Partygaming in the Dikshit
Partygaming, the brains behind Partycasino and Partypoker, are apparently coming to the end of a two year disagreement with the US Department of Justice (DOJ) over US gambling laws and the 1961 Federal Wire act.
Partygaming's main shareholder, Anurag Dikshit, has recently been in court over the matter and has pleaded guilty to offering illegal gambling in the US. Speaking about his alleged crimes, Dikshit suggested "Between 1999 and 2006 I was a major shareholder and director of PartyGaming, a company that offers casino and party games over the internet...I was aware that wagers transmitted by wire were being placed by PartyGaming customers in the US...I knew that it violated US and state laws from 2005 to 2006."
While Dikshit has now been ordered to cough up around $300 million, his sentencing has been suspended for two years and it looks likely he won't end up in prison, provided he works with the DOJ. Partygaming's other main shareholders; co-founders Ruth Parasol and Russ Leon are unlikely to plead guilty under the Federal Wire Act, as a recent press release from Partygaming notes:
"PartyGaming expects any settlement with the DOJ to involve a payment by the Company of an amount that is significantly lower than that reported to be paid by Mr Dikshit in today’s Financial Times. In addition, the Company believes that any such settlement is unlikely to include a criminal plea on the part of the Company or any director."
This two year disagreement between Partygaming and the US DOJ stems from the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA), which came into play in 2006.
Even though Partygaming were one of the first to back out of the US market post-UIGEA, causing their share prices to drop dramatically, they are still being punished. The Federal Wire Act is a law that specifically prohibits certain types of betting. Critics have questioned whether this act really applies to online gambling and Partygaming's co-founders are now denying that they have contravened the act.
Dikshit has been bailed for $15 million and has had restrictions placed on his travelling. Partygaming's shares have since sharply risen, as many believe that Partygaming won't be particularly hindered by the DOJ's ruling. It seems that for now, we'll just have to wait and see what Partygaming do next.
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