PartyGaming Gets Hosed By US Government
Just how badly has the online betting firm PartyGaming fared in its attempt to gain a foothold on US soil and get a piece of the pivotal online gambling market that once represented more than 70 percent of its player base?
Consider this: Since settling with the United States government, Party has been ordered to pay out $105 million whereby it was announced just yesterday (Monday, September 20, 2010) that its competitor Sportingbet would be paying a mere portion of that amount: $33 million to be exact.
“That is nearly 4 times the amount Sportingbet is being asked to pay,” stated Aaron Goldstein, Chief Business Reporter for Gambling911.com. “And Sportingbet committed what US officials deem a cardinal sin, taking sports bets. Party didn’t even do that.”
Legal counsel for Sportingbet Stuart Slotnick told Gambling911.com late Monday: “The market will look at the number positively. It is a great settlement and Sportingbet can now move forward without fear of prosecution.”
The market did look at the deal favorably. Sportingbet’s share price rose a whopping 12 percent Tuesday following the news, from 8.5p to 78.5p, resulting in a current company value of £400m.
That alone is enough to make PartyGaming shareholders cower.
Just a few weeks back, Party stole everybody’s thunder when they announced plans to merge with Austria’s largest Internet sports betting firm, bwin.
Great news, eh?
Not so fast. Immediately following this announcement, the Commonwealth of Kentucky decided it too wanted a piece of the pie and named PartyGaming along with Tiltware, the parent company of Full Tilt Poker, to its lawsuit claiming the company basically targeted vulnerable state residents.
If past trends are any indication, PartyGaming will probably attempt to settle with the Commonwealth, which essentially goes against what was a cohesive industry effort to fight those political powers. So far, Party has given no indication as to their game plan on that front.
Not that Sportingbet is completely out of the woods when it comes to statewide efforts to prosecute.
Washington State and Louisiana come to mind. Washington is the only state that makes betting on the Web a Class C felony while Louisiana has already issued an arrest warrant for one Sportingbet executive back in 2006. While that case was eventually settled, Louisiana made it clear there were other outstanding arrest warrants, none of which were made public.
Slotnick admitted to Gambling911.com that “the states can still prosecute” but added federal officials would bring this week’s settlement agreement to the state’s attention.
Whether federal officials have approached Kentucky remains to be seen.
Christopher Costigan, Gambling911.com Publishe
