PARTYGAMING ENTERS TALK WITH US AUTHORITIES

[clevfan]

PartyGaming enters talks with US authorities
By Maggie Urry
The Financial Times UK

Published: June 4 2007 10:38 | Last updated: June 4 2007 10:38

PartyGaming, the internet gambling group, on Monday said it had initiated talks with the US justice authorities as analysts speculated that the US government may be preparing to relax last year’s clampdown on online betting.

However, the company said it could not yet assess “the likelihood of any particular outcome of these discussions”.

888 Holdings, another internet gaming group, was considering making a statement later in the day about its position.

The talks come as pressure builds in the US for reform of earlier legislation banning internet gambling.

Analysts speculated that the talks suggested PartyGaming thought it could come to an agreement with the US Department of Justice to end the uncertainty which has clouded the industry over the legal position of online gaming in the US since the introduction of the Unlawful Internet Gambling Enforcement Act in October.

“Why would PartyGaming do this unless it believed it had a very high chance of a favourable outcome?” said one analyst.

Analysts pointed to rival Sportingbet’s deal with the State of Louisiana in March when warrants for Peter Dicks were dropped and the company made a reported payment of $400,000 to settle the case against its former chairman.

They said they thought PartyGaming would expect to be reasonably confident of being able to agree a financial settlement that would not be too onerous.

There appears to have been a change in sentiment in the US since last October when the government passed the Unlawful Internet Gambling Enforcement Act which outlawed online gambling. Since then there have been fears that online gambling rather than stopping has gone underground.

PartyGaming stopped any US based customers having access to its website when the act was passed but there is still uncertainty over the legal position on online gaming before the Act was passed, a risk PartyGaming highlighted in its prospectus when it floated two years ago.

When the Act was passed, PartyGaming lost three-quarters of its customers who were US-based and its share price plunged along with those of other companies in the sector.

Richard Carter, analyst at Numis Securities, said in a note to clients, “there now appears a willingness on behalf of the US Attorney’s Office to settle and draw a line under the uncertainty caused by recent DoJ actions towards online gaming companies that participated in the US prior to the enactment of the UIEGA”.

There has been some recovery in share prices in recent months as speculation mounted that the mood in the US was changing. Partygaming shares, which slumped to 25½p following the US ban, have recovered in recent months. On Monday morning fell 0.5 per cent to 41p.

The uncertainty has made PartyGaming unattractive to potential bidders, but if it were removed, analysts said, an approach could come from companies such as MGM or Harrah’s. Alternatively, a recovery in PartyGaming’s share price might allow it to make bids for other companies as the sector consolidates.

Also if the US did change the law to allow online gambling again, a settlement with the Department of Justice would permit PartyGaming to return to the market.

[clevfan]

PartyGaming Holds Talks With U.S. Justice Department (Update1)

By Neil Craven

June 4 (Bloomberg) -- PartyGaming Plc, the world's biggest Internet poker company, said it has held discussions with the U.S. Department of Justice relating to its activities prior to October last year, when the country outlawed Internet gambling.

The Gibraltar-based company is ``voluntarily'' responding to a request for information from the U.S. Attorney's Office for the southern district of New York, PartyGaming said in a statement, adding that it's too early to say what the outcome will be.

Online gambling industry executives were arrested in the U.S. last year after the country's government cracked down on Internet betting. David Carruthers, then chief executive officer of Betonsports Plc, was detained in July. Peter Dicks was arrested in September, when he was chairman of Sportingbet Plc.

``If PartyGaming can positively resolve this it will be good news for the share price,'' because anxiety about legal issues has been ``holding up potential M&A activity,'' said Julian Easthope, an analyst at UBS AG in London. Potential acquirers and lenders are concerned about possible future legal action or costs related to past activity in the U.S., Easthope said.

Shares of PartyGaming were unchanged at 41.5 pence as of 9:23 a.m. in London. They've gained 37 percent in the past six months after losing more than half their value on the first trading day after the law was passed by Congress. PartyGaming lost about three-quarters of its revenue when President George W. Bush signed a law aimed at shutting down U.S. online gaming.

Ladbrokes, 888

Analysts have said Ladbrokes Plc's discussions to buy Web gaming company 888 Holdings Plc were called off because of concern about legal risks after a U.S. crackdown on Web gambling last year. Discussions had also been held between PartyGaming and 888, people familiar with the situation have said.

The discussions with U.S. legal authorities follow ``some uncertainty as to what actions, if any, U.S. law enforcement agencies may take against'' Internet gaming companies following last year's arrests, PartyGaming said. The company exited its U.S. business after the law was passed.

Since then, some U.S. lawmakers have proposed loosening online gaming legislation. In April, representative Barney Frank, the Democratic chairman of the House Financial Services Committee, introduced legislation that would relax the ban by allowing online gambling in the U.S. with licensed operators.

[clevfan]

Partygaming confirms it is in discussions with US Department of Justice

gibfocus - 4th June 2007
(2007-06-04 12:30:00 )

Partygaming, a locally based internet based gaming company has confirmed tha it is in discussions with the US Department of Justice

A spokesperson for the company today stated that "as highlighted in the Company’s annual report, upon enactment of the Unlawful Internet Gambling Enforcement Act (the “UIGEA”) on 13 October 2006, the Company stopped customers in the US from playing or making deposits on any of the group’s real money sites. The Company believes that online gaming should be offered by regulated, reputable operators and that this remains the right approach to this industry sector. Following enactment of the UIGEA, actions have been taken by certain US law enforcement agencies with respect to third parties that had previously been involved in the online gaming sector in the US. This has created some uncertainty as to what actions, if any, US law enforcement agencies may take against industry participants, based on activity in the US prior to 13 October 2006.

"Against this background, the Company initiated discussions with the United States Attorney’s Office for the Southern District of New York and is in the process of voluntarily responding to a request for information issued by that office. It is too early to assess the likelihood of any particular outcome of these discussions.

"A further announcement will be made if and when appropriate."

[WrongSideWarrior]

Sounds good...

Where do you guys see this going and how long do you think it would be until Party opened back up for the US?

[Minnow]

Just sounds like more of the same bs to me..

[StarnetGypsy]

"voluntarily responding to a request for information from the U.S. Attorney's Office"

DOJ is sure collecting a nice little database of gamblers ... think they'll open their own poker room?

[Highwayman]

Originally Posted by StarnetGypsy

"voluntarily responding to a request for information from the U.S. Attorney's Office"

DOJ is sure collecting a nice little database of gamblers ... think they'll open their own poker room?

Yep, forming the foundation for licensing, regulation and taxation.




.

[skilled27]

sounds good gamblers. this really sounds good.

[drunkguy]

Originally Posted by WrongSideWarrior

Sounds good...

Where do you guys see this going and how long do you think it would be until Party opened back up for the US?

over 17.5 years -150

[Dell Dude]

Originally Posted by skilled27

sounds good gamblers. this really sounds good.

I read that as Feds shaking Party down as in you give us money and we won't prosecute. Party Poker is pathetic in my humble opinion. It's bad enough they folded like a tent as soon as UIGEA passed. But if I'm right and they are going to buy themselves out of jail, they just screwed every other offshore gambling company because the Feds will go after them next.

Pokerstars is all we need anyway.

[skilled27]

Stock price moving up in recent months could mean some hard hitting investors got inside info and think that US may be moving back into to Party Gaming.

It really would not surprise me to see a complete 180 on the US stance with gambling. Horse betting is still completely legal. Stopping gambling is way down the to do list for the government. The way the UIGEA passed was a joke and it wont hold. Gambling is not viewed as a terrible thing like say drugs. To most people anyway.

[Highwayman]

Originally Posted by Dell Dude

I read that as Feds shaking Party down as in you give us money and we won't prosecute. Party Poker is pathetic in my humble opinion. It's bad enough they folded like a tent as soon as UIGEA passed. But if I'm right and they are going to buy themselves out of jail, they just screwed every other offshore gambling company because the Feds will go after them next.

Pokerstars is all we need anyway.

It's bad enough they folded like a tent as soon as UIGEA passed.

Perhaps a responsible business decision on their part...unlike those continuing to service Americans in disrespectful circumvention/violation of U.S. law.



.

[drunkguy]

Originally Posted by skilled27

Stock price moving up in recent months could mean some hard hitting investors got inside info and think that US may be moving back into to Party Gaming.

It really would not surprise me to see a complete 180 on the US stance with gambling. Horse betting is still completely legal. Stopping gambling is way down the to do list for the government. The way the UIGEA passed was a joke and it wont hold. Gambling is not viewed as a terrible thing like say drugs. To most people anyway.

no way


they can't go back now. They are going to make it legal offshore and illegal for US companies? That makes zero sense. If anything they would do the reverse, allow Harrah's etc to run online poker and try to keep foreign companies out of it like they do for horseracing.

and for whatever people want to say about UIGEA, I have been having a hell of a time trying to get money offshore and I am way more motivated and knowledgable about how to do it than the vast majority of the public. If I am having trouble getting money offshore, that means JOE PUBLIC has about zero chance of doing it.

And even if they do manage to get poker through due to some amazing change in public policy and all the bible-thumbers and protect-the-children clowns somehow disappearing from the political scene, sportsbetting is going to be way, way farther off.

[Dell Dude]

Originally Posted by drunkguy

and for whatever people want to say about UIGEA, I have been having a hell of a time trying to get money offshore and I am way more motivated and knowledgable about how to do it than the vast majority of the public. If I am having trouble getting money offshore, that means JOE PUBLIC has about zero chance of doing it.

Just send coin to Karl "The Fresh" Prince of Antigua like I do every week via moneygram.

[skilled27]

highway, what they said in the article was that a US company like Harrah's would buy party gaming if the law was reversed. Party Poker has the name recognition factor that makes it so attractive if the law was reversed. I'm saying if they changed the law (which is obviously what some big investors are thinking) Harrahs would simply buy party gaming and advertise it fully and legally inside the US.

Other US companies would most definately enter the market but whoever bought party gaming would have a big head start.

[StarnetGypsy]

Originally Posted by Highwayman

Perhaps a responsible business decision on their part...unlike those continuing to service Americans in disrespectful circumvention/violation of U.S. law

Prettymuch HiWay. Because they pulled out prior to UIGEA taking effect, they in essence haven't 'broken' the law, and would gain favor coming back to US-facing should the heavens open and rain poker chips. If any company besides the Vegas crews has a chance to re-establish here, it's Party.

oh yeah, and it's noteworthy that PartyGaming is allowed to advertise at the WSOP on their table felts.