Empire Online reported a significant drop in net gaming revenues for the first half of 2006 compared to the same period last year due to a significant decrease in poker revenue.
Empire Online, which owns CD Poker and Noble Poker, reported revenues of $38.2 million for January through June 2006, down from $49.7 million last year. The loss in revenue is due to a drop of more than $20 million in poker revenue, down from $39 million in the first half of 2005 to $8 million in the same period in 2006. In the meantime, casino revenues rose from $10.7 million during the first half of 2005 to $30.2 million in 2006.
According to the company's press release, the drop in poker revenue is due to the loss of Empire Poker to PartyGaming, Plc. Originally Empire Poker was a "skin" where poker players signing up at the Empire Poker site were migrated to PartyGaming, Plc.'s gaming platforms.
When PartyGaming, Plc. launched a new operating platform last fall, separating players who signed-up via skins such as Empire Poker from those who signed-up directly with PartyPoker.com, Empire Online filed a lawsuit for breach of contract. The result was that PartyGaming, Plc. paid $250 million to Empire Online and took possession of the site.
The loss in revenue paired with the regulatory uncertainty of the online gaming industry has also resulted in Empire Online halting its expansion plans. All the company's planned mergers and acquisitions have been stopped for now.