Empire Online revealed to have no customers

mary

Dormant account
Many online companies are structured in such a way that they are really just marketing firms. Angelciti, for example, does not own or develop its own software--but you'd never know that from the press releases.

September 21, 2005

Sportingbet ends talks to buy Empire amid customer fears
By Tom Bawden



SPORTINGBET, the online gambling operator, has ended discussions to buy Empire Online for 790 million amid concern in the City that the targeted company does not actually have any customers.
Sportingbet failed to deny speculation that the poker websites Empire Online runs under the aegis of PartyGaming and 888 Holdings meant it was essentially a marketing team without a customer base.

Fears that Empire Online could be much less valuable than previously thought after the emergence of the customer issue sent the companys shares plunging 20 per cent.

Paul Leyland, an analyst at Seymour Pierce, said: All that was being offered for 800 million was about 16 personnel and a marketing war with Party and Cassava (now known as 888). Empire offers an excellent marketing team, but it does not control its own customers.

An analyst at Daniel Stewart & Co, the UK broker, said that the lack of customers meant that Sportingbet would have been buying a revenue stream that was largely controlled by other gambling companies.

One of Empires main lines of revenue is empirepoker.com, a website that is technically a subsidiary of PartyGaming. PartyGaming actually runs the website for Empire, which does not have a gaming platform. It takes a percentage of the poker pot known as a rake and typically between 1 per cent and 5 per cent of the amount wagered passing a portion of this on to Empire.

Although ownership of the customers is a grey area, analysts agree that they belong more to PartyGaming and 888 than to Empire. At the same time, because PartyGaming holds all the customer information relating to the empirepoker.com website, any potential purchaser of the operation would probably need to talk to both companies.

Analysts expect PartyGaming itself eventually to buy Empire Online, for a much lower price than Sportingbet was considering. PartyGaming would not comment on the potential acquisition yesterday.

Sportingbet said: On September 5, the board of Sportingbet confirmed that it was in discussions with Empire which might or might not have led to an offer and that discussions were at a very preliminary stage. Sportingbet can now confirm that, by mutual agreement, it has ceased discussions with Empire in respect of the potential offer.

Sportingbets shares fell 17p to 326.5p, while Empire stock lost 52p to close at 202p.
 
Has Party cleaned up it's act?

I have to say, this doesn't make Sportingbet's management look too swift. "Empire is a Party Skin" can hardly be news.
 
Party is supposed to be cleaning up their act as we speak. I am waiting for an announcement to that effect, as I was promised in Vegas.

Unfortunately I did not get to speak with one of the key people I was hoping to speak to. But I did speak to the person in charge of designing the new affiliate program.

Party will come out with an entirely new program combining all the different properties and the T&Cs are supposed to be fixed in the new program.
 
Mary is raising a fascinating point. I find it astounding that news leaked (and was then accepted by Sporingbet no less!) that they went into talks on such shacky grounds.
In almost any company this alone would be grounds for dismissal.

The whole issue regarding the poker skin vs players situation is complicated but even novices understand basic facts.
btw thanks dominique for raising the whole Sportingbet situation. A while back I had quite a few registrations for them on a side site but no income stream ever materialised. This attitude apocalypse might explain why.
Cheers.
 

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