April 7, 2009 (PAP Newswire) – After a long period of negotiations and legal maneuvering, PartyGaming – the company behind the once-industry leading PartyPoker.com site — has reached a deal with the U.S. Department of Justice to settle the prosecution case against it, according to today’s Wall Street Journal.
deal is being called a “non-prosecution agreement,” meaning that the
company will pay a sizable fee rather than face any criminal charges.
The agreed-upon penalty will take the form of a $105 million fee,
reached after nearly two years of discussion and negotiation.
case has been a controversial one, given the fact that it is
essentially prosecuting a non-American company for providing a service
with a legality that is difficult to define in black-and-white terms.
almost two years of discussions, the U.S. Attorney’s Officer for the
Southern District of New York has agreed not to prosecute PartyGaming
or any of its subsidiaries for providing internet gambling services to
customers in the U.S. prior to the U.S. government banning the online
gambling industry in October, 2006,” writes Lilly Vitorovich in the article.
turn, U.K.-listed PartyGaming has accepted a ‘statement of facts’ about
its business activities prior to the ban, and will pay $105 million in
eight installments over a period ending Sept. 30, 2012, from its
existing financial resources. The sum is broadly in line with market
“Under the statement of facts, PartyGaming admits
that it offered internet gaming to players in the U.S. from 1997 to
Oct. 13, 2006, which was ‘contrary to certain U.S. laws.’”
the terms of this agreement, PartyGaming also agrees to continue to
avoid the U.S. market in the future (at least, until current laws
PartyGaming’s CEO, Jim Ryan, chose to see the
resolution of the years-long case as a positive note, giving his
company freedom to pursue new goals. The company will now focus on
merger and acquisition activity, according to the article, which went
on to predict that the closure of this case represents a turning point
for the online gaming industry in general, and may signal a period of
market and corporate consolidation.
“We’ve received a
favorable indication from the parties that we’d gone to that once this
matter was resolved that we could have access to not only the equity
markets, but to debt markets,” states Ryan in the article.
Illustrating the positive reaction to the announcement, PartyGaming, Sportingbet, and 888 shares were all up significantly today.
To read Lilly Vitorovich’s original article in the Wall Street Journal, please click here.