WILL PARTY AND 888 HAVE TO PAY THE U.S. PIPER?

17 August 2007

UK financial site reports that American enforcers may impose a heavy price for legality

The British financial news site ThisIsMoney.co.uk is reporting that unidentified sources have speculated that the US Department of Justice could try to recoup all profits made by online gambling groups 888.com and Party Gaming.com in the United States prior to their exit following the passage of the Unlawful Internet Gambling Enforcement Act.

The site estimates that this could amount to nearly $900 million (£445m) in the case of PartyGaming and $120 million for 888.

Such a disgorgement would severly hamper the companies' financial viability, but it is by no means certain that they would be prepared to pay such a high price, the journal opines, revealing that sources close to both companies said neither would be prepared to sign a blank cheque which could effectively put them out of business overnight.

One alternative may be a shared disgorgement by both the companies and the principal founders and owners, to whom large dividends constituting the bulk of the profits have apparently been paid. PartyGaming has allegedly paid 90 percent of its US profits in dividends and 70 percent, it is claimed, went to the founding shareholders, who still own large stakes in the business.

The two companies were reported earlier this year to have been in discussions with Department of Justice officials (see previous InfoPowa reports)

Online Casino News courtesy of InfoPowa