Cryptologic and PartyGaming consider partnership
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There are more strategic moves in the online poker industry than in a game of chess at the moment! After the announcement that William Hill had joined forces with online poker giant Playtech, many industry insiders wondered what the future would bring for cryptologic.
A report in the FT today revealed the news that there may be an alliance with PartyGaming in the coming months. The two companies PartyGaming, owner of PartyPoker and Cryptologic are talking about pooling their poker businesses to save costs, as both companies fight to maintain their positions in the online gambling industry.
Gibraltar-based PartyGaming's online poker market share has fallen from 40 per cent to roughly 8.5 per cent in the past two years after it exited the large and lucrative US market following October 2006 passage of the Unlawful Internet Gaming Enforcement Act (UIGEA).
CryptoLogic's self-proclaimed goal is to reduce annual operating expenses by $12m-$15m, and would build its new strategy around casino licensing, its most profitable business, offering its leading games to other gaming operators and developing branded content. Cryptologic already announced a five-year licensing agreement of casino games to PartyGaming yesterday, as well as an earlier announcement to provide casino games to 888.com (Pacific Poker owner).
In their strategy announcement yesterday, Cryptologic also said it "will continue to develop its business and manage its recent investments and new relationships in China, Korea and Singapore to achieve long-term growth" as evidenced by the May 2008 agreement to supply India-based Khel Galli, one of South Asia's fast growing online gaming companies, with online poker and casino offerings (click here for related article).
Jim Ryan, PartyGaming chief executive, said CryptoLogic content would enhance its market-leading position. Brian Hadfield, his counterpart at CryptoLogic, said PartyGaming was one of its biggest customer deals "and an endorsement of the branded games element of our new strategy".
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