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PartyGaming Shares Rally Following News of Settlement

Written by:
C Costigan
Published on:
Dec/16/2008
PartyGaming

PartyGaming (UK:PRTY: news, chart, profile) shares were up nearly 7 percent on Tuesday following news that the online gambling group said any settlement it pays to the U.S. Department of Justice is likely to be "significantly lower" than the $300 million that co-founder Anurag Dikshit is reportedly set to hand over.

Gambling911.com reported Monday night that Dikshit, the 207th richest man in the world, has plead guilty to charges related to illegal online gambling activity.  The settlement was an effort to avoid potential future prosecution.  Those close to this matter insist that Dikshit was not under any indictment.

PartyGaming began talks with U.S. authorities in 2007 with the aim of removing any uncertainty over its legal status. The talks revolve around its operations prior to October 2006, when it allowed U.S. customers to gamble on its Web sites.

"The company's discussions with the Department of Justice have made good progress and it is currently negotiating the final terms of a possible settlement," it said Tuesday.

"On the basis of the discussions to-date, PartyGaming expects any settlement with the Department of Justice to involve a payment by the company of an amount that is significantly lower than that reported to be paid by Mr Dikshit," the statement continued.

"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," it added.

Dikshit, on the other hand, could face up to two years prison time in the US, though many believe he will be looking at zero time behind bars.  The Indian billionaire does not have any prior convictions. 

Shares in PartyGaming rose 6.9% in early London trading. Other gambling companies involved in similar talks with the Department of Justice also rallied strongly, with 888 Holdings (UK:888: news, chart, profile) adding 7.5% and Sportingbet (UK:SBT: news, chart, profile) jumping 18.6%.

The reported guilty plea by Dikshit will be the highest-profile prosecution so far in the long-running U.S. crackdown on online gambling.

Christopher Costigan, Gambling911.com Publisher

 

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