PartyGaming, Cryptologic Talking Deal

Looking to bolster their standing in the online poker world, PartyGaming, once the behemoth of the industry, and Cryptologic are in talks to possibly combine their poker networks according to the Financial Times.  

On Monday, the two companies announced a five-year partnership in which Cryptologic, one of the top online gaming software developers, would license its casino games to PartyGaming.  PartyGaming plans to have the games up and running in the first quarter of 2009 and has the option to add more Cryptologic games in the future.  This is part of a shift in Cryptologic’s strategy to focus more on casino games, which are the most profitable games for the company, instead of poker. 

In the meantime, Cryptologic announced that it is “…detailed discussions with another major poker network…” with whom it would combine forces in an effort to reduce expenses.  Cryptologic reported a surprising $1.5 million second quarter loss, thanks largely in part to increased general and administrative expenses.  

According to the Financial Times, that poker network is Party Poker, PartyGaming’s poker arm.  Both companies have seen their poker traffic fall off dramatically since shutting their doors to United States residents after the Unlawful Internet Gambling Enforcement Act passed in 2006.  Party Poker was once the most popular poker site on the internet, whereas now, according to PokerScout.com, it is the fourth most popular for cash games.  While that ranking is still solid, its seven day average traffic count is just over half of Full Tilt Poker’s (ranked second), and barely a quarter that of PokerStars (first).   

The Cryptologic network, while never at the top of the poker ranks, was always a solid performer with rooms like Sun Poker in its stable.  It is now languishing in 19^th position and is almost a non-factor in the poker world. 

Earlier this year, Cryptologic inked a casino game deal with 888.com, a major player in the industry, and operator of Pacific Poker.  The company says that it has “a healthy pipeline of pending opportunities.”