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PartyPoker Leaves the US Market

PartyPoker Leaves the US Market

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October 2006

The day that the Safe Harbor Act and its UIGEA addition went into passing could be considered as D-Day for Party Poker. Before that, Party Gaming PLC’s poker arm party Poker was the strongest, biggest and most dominant online poker outfit in the world, and boasted of having the most players and the most in ring game revenue than all the other internet sites at the time. After the passing of the UIGEA, Party Poker chose to leave the US market and lost a lot of value on the London Stock Exchange.
As we already know from a previous article, the UIGEA was attached as an unrelated bill to the Safe Port Act of 2006. How it passed, as in how low and scum-baggy the method was, does not matter now.

Party Gaming PLC. has been publicly traded on the London stock exchange since about 2005. Its primary shareholders Ruth Parasol, Anurag Dikshit, Vikrant Bhargava and Russ DeLeon, collectively sold about 23% of their shares to take the company public on the London Stock exchange. The foursome made a ton of money in the process, as the initial offer price of 116p per share (£4.64 Billion / $ 8.46 Billion total value) rose within a month to take the value of the company above $12 Billion.

After the passing of the UIGEA on September 29, 2006, many things went down successively. First, on October 2nd 2006, PartyGaming announced that it would "suspend all real money gaming business with US customers" due to the passing of the UIGEA. George W. Bush signed it into law on October 13th. PartyGaming immediately suspended offerings of real-money games to any U.S. Players. Those who played with play-money were not affected. As a result of this passing, the volume of player traffic decreased considerably since that day. Also, PartyGaming’s publicly traded stock declined in value by more than 70% in less than 24 hours after this law was signed. The company was moved from the FTSE 100 to the FTSE 250 Index on October 11.

After all this went down, with only its rest-of-world clientèle to hang on to, Party Gaming did an admirable job of remaining afloat, and slowly but surely gained back ground in the online poker world. Its player volume, while not comparable with pre-UIGEA levels, remains comparatively strong. The only other sites with even more players online at any one time are PokerStars and Full Tilt Poker, both of which remained accessible to American online poker players.

But recently, Party Gaming has been making moves to come back into the U.S. market. In April 2009 the company made a settlement with the United States government where they agreed to pay a penalty of $105 million over the next four years as part of a “non-prosecution agreement.” As part of the deal, Party put its name to a “statement of facts” in which it admits for the first time that, before October 2006, it had targeted US citizens, resulting in the processing of transactions that were “contrary to certain US laws.”

In layman’s terms, the settlement was about the US Attorney's Office for the Southern District of New York agreeing to not prosecute PartyGaming or its subsidiaries for providing Internet gambling services to customers in the US prior to George W. Bush's tight vice grip on online gaming by his signage of the UIGEA into law on October 13th 2006.

PartyGaming will in return pay $105m (£71.3m) in half-yearly installments by September 2012. This means that PartyGaming (and by extension, Party Poker) has no outstanding legal issues with any American law enforcement agency nor the American government. When, or if the Online Poker business may safely return to the U.S. in the form of regulated gambling, Party Poker will be more than ready and willing to take all its old U.S. customers back and welcome new ones with open arms.

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