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PartyGaming founder makes DoJ deal
Several news sources including the Associated Press, Reuters and the Telegraph in the United Kingdom are reporting that Anurag Dikshit, one of the PartyGaming founders, has made a deal with the U.S. Department of Justice to plead guilty to an online gambling charge.
In his deal, Dikshit has agreed to pay the DoJ $300 million and is expected to plead guilty in the Southern District Court of New York today.
Though Dikshit stepped down from any official role at PartyGaming, parent company of PartyPoker, he is still the majority shareholder in the company. He could face up to two years in prison after he gives his guilty plea as well as paying the $300 million fine he has agreed to.
In response to Dikshit's settlement with the DoJ, PartyGaming also put out a release updating where the company stands in the negotiation process with the U.S. government.
On June 4, 2007, PartyGaming announced that it had initiated discussions with the DoJ with the aim of removing any uncertainty over the company's legal status in the United States in regards to its online gambling activities in the nation before the Unlawful Internet Gambling Enforcement act was passed in October 2006.
Before that time, PartyGaming allowed U.S. customers to play and make deposits on its real-money sites such as PartyPoker. Once the new law was passed, however, the publicly traded company chose to remove itself from the U.S. online gambling market.
The U.S. customer base had accounted for about 80% of PartyGaming's revenue, and the company took a large hit on its shares and profits by leaving that market. It has since been working to build its business in other areas of the world while it continues discussions with the U.S. DoJ.
"The Company cannot comment on the accuracy of the report in today's Financial Times concerning developments involving Mr. Dikshit, but any such developments are completely independent from those of the Company and as such should not be seen as bearing any guidance to the nature of the Company's own discussions," said PartyGaming in a press release today.
"The Company's discussions with the DoJ have made good progress and it is currently negotiating the final terms of a possible settlement with the DoJ. Whilst these discussions are at an advanced stage, the terms of any settlement have not yet been finalized and there can be no guarantee that an agreement will be reached between the Company and the DoJ."
PartyGaming did say that based on the discussions so far, the company expects any settlement with the DoJ to involve a payment significantly lower than what Dikshit is reportedly ponying up to the DoJ. The company also believes that any settlement is unlikely to include a criminal plea on the part of the company or its directors.
The company will make an announcement of the settlement once negotiations have concluded.
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