Poker News

PartyGaming Co-Founder Anurag Dikshit Severs Ties With Stock Sale

Ending a relationship that dates back to the beginning of the online poker industry, Party Gaming co-founder Anurag Dikshit has divested himself of any ownership in the company with the sale of his remaining stock on Tuesday.

According to the London Stock Exchange and the British newspaper The Telegraph, Dikshit owned slightly more than 38.8 million shares of Party Gaming PLC, which is traded in London under the symbol PRTY. Because of his ownership of the stock, Dikshit held voting rights that would have continued to hold a significant influence on the company’s track. With the sale, however, Dikshit has fully divested himself of any connection with the company he helped start back in the late 1990s.

The 38.8 million shares of Party Gaming stock held by Dikshit amount to £114 million and helped to drive the price of Party Gaming PLC up during trading on Tuesday and Wednesday. Opening at 277.10p at the start of trading Wednesday, Party Gaming PLC trended up 14.2p over the course of the day, finishing at 292p.

It is estimated that Dikshit has cashed out stock in the company that eclipses £700m in value. Through his involvement with Party Gaming, Dikshit has also become one of India’s wealthiest citizens. With the sale of his remaining ownership in the company complete, Dikshit is expected to return to the many philanthropic trusts that he oversees, including those that fund medical and educational interests in India.

Since the creation of Party Gaming in the late 1990s, Dikshit had been a formative figure in the company. Along with husband and wife Russ DeLeon and Ruth Parasol as well as Vikrant Bhargava, Dikshit – who was the creator of the Party Gaming software that the company uses – drove the company to reach the pinnacle of the online poker industry with PartyPoker. By 2005, when the foursome took Party Gaming public on the London Stock Exchange, PartyPoker had even become a force in the live poker world with a sponsorship deal at the World Series of Poker (WSOP).

2006 proved to be a pivotal point for the company, however. With the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) by the American government, Party Gaming was forced to prohibit American players from participating on PartyPoker (as a publicly traded entity, it could not violate the laws of another country and remain on the LSE). Since that time, Party Gaming has been passed in the online poker industry by two rooms that still accept American players, PokerStars and Full Tilt Poker, and battles for the third spot consistently with another non-U.S. facing entity, the iPoker Network.

Dikshit has been the only founder of Party Gaming to ever face American authorities as far as their gaming actions are concerned. After the passage of the UIGEA, The Telegraph reports that Dikshit was “increasingly worried about the ramifications of the company’s operations being declared illegal in America” and stepped down as the director of Party Gaming. This led to his admission of guilt in December 2008 in a U. S. court to violating laws regarding online gaming. Still facing the possibility of two years in jail for his guilty plea, Dikshit has paid $300 million in fines and, according to Justice Department officials, has been assisting them in their ongoing investigations. Whether Dikshit will face any jail time when the case is reviewed in December 2010 is still unknown.

The sale of Dikshit’s remaining stake in PartyGaming comes at a time when the company is looking at several merger options, according to The Telegraph. The outlet states that PartyGaming is “continuing to hold discussions with a number of companies in the gaming sector regarding potential consolidation opportunities” and speculates that industry competitor bwin is a possible merger partner.

Anurag Dikshit’s Sale of Party Gaming Stock Receives Mixed Reaction

One of the major poker headlines this week was the news that Party Gaming Cofounder Anurag Dikshit would divest himself of nearly 114 million shares of the company’s stock, which is traded in London under the symbol “PRTY.” Now, the industry has had a chance to react.

The internet gambling think tank sported mixed reactions to the news, as Dikshit’s departure meant that a man who admitted to violating U.S. law in a New York courtroom one year ago would no longer hold any interest in the company. Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “The thing to take away is that this is probably good overall for Party Gaming. When you have one of their founders pleading guilty, if and when things start to get normalized in the U.S. and Party Gaming comes into the market, they need to clear it off the books. The fact that he’s exiting the company is good for its future.”

When internet gambling will be legalized and regulated in the United States is anyone’s guess. Congressman Barney Frank (D-MA) introduced HR 2267 in May as one solution. The bill outlines a framework for the explicit legalization of the industry and, although the measure is up to 62 cosponsors, it has not yet been scheduled for markup in the House Financial Services Committee.

On how members of Congress and others outside of the industry would react to Dikshit’s exit, Brennan explained, “If Dikshit leaving Party Gaming can be a benefit to that company, I would say that it does the same broadly for the industry.” Financial analyst Nick Batram told Bloomberg that Dikshit’s departure meant that Party Gaming “may also find it easier to raise funds from institutional investors rather than the founders for large sports gambling acquisitions.” The Wire Act of 1961 has historically been interpreted to mean that online wagering on sports is not permitted in the U.S.

Dikshit will purportedly turn over the proceeds of his sale, which will likely total more than ?188 million, to his charitable foundation. On the TwoPlusTwo online poker forums, posters questioned Dikshit’s charitable motives: “If he donated to an established charity that could not be mistaken for a front, then that would be impressive,” one skeptic noted. Some have speculated that tax benefits are the real reason behind his actions. Brennan told Poker News Daily, “He wants to get out of the business and focus on his charitable endeavors.”

The sale of two-thirds of Dikshit’s stake sent shares of Party Gaming plummeting. Trading above 284 pence on October 19th, the stock dove to 240 pence in 24 hours, a dip of 15%. PRTY closed trading on Friday on the London Stock Exchange fetching 243 pence, 135 pence above its asking price one year ago.

An article in the Financial Times summed up the reaction from most of the industry: “The truth, however, is that while the distancing of Mr Dikshit can’t be bad for Party Gaming, it is still frustratingly unclear what the odds are on a successful return to the U.S. market.” In five weeks, the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). The impact of the December 1st deadline remains to be seen, but the Poker Players Alliance (PPA) recently authored a letter to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking for the UIGEA’s regulations to be delayed by one year.

Party Gaming Cofounders Ruth Parasol and Russ DeLeon, a husband and wife team, have not yet announced their intentions to sell stock or formulate a plea agreement with the U.S. Government.

Anurag Dikshit Sells Remaining Stake in Party Gaming

According to an article that appeared in eGamingReview (EGR) on Tuesday and filings to the London Stock Exchange, Party Gaming Co-Founder Anurag Dikshit will sell his 28% share in the company for at least ?188 million.

It’s a curious twist on a story that began developing last December, when Dikshit appeared in the Southern District Court in New York. The Party Gaming personality pled guilty to violating the Wire Act of 1961 and agreed to fork over $300 million to the U.S. Government. He also faces up to two years behind bars, with sentencing scheduled for 2010. Dikshit’s spokesperson, Shimon Cohen, told EGR, “Anurag has paid the $300 million fine that he was asked to pay by the U.S. authorities and has decided it is time to move away from the company.” The Wire Act has traditionally applied to online wagering on sports, not online poker. Read the entire EGR Anurag Dikshit article.

Dikshit was originally rumored to be selling two-thirds of his 28% stake in Party Gaming; however, EGR later reported that the entirety of his shares would be unloaded. PartyPoker, the online poker arm of Party Gaming, withdrew from the U.S. market in 2006 shortly after the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was attached to the SAFE Port Act in the waning moments of that year’s Congressional session at the urging of then-Senate Majority Leader Bill Frist (R-TN). The regulations of the UIGEA were approved as midnight rules by the outgoing Bush Administration and will be fully enforced on December 1st.

In a filing to the London Stock Exchange on Tuesday, where Party Gaming is traded under the symbol “PRTY,” Anurag Dikshit, under the names BT Nominees Limited and Crystal Ventures Limited, is listed as selling 75 million shares of PRTY, or two-thirds of his original total. The filing explains, “Crystal Ventures Limited is wholly owned by BT Nominees Limited who hold shares in PartyGaming Plc under a declaration of trust in favor of Mr Dikshit.” Dikshit owned 113 million shares prior to the sale posted on Tuesday in London and retained nearly 39 million “indirect voting rights.” The sale of the remaining interest has not yet been posted.

At the close of trading on Tuesday in London, shares of PRTY were fetching 240.10p and EGR noted that Dikshit expects to pull in at least ?188 million as a result of the transaction; the sum will be donated to charity. On Monday, PRTY was trading at 284p before Dikshit’s sale, which promptly sunk the share price by 15%. All told, Dikshit’s agreement with the U.S. Government last December ballooned the firm’s stock, which sat at below 140p before quickly climbing above 200p. Exactly one year ago, shares of PRTY were valued at 123p.

Ruth Parasol and Russ DeLeon, who founded Party Gaming along with Dikshit, were not expected to follow suit, according to EGR. In the meantime, PartyPoker officials have heralded the election of its ambassador, World Poker Tour (WPT) Host Mike Sexton, to the Poker Hall of Fame. Sexton is the lone representative of the Class of 2009 and will be officially inducted in ceremonies taking place on November 7th during the World Series of Poker (WSOP) Main Event final table. Sexton is a WSOP bracelet holder and re-signed with PartyPoker in April.

In August, Party Gaming acquired the WPT for $12.3 million, outbidding a subsidiary of Playtech, which owns and operates the massive iPoker Network. Four months earlier, the company entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Southern District of New York, agreeing to pay the Federal Government $105 million. In the process, Party Gaming admitted that it solicited U.S. customers prior to the UIGEA’s passage and agreed not to do so in the future until the industry is licensed and regulated.

Anurag Dikshit, The Founder Of PartyGaming, Leaves The Company

According to EGRMagazine, the Indian millonaire and founder of PartyGaming, Anurag Dikshit leaves the company completely.

Earlier today Anurag Dikshit announced that he is selling his 28% share of PartyGaming and will focus on charity work at Asia.

But now Anurag’s spokesman, Shimon Cohen, told EGRMagazine that Dikshit will sell his remaining stake too. All the profit (around 180 million pounds) will go to charity.

Dikshit pleaded guilty to internet gambling charges under the US Wire Act (UIGEA) last December and had to pay a $300 million fine.

“Anurag has a charitable foundation that has been running for a number of years that he would like to be able to transfer the proceeds into, and to continue to do the works of the charitable foundation.” Cohen concludes the brief.

Source: EGRMagazine

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Anurag Dikshit, The Founder Of PartyGaming, Leaves The Company

Emilio Gomez Steps Down from Party Gaming Board of Directors

Party Gaming lost a member of its Board of Directors last week, when Non-Executive Directors Emilio Gomez stepped down from his post for personal reasons.  The official statement from Party Gaming announcing his resignation made no mention of a future replacement and noted a balance between Executive and Non-Executive members of the Board in the wake of Gomez’s departure.

Now that Gomez has moved on, the Board consists of seven members, including Chief Executive Officer Jim Ryan, Non-Executive Chairman Rod Perry, and Finance Director Martin Weigold.  Gomez first began his tenure as one of the group’s Non-Executive Directors in December of 2007 and served as the representative for Party Gaming co-founder Anurag Dikshit.

In December of 2008, Dikshit became the first online gambling mogul to face legal action in a U.S. Court when he agreed to forfeit $300 million in earnings from the company after admitting to breaking laws related to the Wire Act in conjunction with Party Gaming.  In exchange for the monetary settlement, Dikshit avoided jail time until at least December of 2010 and continues to reside in Gibraltar, where Party Gaming is based.  Dikshit stepped down from the Board of Directors in 2006 to serve as the company’s Head of Research and Special Projects.  There has been no announcement as of yet as to how Gomez’s departure will influence Dikshit’s influence on the Board.  Party Gaming can be found on the London Stock Exchange under the symbol “PRTY.”  It is the parent company of the popular online poker site PartyPoker.

Gomez’s resignation is just the latest in a long list of changes for Party Gaming this year.  The company’s purchase of World Poker Tour Enterprises (WPTE) in August as well as numerous business-to-business ventures like the purchase of the online bingo company Cashcade and the launch of an Italian online poker site in tandem with Intralot have headlined a busy 2009 for Party Gaming.  In its mid-year financial report, Ryan said the company would continue to pursue these profitable business-to-business deals and invest more time and effort in Party Casino, its online casino business.

In the week following Gomez’s announcement, PRTY shares have seen a slight drop in value, falling from a high of $282 on September 23rd to a low of $263.80 towards the end of day on the 24th.  At the close of the business day on Friday, shares were trading at $267.60. Despite the slight drop this week, Party Gaming stocks have been on a rise as a whole in 2009, increasing in value from $195 in January to a high of $283 in May to its current trading price of $267.60.

More Guilty Pleas in BetOnSports Case

Neil Scott Kaplan, Lori Kaplan-Multz, and Penelope Tucker have all pled guilty to U.S. District Court Judge Carol E. Jackson, according to an article published by Bloomberg on Tuesday. Now, BetOnSports Founder Gary Kaplan faces trial on September 21st.

Former BetOnSports Chief Executive Officer (CEO) David Carruthers pled guilty in April and faces up to 33 months behind bars. Carruthers’ sentencing is scheduled for October. A statement released by iGamingNews at the time noted that Carruthers planned to cooperate against others who were still being held by the U.S. Department of Justice. Now, only Kaplan remains. The other defendants pled guilty to “racketeering conspiracy and the illegal transmission of bets,” according to Bloomberg.

Kaplan was arrested in the Dominican Republic in March of 2007. An article published by BBC News two years ago noted that BetOnSports reaped 95% of its profits from U.S. residents and exited the market in August of 2006. That October, the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law by then-U.S. President George W. Bush. The measure prohibited the transfer of funds from banks and other financial institutions to illegal internet gambling outfits, although it failed to specify what activities were permissible. The regulations of the UIGEA were approved as “midnight rules” in November and implemented on January 19th, one day before President Barack Obama took office. The financial services industry must come into full compliance with the UIGEA by December 1st.

Carruthers was kept under house arrest in St. Louis after being picked up by U.S. authorities in Texas in 2006. According to Bloomberg, Kaplan faces charges of “racketeering conspiracy, mail fraud, and wire fraud.” His brother, Neil, told Judge Jackson, “Having seen my brother’s companies advertised openly on billboards in New York and other places, I believed his company was lawful.” His sister, Lori, pled guilty to “racketeering conspiracy and the illegal transmission of wagers,” according to the U.S. news outlet.

The St. Louis Post-Dispatch noted that Neil, Lori, and Tucker each will fork over money held in Swiss bank accounts as part of the agreement. The former two will spend time in a halfway house, but not be imprisoned for soliciting U.S. customers. Tucker will receive a one year probation and pay $15,000. The Post-Dispatch explained, “Assistant U.S. Attorney Steve Holtshouser said the sentences reflect the minimal roles that Neil Kaplan and Kaplan-Multz played, their lack of decision-making power there, and their willingness to surrender their BetOnSports money.”

Party Gaming entered into a non-prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York in April. As part of its agreement, the company agreed to pay a $105 million fine over a three and a half year period. In December, one of its co-founders, Anurag Dikshit, admitted to violating the Wire Act of 1961 in a New York courtroom. He faces up to three years behind bars and will be sentenced later this year. Dikshit is in the process of paying a $300 million fine. Forbes noted that Dikshit has a net worth of $1 billion and currently resides in Gibraltar. He developed the client software for Party Gaming, which owns and operates PartyPoker.

Also in the background of today’s developments is the seizing of over $30 million in online poker payment processor funds by the U.S. Attorney’s Office for the Southern District, which is the main office charged with handling financial crimes. No legal action has yet been filed in the case. Poker Players Alliance Chairman Alfonse D’Amato, appearing on Fox Business, explained, “It is not illegal for a person to play poker on the internet. What the [UIGEA] did was say that the payment processors, the financial community, could not distribute these funds.”

No indication was given as to what Kaplan’s future now holds.

European Commission: US in Violation of WTO over Internet Gambling

As a result of a complaint filed by the Remote Gambling Association (RGA), the European Commission has found the United States to be in violation of its World Trade Organization (WTO) obligations due to its stance on internet gambling.

According to a statement posted on the European Commission’s website, “The report concludes that the U.S. measures constitute an obstacle to trade that is inconsistent with WTO rules. As a result, WTO proceedings would be justified.” However, the Commission may elect to forge an agreement with the Obama Administration rather than pursue WTO action. The RGA represents a bevy of European internet gambling companies, many of which are traded on major stock exchanges in London and Vienna. Its member roster includes Party Gaming, 888, Ladbrokes, Sportingbet, and Playtech, which owns and operates the popular iPoker Network.

The 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) drove publicly traded internet gambling sites out of the U.S. market in deference to shareholder interests. However, U.S.-based sites that permit online wagering on horse racing were allowed to flourish. In addition, sites like PokerStars and Bodog, which are not publicly traded, continued to solicit customers from the North American nation. The Commission’s final report assessed, “There are serious adverse effects for the E.U. They include revenue and stock market value lost by affected companies as a result of their absence from the U.S. market and also the threat of serious sanctions hanging over them that affect their normal operation outside of the U.S.”

The European Commission’s investigation was launched in March of 2008. In the end, its report outlines many of the ambiguities and shortcomings of the UIGEA, including the lack of a definition of “unlawful internet gambling” and the propensity of credit card companies and other payment processing companies to “overblock.” The latter has taken center stage in North Dakota and New Hampshire, where legal online lottery purchases have been stunted by UIGEA regulations. Moreover, the report dives into the specifics of the Professional and Amateur Sports Protection Act (PASPA), which allows sports betting in several U.S. states, including Delaware and Nevada. In total, the European Commission report spends countless pages assessing convoluted U.S. gambling laws.

As a result of withdrawing from the U.S. market, the stock price of publicly traded internet gambling companies took a nosedive. Party Gaming, 888, and Sportingbet lost 75% of their value for a sum of ?5.7 billion between January of 2006 and October of 2006. In addition, bwin, which is traded in Vienna, lost €120 million as a result of exiting the U.S. market. In December of 2008, Party Gaming Co-Founder Anurag Dikshit admitted to violating the Wire Act of 1961 in a New York courtroom. On the same day as Dikshit’s agreement was struck, shares of Party Gaming shot up 27%. According to the Commission, the increase is evidence of how “uncertainty created by the [Department of Justice] investigations is affecting the business prospects of E.U. remote gambling and betting companies.”

Safe and Secure Internet Gambling Initiative spokesperson Michael Waxman told Poker News Daily, “We hope that members of Congress are paying attention to all of these very compelling arguments about why regulation is needed. We hope that, following Congressman Barney Frank’s leadership, members of Congress will start paying attention and move in support of regulation.” Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267) outlines a comprehensive regulatory environment for the internet gambling industry in the United States. It was introduced on May 6th and is up to 30 co-sponsors.

On the future of the European Commission’s activities, a recent Wall Street Journal article noted, “The E.U. said Wednesday it would hold off on filing a formal complaint in hopes of negotiating some sort of solution with the Obama Administration.”

iMEGA Sends Letters to Minnesota Internet Service Providers

In the wake of the order by the Minnesota Department of Public Safety to 11 internet service providers (ISPs) calling for the blockage of 200 internet gaming domain names, the Interactive Media Entertainment and Gaming Association (iMEGA) has struck back.

iMEGA sent a letter of its own to ISPs, which states, “iMEGA wants you to know that it believes that the Notice lacks any legitimate foundation in the law and requests that you not block access to the websites identified.” The Department of Public Safety charged that ISPs were in violation of the Wire Act of 1961, which has traditionally applied to online sports betting. Nevertheless, USA-friendly online poker sites such as Bodog, Full Tilt Poker, and Players Only were among the 200 affected. Also coming under fire were a number of online poker rooms that do not accept U.S. customers, such as Everest Poker, Titan Poker, and CD Poker. The former is even the on-felt sponsor of the 2009 World Series of Poker (WSOP) in Las Vegas, which begins later this month from the Rio.

iMEGA asserts that the Wire Act “simply does not apply to website operators and imposes no duty upon you to comply with the Minnesota Department of Public Safety’s request.” The question of whether multi-faceted companies such as Verizon and Comcast, which offer residential home telephone service, high-speed internet, and cable television, constitute “common carriers” as outlined by the Wire Act was also addressed. To answer it, iMEGA quoted a Congressional statement: “It is the policy of the United States… to preserve the vibrant and competitive free market that presently exists for the internet and other interactive computer services, unfettered by Federal or State regulation.”

iMEGA charges that the Minnesota Department of Public Safety is overstepping its bounds, noting that ISPs have been asked to “block access to certain websites by your Minnesota end-users even though these websites are not located within Minnesota.” The trade organization also warns that, prior to blocking a site, ISPs must provide written notice to their customers of any service changes. The letter questions whether the Department of Public Safety’s request entails a violation of the Commerce Clause of the United States Constitution or a “blatant” trampling of First Amendment rights.

For ISPs that are unfamiliar with the internet gambling industry in the United States, iMEGA’s letter points out, “The Notice shows evidence of selective enforcement insofar as the list of websites identified is not exhaustive. The website list is also inaccurate insofar as it lists some websites that are not accessible by Minnesota end-users and other websites that are defunct.” In addition, it questions why Time Warner Cable, which provides internet services to Minnesota residents, was not among the 11 companies that received notices.

John Fleischaker of Dinsmore and Shohl LLP’s Louisville office sign the letter. ISPs were expected to respond within two to three weeks of receiving the Minnesota Department of Public Safety’s notice. In addition to the aforementioned online poker sites, the casino arms of Ladbrokes and Party Gaming are also listed; publicly traded companies on the London Stock Exchange own both sites. Party Gaming yanked its online poker site, Party Poker, from the U.S. market shortly after the 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA). The company has even signed a non-prosecution agreement with the U.S. Government. One of its co-founders, Anurag Dikshit, admitted to violating Federal law and is in the midst of paying a $300 million fine.

Today, Congressman Barney Frank (D-MA) introduced legislation outlining a comprehensive licensing and regulatory framework for the internet gambling industry that focuses on consumer protections. In addition, the Massachusetts lawmaker and Chairman of the House Financial Services Industry introduced legislation to delay the implementation of UIGEA regulations by one year to December 1st, 2010.

List of 200 Banned Internet Gambling Sites in Minnesota Released

The list of 200 internet gambling sites that have come under fire by the Minnesota Department of Public Safety has been released. Many of the websites identified do not accept players from the United States, leaving leaders in the industry scratching their heads.

Headlining the contingent of targeted sites is Party Casino, which is owned by the same publicly traded parent company as its online poker room counterpart, Party Poker. Neither accepts U.S. players and to complicate matters further, Party Gaming, which can be found on the London Stock Exchange under the symbol “PRTY,” recently reached an agreement with the U.S. Department of Justice admitting to Wire Act violations similar to one struck by company co-founder Anurag Dikshit in December. Party Poker is not on the list. Also appearing is PokerRoom, which shut its doors earlier this month along with sister site CasinoRoom (which is also on the list) and funneled customers to bwin.

Bodog appears on the list as “BoDog.com,” but the corresponding URL points to its casino arm. Bodog accepts players from the United States, as does Full Tilt Poker, whose domain is officially under fire by the Minnesota Department of Public Safety. Cake Poker Network site Players Only also is part of the group of 200 affected sites. Notably absent are PokerStars, Ultimate Bet, Absolute Poker, Lock Poker, Carbon Poker, Doyle’s Room, and Cake Poker. No informational or forum sites appear to be targeted at the moment. The list spans genres such as online poker, online casinos, and online sports books.

The Action Poker Network’s flagship site appears on the list, as does Titan Poker, one of the largest sites on the massive iPoker Network. Neither site accepts U.S. players. Fellow iPoker Network site Betfred’s future may now be in jeopardy, as is the longevity of Microgaming site Betway. iPoker Network sites CD Poker, Mansion Poker, and Noble Poker all appear on the list of 200 sites. One of the most visible rooms to find itself in hot water is Everest Poker, which is the official sponsor of the 2009 World Series of Poker (WSOP), which kicks off next month from the Rio in Las Vegas. This is Everest Poker’s second year as the spectacle’s presenting sponsor. Its logo will don WSOP felts and also appear in signage at the Rio.

Other websites that have been flagged by the Minnesota Department of Public Safety include Gnuf, Golden Palace, Hollywood Poker, and InterTops Casino, which actually appears twice on the list. Publicly traded company Ladbrokes’ online poker site, despite not accepting U.S. players, is on the list, as are PokerRoom School, River Belle, and Spin Palace. Crazy Poker’s dot com and U.K. domain names are both listed. According to Alcohol and Gambling Enforcement Division Director John Willems, the list of 200 sites was drawn “randomly” without regard to the type of internet gambling employed.

The Interactive Media Entertainment and Gaming Association (iMEGA), which has been at the forefront of the fight for the industry in Minnesota, was puzzled by the final list distributed by the Department of Public Safety. Joe Brennan, its Chairman, commented in a press release on the organization’s website, “We question how much thought was put into the selection of these sites. To propose censoring Minnesota residents’ Web access and not to know which sites are even in the U.S. market makes me wonder just how seriously the Department of Public Safety is taking this action. It comes off as a half-baked attempt at intimidation rather than thoughtful enforcement.”

The ISPs that received notice have up to three weeks to respond. They include some of the largest telecommunications corporations on the planet: Verizon, AT&T, Qwest, and Direct TV, just to name a few. The letter sent to each ISP reads, “We are therefore requesting these enterprises not be allowed to transmit gambling information to your Minnesota customers.” The letter also states that the Federal Communications Commission (incorrectly labeled as “Federal Communication Commission”) received a copy. Each gambling site is listed alongside its IP address and telephone number, although the latter is not present for every site on the list. The Department of Public Safety is also calling for telephone access to be blocked where appropriate.

View the entire list of 200 internet gambling sites in jeopardy in Minnesota.

Former PartyGaming CEO Hired By Harrah’s

On Sunday, the London Times sent shockwaves through the land based casino industry as well as the internet gaming world with a small article regarding the recent actions of one of the largest casino operations in the world and a former online gaming CEO.

It was announced in the Sunday Times Online that Harrah’s Entertainment – responsible for much of the casino action in not only Las Vegas but the United States as a whole and the owner of the World Series of Poker – and former PartyGaming PLC CEO Mitch Garber have entered into an agreement for Garber to join the organization. What isn’t known is what capacity Garber will have within Harrah’s or what effects it will have on the World Series itself.

Garber, who resigned as the CEO of PartyGaming in early 2008, is thought to be taking a leading role in a reorganization of Harrah’s online operations into a stand alone company that will also encompass the WSOP. After several recent developments in the online gaming world, it is believed that Harrah’s is envisioning that the legalization and regulation in the United States will happen soon and wants a qualified leader to be able to run the resulting operation. With Garber, Harrah’s has landed such a leader.

Garber led PartyGaming through much of its tumultuous last few years after the passage of the Unlawful Internet Gaming Enforcement Act (UIGEA) and the resulting move of PartyGaming to pull out of the American market. While with PartyGaming he focused on international expansion through product diversification and a series of mergers and acquisitions. These efforts helped PartyGaming to absorb the losses of the American market with little effect on PartyGaming’s bottom line.

There are different theories as to if, and/or when the legislative mood regarding online gaming in the United States will be changing. In a recent interview with The Hill, Massachusetts congressman Barney Frank, the chairman of the powerful House Financial Services Committee, stated that he plans to introduce internet gambling legislation after the Easter recess. The Hill noted that the week of April 20th is a likely time frame for the bill’s introduction and that it would create a complete licensing and regulatory framework for the internet gambling industry.

This line of thought is tempered by the current economic and political climate in the United States, though. With the ongoing financial crisis affecting not only the U. S. economy but the situations of most nations worldwide, many believe that the legalization and regulation of online poker and gaming is far down the list of priorities of the U. S. Congress and the Obama Administration. Although the taxation dollars from the online gaming industry - which garners an estimated $12 billion yearly - would be helpful to the American government, other more lucrative financial moves are expected to be implemented first.

Gary Loveman, CEO of Harrah's Entertainment, has said online poker's legalization is a strong possibility in the United States and recent activities regarding online poker operators have demonstrated that the winds may be changing. In December, former PartyGaming founder Anurag Dikshit pled guilty to violations of the 1961 Wire Act and paid a $300 million fine. Just last week, Garber’s former company PartyGaming also settled their grievances with the U. S. Department of Justice, agreeing to a non-prosecution arrangement and payment of a $105 million fine over the next three years.

With the hiring of Garber to run the online operations of a newly created branch of Harrah’s and – if online poker is a part of that operation – the WSOP, it does appear that Harrah’s is preparing for the day when online poker and gaming will be legal in the United States. Whenever that day may be.

iMEGA Will File Kentucky Supreme Court Brief by June 1st

On April 2nd, the Kentucky Clerk's Office approved the Commonwealth’s brief in a case that pits the state against owners of 141 internet gambling domain names. The approval means that the Interactive Media Entertainment and Gaming Association (iMEGA) must file its brief to the Kentucky Supreme Court by June 1st.

The timeline is setting up a summer showdown in the United States between the organization and the Kentucky Justice and Public Safety Cabinet. In January, the Kentucky Court of Appeals ruled by a two to one margin that the State lacked jurisdiction to seize and force the potential forfeiture of 141 internet gambling domain names, including those belonging to online poker sites such as PokerStars and Full Tilt Poker. The industry originally received word of the forfeiture back in September.

Although Commonwealth attorneys originally asked for more space to outline their discord or more time to pare the document down, the final brief weighed in at 50 pages, which is the maximum number allowed by law. The State’s brief opens, “Wagers are accepted in an unregulated underworld without effective age verification, identification, or financial accountability… Persons can instantly wager and lose retirement savings or college funds in secrecy.”

The State also notes that internet gambling may be cutting into its revenues for legalized forms, including horse racing. The city of Louisville is just three weeks away from playing host to the annual Kentucky Derby, which is held on the first Saturday in May. The spectacle takes place at Churchill Downs and brings in an extensive amount of revenue to the state’s economy. The Commonwealth’s brief claims that 2,500 “unregulated sites” solicit U.S. customers. They include 1,083 online casinos, 592 sports books, 532 online poker rooms, 224 Bingo sites, 49 skill game websites, 30 betting exchanges, 25 lotteries, and 17 backgammon sites. These figures are sourced from a Casino City study in 2006.

The brief also gives a lengthy history of arrests and admissions of guilt in the internet gambling industry. Commonwealth attorneys alluded to Party Gaming Co-Founder Anurag Dikshit’s $300 million settlement with the U.S. Government in December of 2008, decisions by ClearChannel and Infinity Broadcasting to cease running advertisements for online gambling sites in 2003, a $7.2 million settlement between Sporting News and the U.S. Department of Justice in 2006, and the arrests of the founders of Neteller.

The question of whether iMEGA and the Interactive Gaming Council (IGC) have standing to sue is also brought into light. The brief asserts, “IGC and iMEGA have refused to identify a single owner they seek to represent. iMEGA has even failed to identify any Domain Defendants its unidentified members claim to own. Appellant has no way to verify whether the associates have the authority to represent an actual entity claiming ownership interest in a domain.” Last March, Judge Mary L. Cooper granted iMEGA standing to sue to declare the Unlawful Internet Gambling Enforcement Act (UIGEA) unconstitutional. That case also currently sits in appeal.

In October, Judge Thomas Wingate did not overturn the seizure order by Kentucky Governor Steve Beshear. The decision prompted iMEGA and the IGC to file a petition for the state’s Court of Appeals to intervene. The organizations’ pleas were granted, setting up a December hearing in Louisville. In January, Judges Michelle Keller and Jeff Taylor agreed that the Commonwealth did not have proper jurisdiction to force the forfeiture of the 141 internet gambling domain names in question. Judge Michael Caperton submitted a dissenting opinion arguing that domain names are part of a much larger “gambling device,” a term that traditionally refers to physical objects like slot machines or roulette wheels found in an underground casino.

No date has been set for the Kentucky Supreme Court to hear the case. Stay tuned to Poker News Daily for the latest from the battle in the Bluegrass State.

PartyGaming Pays $105 Million Fine

PartyGaming has agreed to pay a $105 Million fine to the Department of Justice (DoJ) in order to avoid being prosecuted for having offered online gambling to American citizens. The fine is for the period before the UIGEA was put in place when PartyGaming were still active on the US gambling market.

When the UIGEA was passed PartyGaming decided to leave the US market and since then all of the games that PartyGaming are offering have been closed to US players. They are going to keep blocking the US and will not accept any customers from that part of the world, but after paying this fine they say that they are can now move on with their plans of buying other gambling portals.

The deal that was made with the DoJ is only valid for the company and not its founders. Anurag Dikshit is one of the four persons who founded PartyGaming and he has agreed to pay a $300 Million fine to the doJ. The other three founders are Russ De Leon, Ruth Parasol and Vikrant Bhargava has yet to agree to pay any fines so they are still risking prosecution in the USA.

Yesterday PartyGaming released their quarterly report that shows that the profit is down by 2% compared to the same quarter in 2008.

When the stock market closed yesterday the PartyGaming stock was up by 15.41% on the London Stock Exchange.

PartyGaming agrees to $105 million settlement

"The resolution of our position with the US authorities marks an important day for PartyGaming," CEO Jim Ryan said.  "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."

Essentially, the USAO will not prosecute PartyGaming or any of its subsidiaries, including PartyPoker, for providing internet gambling services to US customers prior to the enactment of the Unlawful Internet Gambling Enforcement Act in 2006.

PartyGaming has also accepted a Statement of Facts admitting they offered gaming services in the US from 1997 until 2006 and that certain transactions processed by third parties for PartyGaming were contrary to US laws of the day.

Under the terms of the agreement, PartyGaming has also agreed to stay out of the US internet gambling market under current legislation.

The $105 million settlement will be paid in semi-annual installments through September 2012, beginning with a $5 million payment April 10.

PartyGaming stopped allowing US players on its casino and poker sites when the UIGEA came into force in October 2006 and has been in talks with US authorities regarding the legality of its previous practices since 2007.

This past December, PartyGaming co-founder Anurag Dikshit also pleaded out to Wire Act charges regarding the companies activities and was sentenced to pay a $300 million fine.

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Party Gaming Settles Dispute With U. S. Attorneys

In a case that has been years in the making, it was announced this morning that Party Gaming PLC, the company that has been at the forefront of providing poker and casino services to Internet players, has entered into a non-prosecution agreement with the U.S. Attorney’s Office (USAO) for the Southern District of New York.

The agreement comes after months of discussions between the two parties about Party Gaming’s operations in the United States prior to the enactment of the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA). As part of the agreement, Party Gaming has accepted from the USAO an irrefutable “Statement of Facts” regarding its business activities prior to when the UIGEA was entered into law. Party Gaming, per the settlement, has agreed to pay $105 million over a three and a half year period that ends on September 30th, 2012. These payments will be due semi-annually and will come from the company’s existing financial resources.

As a part of the non-prosecution agreement, Party Gaming has admitted to offering online poker and casino games for real money to players in the United States from 1997 until October 13th, 2006, which was the day that the UIGEA was signed into law. The company also is conceding that transactions from customers in the U.S. intended for Party Gaming were processed by third parties and other gaming and payment-related companies, which is contrary to current U. S. laws.

According to the website Gaming Intelligence Group, this marks a new dawn for Party Gaming in the eyes of its CEO, Jim Ryan. Ryan states, “The resolution of our position with the U. S. authorities marks an important day for Party Gaming. 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.” The shareholders of Party Gaming stock on the London Stock Exchange appear to approve of the agreement, as its stock price as of press time has climbed 33 pence, or slightly over 13%, to 252 pence. The company is traded under the symbol "PRTY" in London.

This marks the close of Party Gaming’s disputes with the U. S. Government regarding its operations in the United States. Back in mid-December, Party Gaming co-founder Anurag Dikshit admitted to violating the Wire Act of 1961 in the Southern District Court of New York. The judge in that case, Jed Rakoff, did not immediately sentence Dikshit to jail time, which could have put the founder of PartyGaming away for up to two years. Instead, Rakoff scheduled sentencing for December 16th, 2010 with the posting of a $50 million bond. Dikshit has continued to cooperate in any online gaming investigations by the U.S. Government. It was also agreed that Dikshit would pay off a $300 fine million in three installments within months of the plea deal.

Party Gaming Settles Dispute With U. S. Attorneys

In a case that has been years in the making, it was announced this morning that Party Gaming PLC, the company that has been at the forefront of providing poker and casino services to Internet players, has entered into a non-prosecution agreement with the U.S. Attorney’s Office (USAO) for the Southern District of New York.

The agreement comes after months of discussions between the two parties about Party Gaming’s operations in the United States prior to the enactment of the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA). As part of the agreement, Party Gaming has accepted from the USAO an irrefutable “Statement of Facts” regarding its business activities prior to when the UIGEA was entered into law. Party Gaming, per the settlement, has agreed to pay $105 million over a three and a half year period that ends on September 30th, 2012. These payments will be due semi-annually and will come from the company’s existing financial resources.

As a part of the non-prosecution agreement, Party Gaming has admitted to offering online poker and casino games for real money to players in the United States from 1997 until October 13th, 2006, which was the day that the UIGEA was signed into law. The company also is conceding that transactions from customers in the U.S. intended for Party Gaming were processed by third parties and other gaming and payment-related companies, which is contrary to current U. S. laws.

According to the website Gaming Intelligence Group, this marks a new dawn for Party Gaming in the eyes of its CEO, Jim Ryan. Ryan states, “The resolution of our position with the U. S. authorities marks an important day for Party Gaming. 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.” The shareholders of Party Gaming stock on the London Stock Exchange appear to approve of the agreement, as its stock price as of press time has climbed 33 pence, or slightly over 13%, to 252 pence. The company is traded under the symbol "PRTY" in London.

This marks the close of Party Gaming’s disputes with the U. S. Government regarding its operations in the United States. Back in mid-December, Party Gaming co-founder Anurag Dikshit admitted to violating the Wire Act of 1961 in the Southern District Court of New York. The judge in that case, Jed Rakoff, did not immediately sentence Dikshit to jail time, which could have put the founder of PartyGaming away for up to two years. Instead, Rakoff scheduled sentencing for December 16th, 2010 with the posting of a $50 million bond. Dikshit has continued to cooperate in any online gaming investigations by the U.S. Government. It was also agreed that Dikshit would pay off a $300 fine million in three installments within months of the plea deal.

BetOnSports Ex-CEO David Carruthers Pleads Guilty

In breaking news out of St. Louis, former BetOnSports CEO David Carruthers has pled guilty to “federal racketeering conspiracy charges,” according to the Associated Press. He faces up to 33 months in prison and sentencing is scheduled for October 2nd.

According to a statement released by iGamingNews on Wednesday, “Mr. Carruthers agreed to not appeal provided that the sentence doesn't exceed 33 months, which is under the terms of the agreement, as well as to not engage in offshore gambling businesses during the time of supervised released or thereafter.” Carruthers also agreed to cooperate against BetOnSports founder Gary Kaplan and others still in custody.

Carruthers has been under house arrest since 2006 and even ran the St. Louis Marathon during his detention, posting a time of four hours, five minutes, and 27 seconds. He was originally detained in Texas while in transit from the United Kingdom to Costa Rica before being moved to St. Louis. According to the St. Louis Post Dispatch newspaper, despite believing that internet gambling and sports wagering may have been illegal in the United States under laws such as the Wire Act of 1961 and Unlawful Internet Gambling Enforcement Act (UIGEA), Carruthers “continued to advertise to U.S. customers that the company was 'legal and licensed' while 'furtively or covertly' collecting bets and paying out money owed to gamblers.”

Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan speculated as to why Carruthers would finally plead guilty, ending the three year ordeal. He told Poker News Daily, “Carruthers is a citizen of the United Kingdom and isn't a resident of the United States. He was a foreign national that had been detailed in transit. He went three years trying to make the best of a bad situation and wants to go home.”

In July of 2006, Carruthers was fired as CEO of BetOnSports. The company stated at the time, "Clearly, while he remains in the custody of the U.S. government, he is unable to perform his duties.” In August of that year, the company vacated the U.S. market entirely, two months prior to then-President George W. Bush signing the SAFE Port Act and its accompanying UIGEA rider into law. Brennan noted that while BetOnSports was navigating its future business plans, Carruthers was still held up in Missouri: “The U.S. Government won a war of attrition. He's an older guy who hasn't been home in three years. He was under house arrest with no trial.”

The admission of guilt comes on the heels of a plea bargain made by former Party Gaming Co-Founder Anurag Dikshit in a New York court room last December. Dikshit agreed to pay $300 million over three installments and faces up to two years in prison. However, his sentencing has been delayed until December of 2010. Comparing the two high profile internet gambling proceedings, Brennan explained, “Carruthers' case is obviously more severe than Anurag's, who is free to go wherever. It's disappointing to see a guy who has been standing on his principles beaten down enough to forge a plea.”

Visiting BetOnSports.com from the United States yields the text, “This website does not accept wagers on sports or sporting events from persons in the United States. It is a violation of United States Law to transmit sports wagers or betting information to this website from the United States.”

We'll have more for you on this breaking story has it develops right here on Poker News Daily.