Despite the crisis that the online poker industry is currently facing, Purple Lounge is surviving.
Even with the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) in the US, which had major online gambling companies scurrying out of the market, Purple Lounge has kept its act together by solely targeting Europe's high-level card players.
Purple Lounge's relieved chairman, Chris Gorman says, "I'm certainly happy we haven't done business in the US".
Even though Purple Lounge has only been in the business for a year, there have already been offers to buy the owners out. One offer was made at $29 million for half of Purple Lounge, which was turned down. The deal would have translated into huge profits for Chairman Gorman, who owns 20%.
"I had no faith in that company going forward," Gorman says.
"We're still in discussions with other people. Everything is always for sale at the right price. But I don't think we'll do a deal at the moment. We're growing so fast now. We will maximize that value next year and look at selling it towards the end of next year."
Gorman said that the success of Purple Lounge comes from focusing on its target market.
"Most of our poker players are in their 20s and play professionally," Gorman said.
"We've taken the off-line model where the big casinos know who the big players are and target them with special services and incentives. We do the same thing, but we do it online."
January 28, 2007