As part of a non-prosecution agreement with U.S. authorities, Internet gaming operator accepts deal for activities prior to the enactment of UIGEA

Internet gaming operator PartyGaming announced that it has entered into a non-prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York under which the USAO will not prosecute PartyGaming Plc or any of its subsidiaries for providing Internet gambling services to customers in the U.S. prior to the enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA) in October 2006. 

As part of the agreement, PartyGaming has accepted a Statement of Facts regarding its business activities prior to the enactment of the UIGEA and has agreed to pay $105 million, payable in semi-annual installments over a period ending on Sept. 30, 2012.  Such payments will be made from the Group’s existing financial resources, the company announced. 

Summary of key terms of the agreement

The company has agreed to pay a total of $105 million, payable as follows:
  • April 10 2009 ($5m)
  • Sept. 30 2009 ($10m)
  • March 31 2010 ($15m)
  • Sept.. 30 2010 ($15m)
  • March 31 2011 ($15m)
  • Sept. 30 2011 ($15m)
  • March 31 2012 ($15m)
  • Sept. 30 2012 ($15m)
Key elements of the agreement and factual background are as follows:
  • From 1997 until 13 October 2006, PartyGaming offered Internet gaming to players located in the U.S., including real-money poker and casino gaming.  On October 13, 2006, the day the UIGEA was enacted, the Group voluntarily exited the U.S. market.
  • Prior to October 13, 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 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 U.S. in violation of the prevailing law of the US or any jurisdiction within the U.S.
  • 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 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.”