Friday, April 10, 2009
Party Gaming Settled with USA for $105 Million
4:39 AM | 
Posted by
coolvision
After a long period of negotiations and legal maneuvering, Party Gaming has reached a deal with the United States Department of Justice to settle the years-long prosecution against the U.K.-listed online casinos gambling company, the Wall Street Journal reports today.
The 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.
The 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 clear terms.
"In turn, U.K.-listed Party Gaming 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 expectations.
"Under the statement of facts, Party Gaming admits that it offered internet gaming to players in the United States from 1997 to Oct. 13, 2006, which was 'contrary to certain United States laws.'"
Under the terms of this agreement, Party Gaming also agrees to continue to avoid the United States market in the future.
Party Gaming'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, Party Gaming, Sportingbet, and 888 shares were all up significantly today.
The 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.
The 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 clear terms.
"In turn, U.K.-listed Party Gaming 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 expectations.
"Under the statement of facts, Party Gaming admits that it offered internet gaming to players in the United States from 1997 to Oct. 13, 2006, which was 'contrary to certain United States laws.'"
Under the terms of this agreement, Party Gaming also agrees to continue to avoid the United States market in the future.
Party Gaming'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, Party Gaming, Sportingbet, and 888 shares were all up significantly today.
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