PartyGaming and CryptoLogic | IXGAMES

CryptoLogic software developer – is in talks with PartyGaming to pool their poker businesses to save costs as both companies fight to maintain their positions in the the online gambling industry. After William Hill announced that it was abandoning CryptoLogic as its software provider of poker and casino for rival Playtech, Dublin-based CryptoLogic sought to soften the blow by announcing a review of strategy. It said it had entered into a five-year licensing agreement with PartyGaming to provide casino games on its platforms, such as Marvel’s – The Fantastic Four – Hulk and Spider-Man. But it would also enter into a poker partnership with a large poker network *to increase liquidity while reducing expenses substantially*. This is understood to involve PartyGaming. Party Gaming has seen its market share of online poker fall from 40 per cent to about 8.5 per cent in the past two years having exited the lucrative US market following a regulatory clampdown. CryptoLogic said it aimed 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. It would continue developing its business and recent investments in Asia for long-term growth. 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*. The deal is CryptoLogic’s ninth licensing agreement of 2008 and the company said it had *a healthy pipeline of pending opportunities*. (CryptoLogic shares rose 0.05p to 2.15p. PartyGaming closed up 1p at 123p) CryptoLogic management will provide full details about the company’s strategy and 2009 outlook on the occasion of the company’s Q3 earnings announcement in mid-November.