Former online gambling behemoth PartyGaming have reached a landmark settlement with the U.S. government, absolving them of any illegal activity. The owners of Party Poker agreed to pay the U.S. Attorney’s Office $105 million in return for immunity from prosecution.
As part of the deal the firm accepted a statement of facts in which they admit violating U.S. laws between 1997 and 2006. In a press release PartyGaming consent that: “Prior to 13 October 2006, certain of the U.S. customer transactions intended for PartyGaming that were processed by third parties, and other gaming and payment-related activity, were contrary to certain U.S. laws.” From 2006 onwards the company has not operated within the U.S, having withdrawn following the enactment of the Unlawful Internet Gambling Enforcement Act.
The relatively small figure PartyGaming are required to pay marks a softening in the U.S. government’s position towards online gambling. This new found optimism was felt throughout the financial markets, with share prices in PartyGaming and other online gambling companies rising sharply. 888 Holdings and SportingBet have also seen a steep upturn in share prices, with both companies expected to agree similar settlements in the near future.
Chief Executive Officer for PartyGaming, Jim Ryan, had positive things to say about the company’s future: “The resolution of our position with the U.S. authorities marks an important day for PartyGaming. It has been a long and complex process but we have reached an amicable solution with the USAO that makes commercial sense for our business and is in the best interests of shareholders. We are now well-placed to seize organic as well as strategic opportunities that previously were beyond our reach.”
Many financial analysts predict that this move will herald the beginning of the end for the UIGEA and rumors are now circulating about possible mergers and consolidations. Those companies who withdrew from the US following the UIGEA are looking to gather themselves for an assault on companies like PokerStars and Full Tilt who chose to ignore the new law. Party Poker in particular will be eager to claw back some of the 40% market share it once enjoyed. PokerStars currently hold a 37% market share.