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PARTY GAMING DEAL WITH U.S. AUTHORITIES IN SIGHT?
CEO confident of a resolution before end of 2008London-listed online gambling group Party Gaming plc could achieve a settlement of its U.S. position with Department of Justice officials before the year is out, Chief Executive Officer Mitch Garber told business reporters this week. Garber, who leaves Party Gaming on 1st May 2009, said his departure would not impact such a settlement.
The company, which exited the United States market following the enactment of the Unlawful Internet Gambling Enforcement Act in late 2006, has been in negotiations with the U.S. authorities for some months, apparently seeking a settlement on its pre-UIGEA activities which would obviate any risk of retrospective prosecution. Such a settlement would considerably strengthen the company by removing uncertainties flowing from the American legal situation.
According to AFX News, Forbes and other media reportage, Garber told reporters that discussions on the issue were progressing in a constructive manner, generating confidence that a resolution could be reached this (2008) year.
“It’s very hard to predict. There’s some fluidity to it. We’re in the midst of a process and our attorneys tell us it is moving in the right direction and at the right speed,” Garber said.
The reports recall the Neteller plc case, where the Isle of Man-based e-cash processor paid a $136 million settlement to avoid further prosecution arising from its involvement in U.S. online gambling transactions pre-UIGEA, and recalls that Gibraltar-based gambling group 888.com has also reportedly initiated talks with the US authorities.
This will be interesting. After Party, do they go after others? Retroactive compensation? I would like to see what the reasoning is behind the “settlement” and why they are entitled to compensation from Party.
@Focal 162063 wrote:
I would like to see what the reasoning is behind the “settlement” and why they are entitled to compensation from Party.
The US needs money, they spent many times over what they take in staging a war.
@Dominique 162086 wrote:
The US needs money, they spent many times over what they take in staging a war.
I agree somewhat, that’s not the only thing they spend their money on though. It will be interesting to see the rationale after all this has been “settled” with Party. I still don’t completely understand what they are negotiating.
Party wants to be 100% clean because they have offered themselves for sale to Vegas companies.
They are the ones who approached the DOJ, not the other way around.
On the brighter side, this could pave the way for regulation of the industry and possibly opening up of the US market.
Satya, that is what I wanted to ask. Do you think that if they settle by the end of the year that the US market will re-open? Could this mean they are getting close?
You have asked a billion dollar question, brad
I think this will take some time, won’t be as soon as you expect, but the industry has to be regulated some day. Like Dom has mentioned, the online companies have to be 100% clean to enable the land based gaming companies acquire them. This is a logical step for regulation considering the fact that the land based companies have enough clout in US to get the regulation passed.
There is a need in the market to gamble and currently players play at casinos which accept US bets. Considering the market economics, government can’t enforce a a ban completely because there would be always some operators which will accept bets. Therefore in the interests of the players and the tax coffers, it makes sense for any government to regulate and have some level of control on the industry.
I don’t really think that a lot of casinos want to be acquired by Vegas companies…
Also, Party is different, it doesn’t issue licences. It owns all the casinos and the software. Other software companies do not own their casinos, nor can the casinos sell themselves without approval.
Much more complicated.
Also, it remains to be seen how desireable it is to have Vegas companies own the online casinos.
Lots of variables here, but I see one positive, and that is when a Vegas casino owns an online software, they will want to launch it. Now, of course they can just leave things as is and only target non-US countires, but I bet they will be motivated to get the online gambling industry regulated in the US.
The Vegas companies are used to strict regulation and a lot less scared of it…
I think we still need to wait until UIGEA is repealed, and then regulation takes it’s course. After that I think we will see deals between existing softwares and Vegas, as well as some proprietary softwares from Vegas casinos.
To me the scary thing is the amount of $$ land based casinos have at their disposal. What happens to the affiliate has been discussed often. YES, what happens when the TV is filled with online casino commercials, and they don’t need portals to find the way to the newest casino? What about when they don’t need our reviews because the hottest game is just the latest fad (The one they heard about on TV after American Idol)
“The future’s uncertain and the end is always near….”
There are no Vegas TV commercials now and I doubt there will be then.
Ok you caught me, I don’t even watch TV (I have one, but we don’t get anything or tune it in). But, that aside, how come I always hear about “play for fun” commercials? and in the same argument/discussion, I always hear that they are on TV because they only offer free games. (not play for real)
Also, I am almost 100% certain that I have heard Harrah’s commericals at a hotel before, and I know for a fact that in Colorado, the casinos did radio, and I’d be surprised if not TV.
They also do bulk mailings to all of their land based casino players list.
They run large billboards all over the place.In other words, the last people I would want to have to compete with are Las Vegas or any other land based casinos with huge lists of players and unlimited marketing $$. The whole idea of land casinos coming into this industry is absolutely frightening to me, even if its inevitable.
land casinos do commercials all the time and they are legal. At least in Canada.
The thing you don’t see is land casinos opening online sites and promoting those… yet.Here you see small local Indian casinos only. Not Vegas.
.net places do advertise on cable poker events.
But that’s totally besides the point. In Britain they advertise all over and the British based online casinos such as Ladbrokes etc. have recently started courting affiliates seriously.
If you have the money to market, you will market every way you can. And online, you are going to use affiliates.
It doesn’t make sense for a business to not make all the money it can.
