PartyGaming has settled with the US authorities over its online gaming activities prior to the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) on 13 October 2006.
Party will pay the US authorities US$105m in instalments up to 30 September 2012 in return for the US Attorney’s Office for the Southern District of New York (USAO) ensuring the company and any of its subsidiaries will not be prosecuted for providing internet gambling services prior to UIGEA.
The company also agreed to a statement of facts as part of the settlement, in which it admitted offering real-money poker and casino gaming to US customers prior to UIGEA, which was contrary to certain US laws. PartyGaming will continue not accepting US bets and if requested, “the USAO will bring the co-operation and remedial actions of PartyGaming to the attention of other licensing and regulatory authorities”.
A spokesperson for the company said the settlement drew a line under the matter. While the amount agreed with US authorities as part of the financial settlement was at the top end of the range of what it expected to pay, the “commercial logic” of the deal meant Party could now push on with merger and acquisition activity.
The company has already held talks with various banks regarding obtaining access to capital and the response had been positive, the spokesperson said.
The agreement announced this morning has no bearing on how the US authorities view the legal position of Party’s other founders, Russ De Leon, Ruth Parasol and Vikrant Bhargava and follows on from the individual settlement agreed by PartyGaming founder Anurag Dikshit in December, which saw him pay US$300m to the US Department of Justice in New York. In the City, Party’s shares were up 32p or 14% to 250p at the time of writing, Sportingbet shares were up 11% to 46p while 888 shares were up 10% to 98.
Party announced its first quarter key performance indicators this morning. Poker revenues were down US$28m to US$53.6m, compared with US$80.7m in 2008. Casino revenue was down US$1.6m to US$40.9m on 2008’s US$42.3m and bingo revenues were stagnant, at US$1m during the period, compared with US$1.2m achieved last year.