Deal between US and PartyGaming is Close

March 13, 2009 | News Category: Gaming Law

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PartyGaming was accused by the United States of breaking Internet gambling laws within the United States. Without the agreement of the rest of the company, one of the founders of PartyGaming, Anourag Dikshit decided to plead guilty when faced with the pressures surrounding the case. At the time, there was much speculation as to whether Mr. Dikshit had hurt PartyGaming's case. At the time, PartyGaming had claimed that Mr. Dikshit's plea would have very little effect on their negotiations for a settlement with the United States, which had already begun at that time.

The negotiations look as if they are drawing to a close. Jim Ryan, the new Chief Executive of PartyGaming, has said that there has been good progress towards a settlement agreement. It also seems that PartyGaming's official line, that Mr. Dikshit's plea would have little effect, might well have been correct.

Although Mr. Dikshit had agreed to pay a fine to the amount of $300 million for breaking the law in the United States, when Mr. Ryan was asked about the present state of the negotiations, he said, "We believe there will not be any criminal plea against the company or any of its former directors."

It is not expected that the final agreement will have a figure that will be anywhere near as high as that of Mr. Dikshit's initial plea. It is more likely that PartyGaming will pay around $150 million or something closer to that amount than anywhere near the $300 million sum.

The main dispute that the US and PartyGaming have began over whether poker is legal in the US or not. PartyPoker, a division of PartyGaming, used to allow United States players to play in their online poker rooms. Once online gambling in the US became illegal, there was some confusion as to whether or not poker was also covered by the law, since it is a game of skill and not only of luck. This is not the only confusion that has arisen out of the UIGEA (Unlawful Internet Gambling Enforcement Act) since its inception in 2006.

Soon after the UIGEA came into effect, PartyGaming pulled out of the US market. They did so because they are publicly traded on the London Stock Exchange and did not want to have the price of their stock jeopardized as a result of a possible negative relationship with the United States government.

Should things change in the US gambling laws in the near future, there is a good chance that PartyGaming, and other companies that pulled out of the US after the UIGEA was passed in 2006, may well return to a more organized, legalized and regulated world of Internet gambling in the United States.