PURPLE LOUNGE POKER TURNED DOWN GBP 15 MILLION ACQUISITION OFFER
Scots owner's plan to open large online casino soon
The Sunday Herald carried an interesting story this weekend that revealed more detail on the people and planning behind established poker site Purple Lounge.com.
The story included revelations that the West Scotland-based owner Chris Gorman is a regular Texas Hold 'Em player, has recently turned down a GBP 15 million acquisition offer for half of Purple Lounge and that his company plans a major online casino operation in the near future.
Gorman's Purple Lounge has managed to avoid the UIGEA fallout by solely targeting Europe's high-level card players, the newspaper claims, quoting Gorman: "I'm certainly happy we've not done business in the US. I still want to travel there. I don't want to get off a plane in an American airport and suddenly get arrested."
After just one year in business, the owners of London-based Purple Lounge have turned down a GBP 15 million offer from a rival casino and poker company that Gorman did not name. The deal was to buy half of Purple Lounge, with the other 50 percent remaining with the existing shareholders. It would have made a tidy profit for chairman Gorman, who owns a 20 percent stake, along with founding CEO Matt Larter and their silent partners.
"I had no faith in that company going forward," Gorman explains. "We're still in discussions with other people. Everything is always for sale at the right price. But I don't think we'll do a deal at the moment. We're growing so fast now. We will maximise that value next year and look at selling it towards the end of next year."
In February, Purple Lounge will launch an online casino arm with more than 300 games. That business will add to its burgeoning poker room, where players wagered $90 million (GBP 46 million) last month, expected to rise to more than $100 million this month. In December, the company will bring in $1million in revenues from its rake on players' bets and $250 000 profit. In the first financial year to April 2007, it expects to generate a $2 million profit.
Gorman claims that Purple Lounge is now one of the top three operators in the Microgaming Poker Network. Microgaming software runs the world's largest poker network in te rms of sites, with over 50 poker rooms.
Gorman, who made his fortune from selling retail mobile phone business DX Communications to BT Cellnet for GBP42 million, says Purple Lounge's success has come from focusing on a niche. The company has sought to differentiate itself by targeting high-value, serious players.
"Most of our poker players are in their 20s and play professionally," says Gorman. "We've taken the offline model where the big casinos know who the big players are and target them with special services and incentives. We do the same thing, but do it online."
Incentives could involve offering tickets to the World Cup or to the Casino Royale premiere. Gorman has also leveraged his connections at the luxury concierge service Quintessentially, where he is a non-executive director and 5 percent shareholder.
Frequent Purple Lounge players are offered Quintessentially memberships, a service that aims to satisfy last-minute requests - from front-row seats at fashion shows to spur-of-the-moment chartered yachts. The London company's 30 000-strong membership also receives privileges at gyms, spas, hotels, restaurants and nightclubs.
At the moment, between 60 and 70 percent of Purple Lounge players are Scandinavian. But the company is building up its customer base in the UK and Spain.
Gorman has been keeping a relatively low profile in his Purple Lounge role, and with his other recent investments. During the last 18 months, he has invested a "seven-figure" total and taken non-executive directorships in a portfolio of technology-related companies. "I love technology. I understand it. I've got great connections in the industry and I know how to make money from it," he says.
Some observers might surmise that Gorman has become more media shy following the messy court drama involving former partners that enfolded out of the failure of the Gadget Shop retail chain. In the end, Gorman and fellow entrepreneur Tom Hunter won the case.
Scots owner's plan to open large online casino soon
The Sunday Herald carried an interesting story this weekend that revealed more detail on the people and planning behind established poker site Purple Lounge.com.
The story included revelations that the West Scotland-based owner Chris Gorman is a regular Texas Hold 'Em player, has recently turned down a GBP 15 million acquisition offer for half of Purple Lounge and that his company plans a major online casino operation in the near future.
Gorman's Purple Lounge has managed to avoid the UIGEA fallout by solely targeting Europe's high-level card players, the newspaper claims, quoting Gorman: "I'm certainly happy we've not done business in the US. I still want to travel there. I don't want to get off a plane in an American airport and suddenly get arrested."
After just one year in business, the owners of London-based Purple Lounge have turned down a GBP 15 million offer from a rival casino and poker company that Gorman did not name. The deal was to buy half of Purple Lounge, with the other 50 percent remaining with the existing shareholders. It would have made a tidy profit for chairman Gorman, who owns a 20 percent stake, along with founding CEO Matt Larter and their silent partners.
"I had no faith in that company going forward," Gorman explains. "We're still in discussions with other people. Everything is always for sale at the right price. But I don't think we'll do a deal at the moment. We're growing so fast now. We will maximise that value next year and look at selling it towards the end of next year."
In February, Purple Lounge will launch an online casino arm with more than 300 games. That business will add to its burgeoning poker room, where players wagered $90 million (GBP 46 million) last month, expected to rise to more than $100 million this month. In December, the company will bring in $1million in revenues from its rake on players' bets and $250 000 profit. In the first financial year to April 2007, it expects to generate a $2 million profit.
Gorman claims that Purple Lounge is now one of the top three operators in the Microgaming Poker Network. Microgaming software runs the world's largest poker network in te rms of sites, with over 50 poker rooms.
Gorman, who made his fortune from selling retail mobile phone business DX Communications to BT Cellnet for GBP42 million, says Purple Lounge's success has come from focusing on a niche. The company has sought to differentiate itself by targeting high-value, serious players.
"Most of our poker players are in their 20s and play professionally," says Gorman. "We've taken the offline model where the big casinos know who the big players are and target them with special services and incentives. We do the same thing, but do it online."
Incentives could involve offering tickets to the World Cup or to the Casino Royale premiere. Gorman has also leveraged his connections at the luxury concierge service Quintessentially, where he is a non-executive director and 5 percent shareholder.
Frequent Purple Lounge players are offered Quintessentially memberships, a service that aims to satisfy last-minute requests - from front-row seats at fashion shows to spur-of-the-moment chartered yachts. The London company's 30 000-strong membership also receives privileges at gyms, spas, hotels, restaurants and nightclubs.
At the moment, between 60 and 70 percent of Purple Lounge players are Scandinavian. But the company is building up its customer base in the UK and Spain.
Gorman has been keeping a relatively low profile in his Purple Lounge role, and with his other recent investments. During the last 18 months, he has invested a "seven-figure" total and taken non-executive directorships in a portfolio of technology-related companies. "I love technology. I understand it. I've got great connections in the industry and I know how to make money from it," he says.
Some observers might surmise that Gorman has become more media shy following the messy court drama involving former partners that enfolded out of the failure of the Gadget Shop retail chain. In the end, Gorman and fellow entrepreneur Tom Hunter won the case.
