Will Party Poker Return to the US Market?

by Lou on December 28, 2006

The season between Christmas and New Years is traditionally a slow one where news is concerned, except for Party Gaming. They’re the ones making all the news this week, and they’re even the source of a major rumor.

Party Acquires Empire’s Assets
PartyGaming is set to acquire Empire’s assets in a deal to be announced shortly. The acquisition values Empire’s gaming assets at between thirty- and forty-million also provides an out for Noam Lanir, Empire’s founder and CEO.

Lanir has been looking to get out of the online gaming business for some time now, and this deal provides him the means to do so.

Party’s Revenues on the Upswing
PartyGaming appears to be recovering from the Unlawful Internet Gambling Enforcement Act’s (UIGEA) impact, as Party sources say they are beginning “…to see improvements in a number of its key performance indicators.”
Their daily poker revenue is averaging $721,000, up from a low of $637,000 immediately after enactment of UIGEA, which led to a radical restructuring of the company and 945 jobs lost in the process.

Party’s marketing direction changed dramatically since enactment of UIGEA, with comprising 80 percent of total new sign ups and 67 percent of gross daily revenue coming from Europe. Prior to UIGEA, Party’s revenue stream and player base was heavily American.

Is Party Planning a Return to the American Market?
That’s the rumor of the day. “Unconfirmed reports” in the media have PartyGaming returning to the American market they exited after the October 13 passage of UIGEA. PartyGaming and other publicly traded gaming stocks suffered huge price drops immediately after the law’s passage and hurriedly left the US market, which was their main source of business. Many private companies have continued to offer online poker and casino gambling to the US market and have seen their business grow sharply in the period following UIGEA’s passage.

Will Party conclude that they left the US market too soon? Will they seek to return to the United States and try to recapture their once formidable player base? After all, the majority of new acquisitions since October 13 by privately held US facing online poker operators are probably former Party customers. If they do return to the US market, just how many players will drop their new associations and come back to Party? Some will. But others won’t.

I won’t even venture a guess. Actually, I don’t know whether Party plans another about face and a run at the US market. It’s just a rumor at this point, and no one is confirming anthing. Only time will tell.

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