[thuja]

The big picture here is that Party Gaming is trying to take care of the Empire "problem". We (Empire's core customers) are just pawn's in the big picture.

Party gaming was evasive about its business relationship with Empire. In Party Gaming's 200 page IPO prospectus, Empire online isn't even mentioned even though the propectus dwells in great detail on a dozen other potential risks the company may face. The fact that Party Gaming was mute about its business relationship and obligations to Empire in the prospectus was enough to make me pass on purchasing Party Gaming shares.

The nature of Party Gaming's business relationship with Empire online became an issue with the investment community about a month ago when Party Gamings big competitor Sportsbetting PLC made a 780 million britsh pound takeover offer for Empire. The takeover soon fell apart when Sportsbetting realized how fragile Empire's position was with Party Gaming. Empire has an office staff of 16 and the server, cashier, website, & customer service are all done by Party Gaming. Sportsbetting was hoping to get all of Empire's customers to switch over to its Paradise Poker website. I'm sure they were also scared that Party Gaming would also try to lure Empire's customers back. Sportsbetting cancelled the takeover bid.

From a common sense perspective Party Gaming is the logical business partner for Empire. From a business perspective Sportsbettings aborted takeover of Empire was very bad for Party Gaming. First because it highlighted to the investment community the serious issues Party had with its skins. Secondly it was very bad because the price Sportsbeting offered for Empire was huge. If Party Gaming was to purchase Empire, Empire would want a simliar price.

Now this is where Party Gaming got down and dirty. On Saturday October 8, the had their shutdown and separated the skins. No one was told about this not even Empire. Party Gaming issued a press release on Saturday and said that they were upgrading the system, and that they where adding casino games (but not until 2006) and as a technical consequence, the skins had to be separated immediately.

OK now, name me one single public company that has issued a press release on a Saturday.

Co-incidentially, Empire had it's quarterly earings report scheduled for release to the market on Monday October 10. With the stock market focused on Empire, and the fact the Party Gaming had just cut it loose, Empire's stock was down 33%.

Also Party Gaming, reached out to the rakeback people and tried to put together deals to steal Empire's customers away over the weekend.

So, it doesn't take much to see that Party Gaming has put a gun to Empire's head. I'm certain Party Gaming's CEO is saying to Empire onlines CEO right now that Empire has 3 choices:
1) The can sell out to Party at Party's lowball price
2) or they can renegotiate the terms of their operating agreement such that Party gets the majority of Empire's revenues
3) or Party Gaming will win all of Empire Gaming's customers back through an aggresive and competitive rakeback program

As you can see, the big picture is all about Party Gaming's relationship with Empire. We, (Empire's customer's) are just the collateral damage in the fight.

Make no mistake the online pro's are very highly prized customers coverted not only by Party and Empire, but also the 100's of other online sites. Any poker website would kill to have the skins players as there own customers. This is illustrated by the 780 million british pounds Sportsbetting offer for Empire. If we are such suboptimal customers, why make such an offer?

I think that there is strenghth in numbers. We should seek out the best rakeback situation, the marketplace will offer us as a group. Think of it this was: Sportsbetting was willing to pay 780 million british pounds for the right to have us as it's customers. Why would they (or anyone else) not want to lure us away from Empire with a better rakeback deal, and save them the 780 million british pounds aquisition cost?