino games with the company in addition to providing, the parent company of Pacific Poker, with casino games, as based on an agreement that was announced earlier in the week.

They also plan on continuing their development of business and management of recent investments and established relationships in China, Korea, and Singapore.  They are already supplying India based Khel Galli with casino games, and it is one of South Asia’s fastest growing online gaming companies with both casino and poker games being offered to their players.   

PartyGaming’s chief executive officer, Jim Ryan, feels that the deal with CryptoLogic and the new content they will be providing will help enhance their own market leading position.  Brian Hadfield, the chief executive officer at CrytpoLogic agreed, stating that PartyGaming was ‘an endorsement of the branded games element of our new strategy’.  CryptoLogic is planning a release of the 2009 outlook when they release their third quarter earnings in November.

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