Sniper
11-03-2005, 09:37 PM
LONDON (Reuters) - Britain's Gala is set to move its Coral Eurobet online poker operations away from the software platform of PartyGaming (PRTY.L: Quote, Profile, Research) in a move that would hurt other Web sites using the platform, such as Empire Online (EOL.L: Quote, Profile, Research), industry sources said.
Since October, PartyGaming has operated two software platforms -- one for players on its own PartyPoker Web site, and another for partners such as Coral Eurobet and Empire, known as "skins," which use PartyGaming's software to power their own poker rooms.
Players on PartyGaming's skin Web sites can play against each other, and the skins have always relied on each other for liquidity. The loss of a larger skin like Coral Eurobet would hurt the other three by reducing their liquidity.
Gala declined to comment on the move, as did PartyGaming.
But PartyGaming Director of Corporate Communications John Shepherd said: "In the first half, the skins, of which there are four, contributed less than 4 percent of PartyGaming's poker revenues."
"Our relationship with the skins has always been clear," he added. "If it makes strategic sense for either business, contracts can be terminated and we can part."
Analyst Greg Feehely at Altium Securities said Gala leaving would be bad news for Empire, which said on Thursday it had received a bid approach from PartyGaming.
"It's a very realistic possibility that Gala would want to take control just as PartyGaming did," he said. "It's a further unwelcome move for Empire, but the company's continued independence looks unlikely anyway."
PartyGaming's shares were unchanged at 93 pence by 1424 GMT, while Empire Online was down 1.7 percent at 113 pence.
Since October, PartyGaming has operated two software platforms -- one for players on its own PartyPoker Web site, and another for partners such as Coral Eurobet and Empire, known as "skins," which use PartyGaming's software to power their own poker rooms.
Players on PartyGaming's skin Web sites can play against each other, and the skins have always relied on each other for liquidity. The loss of a larger skin like Coral Eurobet would hurt the other three by reducing their liquidity.
Gala declined to comment on the move, as did PartyGaming.
But PartyGaming Director of Corporate Communications John Shepherd said: "In the first half, the skins, of which there are four, contributed less than 4 percent of PartyGaming's poker revenues."
"Our relationship with the skins has always been clear," he added. "If it makes strategic sense for either business, contracts can be terminated and we can part."
Analyst Greg Feehely at Altium Securities said Gala leaving would be bad news for Empire, which said on Thursday it had received a bid approach from PartyGaming.
"It's a very realistic possibility that Gala would want to take control just as PartyGaming did," he said. "It's a further unwelcome move for Empire, but the company's continued independence looks unlikely anyway."
PartyGaming's shares were unchanged at 93 pence by 1424 GMT, while Empire Online was down 1.7 percent at 113 pence.