Founder of PartyGaming Pleads Guilty

18 December 2008

The US has struck again. PartyGaming founder has pleaded guilty to the charges of illegal web gambling.

The biggest shareholder in PartyGaming, the UK-listed online gambling company, has offered to pay US authorities $300m and plead guilty to a charge relating to illegal web betting in the most prominent prosecution so far in the US clampdown on internet gambling.

Anurag Dikshit, co-founder of the company, retains a 27 per cent stake and will appear in the Southern District Court of New York today to admit to an offence under the Wire Act and to agree to co-operate with the US Department of Justice, people close to the situation say.

No formal plea bargain has been agreed, and Mr Dikshit, one of India’s richest businessmen, risks a jail sentence of two years. He hopes the DoJ will recommend to Judge Jed Rakoff that, having gone voluntarily to the DoJ, he should not go to jail.

Observers say it is a landmark moment for online gambling.

Mr Dikshit’s fate and the DoJ recommendation will be watched by individuals and companies who have been pursued for taking bets in the US.

They want to put the liabilities behind them to enable consolidation and growth.

But Ruth Parasol and her husband Russ DeLeon, Party-Gaming’s co-founders, who each own 14 per cent of the company; have shown no sign of any willingness to settle.

PartyGaming, which enjoyed a stellar rise as a FTSE 100 company three years ago and made millions out of online poker, has been in separate talks with the DoJ for months, as have other companies – including 888 and Sportingbet.

PartyGaming declined to comment but is expected to make a statement to the stock exchange this morning.

For the full story:

http://www.ft.com/cms/s/0/e847e3ea-cb10-11dd-87d7-000077b07658.html?nclick_check=1

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