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Legal Confrontation Between Online Casino Giants Ensues

There are new developments in the Empire Online – Party Gaming saga. As you recall, Empire was one of the four online casino companies that used to share the same poker platform with Party Gaming’s users. At the beginning of October Party Gaming upgraded its registered members to a new online casino software platform, one that was not available to Empire users. The move has caused Empire to see its share price drop considerably from 183p to 121, and then to 86p. Following the split, Party Gaming negotiated the purchase of Empire. A week ago, negotiations between the two online casino companies broke down, after which Empire threatened to take legal actions against Party Gaming seeking damages.

Legal experts at Morgan Stanley, one of the largest investment banks in the US, are predicting that if Empire Online materializes its threat to sue online casino rival they might be looking at a 300 million pounds and upward verdict. The legal analysts explained the basis for making their assessment saying, “On a simplistic basis, we assume that the maximum potential liability is the market capitalization of Empire that was directly eroded as a result of the online casino platform split, plus reputation damage”. The analysts also added, “It is clear from Party Gaming statements that it is a risk that Party takes seriously, and we cannot rule out a material adverse effect from the impending litigation”.

However, Morgan Stanley experts say that it would be very difficult on Empire’s part to legally establish reputational damage caused by Party Gaming. It’s uncanny to think that a couple of weeks ago Empire still had a 400 million pound offer on the table, which they ended up rejecting. By taking their case to court, they are risking getting a settlement that doesn’t exceed Party Gaming’s initial offer.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.