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PartyGaming Concludes Non-Prosecution Agreement With US Authorities

by Phillip Morton, Investors Offshore.com

17 April 2009

A leading Gibraltar-based online gaming company Partygaming has announced the conclusion of its court case with US authorities; Partygaming has entered into a Non-Prosecution Agreement with the US Attorney’s Office for the Southern District of New York (USAO).

Under the terms of the Non-Prosecution Agreement, the USAO will not prosecute PartyGaming Plc or any of its subsidiaries for providing internet gambling services to customers in the US prior to the enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA) on 13 October 2006. As part of the agreement, the Company has accepted a Statement of Facts regarding its business activities prior to the enactment of the UIGEA and has agreed to pay USD105m, payable in semi-annual instalments over a period ending on September 30, 2012. Such payments will be made from the Group’s existing financial resources.

PartyGaming has entered into a Statement of Facts regarding its activities prior to October 13, 2006. Key elements of the agreement and factual background are as follows:

  • From 1997 until October 13, 2006, PartyGaming offered internet gaming to players located in the US, including real-money poker and casino gaming. On October 13, 2006, the day the UIGEA was enacted, the Group voluntarily exited the US market.
  • Prior to 13 October 2006, certain of the US customer transactions intended for PartyGaming that were processed by third parties, and other gaming and payment-related activity, were contrary to certain US laws.
  • PartyGaming has agreed to maintain, with respect to its operations, a restriction preventing internet gambling services from being provided to customers in the US in violation of the prevailing law of the US or any jurisdiction within the US.
  • If requested by PartyGaming, the USAO will bring the co-operation and remedial actions of PartyGaming to the attention of other licensing and regulatory authorities.

Commenting on the announcement, Jim Ryan, Chief Executive Officer said:

“The resolution of our position with the US 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.”

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