Settlement Reached between US Attorneys and PartyGaming

April 13, 2009 | News Category: Gaming Law

0 Comments After lengthy talk and negotiations, and in order to avoid any further investigations, PartyGaming announced that they had reached an agreement with the United States Department of Justice. The agreement reached will end the persecution of PartyGaming by the US Department of Justice.

PartyGaming has agreed to pay money to the sum of $105 million in order to clear its name and have a clean slate as far as the United States law enforcement is concerned. The US Attorney's Office for New York's Southern District and PartyGaming reached an agreement that is a Non-Prosecution Agreement. This agreement binds the United States to commit to not prosecute PartyGaming for any actions they performed before the passage of the UIGEA (Unlawful Internet Gambling Enforcement Act) in 2006.

The agreement, which included PartyGaming's agreement to pay the United States the sum of $105 million, also included a Statement of Facts to which PartyGaming had to agree. The supposedly factual Statement of Facts states that PartyGaming allowed United States residents to play in their online poker and casino sites prior to the UIGEA's introduction. This is simply a fact, which no-one can dispute.

However, there are other questionable "facts" that were included in the Statement of Facts. For example, PartyGaming "admitted" that payment transactions which were done during the time period in question were against the law of the United States. This admission is certainly disputable as there was no clear law that seems to have been transgressed pre-UIGEA.

PartyGaming's Chief Executive Officer, Jim Ryan, explained why they were prepared to agree to the Statement of Facts document as part of the agreement with the United States. Mr. Ryan explained why PartyGaming compromised when many believed that in fact, the United States was the one in the wrong. Mr. Ryan said "It has been a long and complex process but we have reached an amicable solution with the USAO (United States Attorneys Offices) that makes commercial sense for our business and is in the best interests of shareholders."

Although it was necessary for PartyGaming to find a way to settle with the US Department of Justice, many feel that giving in is admitting guilt where there was no guilt to be admitted. However, as with all businesses, at times, a compromise is better in order to be able to continue operating as is needed for the company. Mr. Ryan continued that "We are now well-placed to seize organic as well as strategic opportunities that previously were beyond our reach."

PartyGaming's share prices were boosted by 8% after the news of the agreement became public.

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