PartyGaming talks to US Dept of Justice

Better the enemy you know

Online poker firm PartyGaming is in talks with the US Department of Justice (DoJ).

The firm stopped taking bets from US citizens when the Unlawful Internet Gambling Enforcement Act (UIGEA) came into force in 2006. This cost PartyGaming almost three quarters of its customers and knocked 60 per cent off the price of its shares.

A statement on PartyGaming's website says the company is responding voluntarily to a request for information from the DOJ. PartyGaming initiated the discussions because of uncertainty as to how the US authorities view online gambling before the UIGEA was enforced.

Earlier this year US authorities arrested former executives of Neteller, apparently pertaining to events which pre-dated the outlawing of online gaming in the US. Neteller, based on the Isle of Man, is a payment service which focused primarily on gambling.

Several executives from online gambling firms, such as David Carruthers of BetonSports and Peter Dicks of SportingBet, were arrested in the US before the UIGEA came into force. The State of Louisiana later dropped all charges against Dicks, while BetonSports last month pleaded guilty to racketeering charges.

The European Union's internal market commissioner Charlie McCreevy described US actions as restrictive and said he was considering taking the issue to the World Trade Organisation (WTO). Antigua, hit by an earlier US ban of non-US firms operating in the US gaming and gambling markets, is also complaining to the WTO.

PartyGaming shares were down very slightly on the news at 41p, down from a year high of 120p.

The whole PartyGaming statement is available here (pdf). ®

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