Empire, Party Close to Settlement; New Partnership Possible?

Empire Online, operator of online poker room, Empire Poker, said today that it was in “advanced discussions” with former partner, PartyGaming towards settling a legal battle that has been brewing since November.

Empire announced the legal action in November and eventually sued PartyGaming in December, claiming that Party unfairly inflicted damage on Empire by cutting off relationships with its “skins.” These skins, along with Party Poker, PartyGaming’s online poker room, pooled its customers at shared virtual tables, creating the largest poker network on the internet. When PartyGaming eliminated the skin system, Empire’s customer base shrunk and it warned that it would fall short of its financial targets.

Since then, however, Empire Online has shocked analysts by delivering positive results. Its stock price has almost doubled since tanking in December.

While details of the potential settlement are unknown, perhaps the most interesting news coming out of this is that of a possible renewed partnership between Party and Empire. Said Empire Online:

"Empire Online ... is in advanced discussions regarding settlement of the outstanding litigation claim with PartyGaming and assignment of the company's related skin activities to PartyGaming."

Empire Online’s shares were up 5% on the day, while PartyGaming fell slightly.

Originally published February 10, 2006