Q3 Trading Update

Empire Online Limited
10 October 2005

10th October 2005



                             Empire Online Limited
                               Q3 Trading Update
                       'Strong Network Growth Continues'



Empire Online Limited (the 'Company' or 'Empire Online'), a leading
multi-channel on line gaming network and marketing services company, today
provides the following trading update for the third quarter of 2005.

Trading

Trading has been very strong for the third quarter.

  • Number of new real money players have risen to 53,148 for Q3 2005, which
    represents an increase of 62% over Q3 2004 and 24% over Q2 2005.



  • Net gaming revenues of US$31.4 million, which have increased by 71% on Q3
    2004 and 24% on Q2 2005. Estimated net operating profit of US$16.1million,
    which has increased by 43% on Q3 2004 and by 30% on Q2 2005.



  • Number of active players (players who played for real money during the
    last 90 days) has increased to 173,901 for Q3 2005, which represents an
    increase of 153% over Q3 2004 and 37% over Q2 2005.



  • Cost per acquisition of new real money players has been maintained at the
    lower end of the normal range at US$ 236.



During the third quarter of 2005 the Company completed the acquisition of the
casino and poker brands known as 'Club Dice' and 'Noble Poker'. Since
acquisition the Company has made a significant effort to build both brands,
which will continue through the final quarter of this year. Both of these brands
are supported by the, well respected, Playtech software platform. These
acquisitions have been integrated successfully and are now contributing strongly
to the Company's growth in new real money players for both poker and casino.



These new brands, together with the newly developed backgammon platform will
provide a more diversified range of products and are expected to contribute
significantly to the future growth of the Company.



Since the beginning of Q4 2005, the Company has acquired more than 40% of its
new real money players with these new brands.



As announced within the AIM admission document published by Empire Online, the
Company intends to pay a final dividend of US$20m, which will make a full year
dividend of US$30m for the current year. Going forward, the Company intends to
maintain a policy of a dividend payout ratio of 50% of its earnings.



Key financial highlights (See Note 1) include:



•         Strong net gaming revenues of US$31.4 million (Q3 2004:  US$18.3
million; Q2 2005: US$ 25.3 million);



•         Poker revenue of US$23.0 million (Q3 2004: US$ 13.5 million; Q2 2005:
US$20.2 million).



•         Casino revenue of US$ 8.4 million (Q3 2004: US$4.8 million; Q2 2005:
US$ 5.1 million).



•         Estimated net operating profit of US$16.1 million (Q3 2004:  US$11.3
million; Q2 2005:  US$ 12.4 million)



•         Net operating profit margins were 51.3%, which represents an increase
of 2.2 percentage points on the net operating profit margin of 49.1% for Q2
2005.



Key performance                Q3 2005     Q3 2004   Change  Q2 2005     Change
indicators (KPIs)                                    %                   %
(1) Number of New    Company      53,148    32,795      62      42,772      24
Real Money Players
acquired
                     Poker        37,570    24,606      53      32,934      14
                     Casino       15,578     8,189      90       9,838      58
(2) Number of Active Company     173,901    68,679     153     126,511      37
Players (players who
played for real
money during the
last 90 days)
                     Poker       126,644    48,460     161     102,698      23
                     Casino       47,257    20,219     134      23,813      98
(3) Average number   Company      21,917     9,145     140      17,553      25
of Active Players
per day (Average
Real Money players
playing during a
day)
                     Poker        19,030     7,946     139      16,229      17
                     Casino        2,887     1,199     141       1,324     118
(4) Poker Active               1,769,704   731,032     142   1,476,839      20
Player Days - (i.e
the number of days
each player
generates rake)
(5) Yield per raked  Poker         23.70     23.85      (1)      22.08       7
day *

* Empire Poker only



PartyGaming relationship

Partygaming has recently announced changes to its operating platform creating an
enhanced overall product for its skins, which include 'EmpirePoker.com'. These
enhancements have been provided without any change to the existing commercial
arrangement, reaffirming Partygaming's commitment to 'EmpirePoker.com'.

Product enhancements include 'beginners' tables' - these include 'micro-limit
tables' and low buy-in tables - and $50/$100 and $100/$200 tables and improve
the dedicated support provided to 'skins' and their players by PartyGaming.



The creation of a new 'EmpirePoker.com' led poker community alongside the fast
growing 'Noble Poker' platform will give the Company greater flexibility in
attracting new players.



It is too early for Empire Online to accurately assess what if any impact this
move will have on its short term financial performance as:



•         player liquidity on the existing system remains high: the directors of
Empire Online believe that, as measured by active players, this system would be
one of the top three largest poker rooms in the world;



•         a key strength for the Company remains its ability to attract and
retain poker players with a low cost per customer acquired;



•         Empire Online has already made progress with its diversification
strategy of directing new poker players to its own platform, 'Noble Poker', the
acquisition of which was completed on 13 September 2005;



•         Due to the strong growth seen in new real money players acquired
through 'Noble Poker' and 'Club Dice', since the start of Q4 2005 significantly
less than half of new real money players have come through 'Empire Poker'.



CEO Noam Lanir commented; 'We are delighted in our strong trading and the
strategic advances we have made during the third quarter. In a period where
there has been much uncertainty over potential growth rates in the online gaming
industry as a whole we believe our results demonstrate the strength of our core
marketing skills. By diversifying our distribution channels, we have laid the
foundations for sustainable long term growth, ahead of the market, across the
Empire Online network. We are determined to pursue industry-consolidating
opportunities as they arise. '



Note 1

The Company is not required under the listing regulations of the London Stock
Exchange to publish quarterly financial data and does not intend to do so.
However the Company has provided unaudited estimates of turnover and net
operating profit within this statement.



For further information:



Empire Online Limited                               [phone]

Noam Lanir, Chief Executive Officer

Andrew Burns, Chief Financial Officer

Andrew Burnett



Citigate Dewe Rogerson                             [phone]

Simon Rigby

Sarah Gestetner

Ged Brumby




                      This information is provided by RNS
            The company news service from the London Stock Exchange