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Toppled online poker giant, PartyGaming, and gambling network operator Cryptologic appear to be joining forces in an effort to boost the fortunes of both companies. In a deal announced on Monday, Cryptologic is set to provide a number of its unique online casino games to PartyGaming’s casino operation. A second deal, reportedly in the works, was uncovered by the Financial Times yesterday, and will see Cryptologic become responsible for a portion of Party Poker’s network traffic.

The five year collaboration, signed by the two organizations on Monday, creates a link between PartyGaming and WaterLogic – the subsidiary company of Cryptologic responsible for its casino games. With over 200 licensed games available to them, WaterLogic looks set to offer PartyGaming with a number of slot games based around properties such as Spiderman, Bejeweled and Street Fighter.

It seems, however, that that this was not the end of their business together. The respected international newspaper, The Financial Times, has reported that Cryptologic is undergoing negotiations to take over a portion of a major poker network in order to “increase liquidity while reducing expenses substantially.” Although no sources were mentioned, the paper claimed, in no uncertain terms, that the unnamed poker network was that belonging to Party Poker. Under the terms of the deal, Party Poker hopes to save between $12 million and $15 million on their annual running costs.

Any move to improve the financial profile of Party Gaming will be welcome news to their stockholders, as well as the poker community in general. Formerly in the industry titans, in 2005 they had a 40% market share and were raking in yearly profits of over $850 million. Compare that to today and you’ll see a paltry 8.5% market share, and only $150 million made in the first half of this year.

The deal is also a positive step for Cryptologic, who is set to lose lucrative online poker site William Hill in the near future. The company is transferring their players from the Cryptologic network over to the increasingly popular iPoker network, run by Playtech Ltd. The move is slated to take place in January 2009.