Empire Online says profit will be 10% lower than City forecasts - Wednesday 19th of October 2005

The fledgling online poker industry was hit by yet another warning yesterday as Empire Online admitted that profits for this year will fall 10% below the Citys forecasts after it was jilted by partner Party Gaming. The news saw shares in Empire drop 5% while shares in other online poker groups including PartyGaming and Sportingbet, which owns Paradise Poker, were also marked lower.

Last week market leader Party Gaming, owner of Party Poker, announced plans to move its players on to a dedicated Party Poker platform, effectively ending the slice of the action that companies such as Empire Online currently enjoy.

Empire Online and others such as Coral Eurobet, Multipoker and Intertops, are known as skins, marketing companies that as well as operating their own platforms attract gamblers and drive them on to other sites for a commission.

PartyGaming hopes players will sign up directly with its new platform, therefore reducing the commissions it pays.

Empire said yesterday that since the PartyGaming announcement it has experienced a slowdown in rake generated by EmpirePoker.com. As a result Empire Online said it expects net profit for the year to end December to be approximately 10% lower. Analysts had been looking for profits of just under £35m for this year.

In a note on the stock, brokerage firm Williams de Broe said "The impact of PartyGamings aggressive move to segregate out its skin business has had an immediate detrimental impact on Empire Onlines business."

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