As reported this week, the Nevada-based online poker subscription club network Zen Entertainment has filed for Chapter 11 bankruptcy. In the filing Zen has admitted that its business model was unsuccessful, failing to deliver a profit despite a 750,000-strong player base.
Over the past three-and-a-half years the company borrowed $16 million from stock broker and internet entrepreneur Ernest Moody, and for the past six months its efforts to sell its technology platform have been unsuccessful.
The company is currently in discussions with Swedish online gambling provider NYX Gaming Group, proposing that in return for a 'rescue' investment of $695,000, NYX becomes the sole shareholder of what is left of the company, including its technology platform.
Zen's CEO Marc Sperburg bet (and lost) on the federal legalisation of online poker in the US, hoping that his free-play monthly subscription platform could convert to real-money poker in a legal environment, and in the bankruptcy documentation admitted his company "...shows no signs of become profitable in the future."
However, the Zen network hosts several well-known brands such as Nevada-licensed South Point Poker, which is reportedly developing its own real-money software FreeGoldPoker and Cardplayer Poker (formerly Spade Club).
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