The former heavyweight of the poker world, PartyPoker.com, has not been knocked out yet. The parent company of the online poker site, PartyGaming Plc, has announced a deal with the United States in which they agree to pay $105 million over the next three years. In return they will be given immunity from being charged with breaking US law during the time they allowed real money players from the US.
This move has been anticipated for some time now and many believe it to be a strategical action by PartyGaming to set themselves up in the good graces of the United States should online poker be regulated in the near future. It seems a high price to pay for protection from what some believe is not illegal activity. During the time that PartyPoker saw its share of the online poker market drop from 40% to 8%, other companies have swooped in to pick up the pieces. The two largest online poker websites are now two of the few remaining that still accept players from the US. PokerStars’ market share has increased to approximately 37%, while Full Tilt Poker shares about 16% of the market.
As Warwick Bartlett, Chief Executive of Global Betting & Gaming Consultants, points out, “America is perceived, rightly, as the home of poker. The Europeans like to play against the American players, so they gravitate to the companies actively recruiting players in the United States.”
It will surely be interesting to see what transpires should the US begin licensing and regulation of online poker sites. Would they look less favorable on sites such as PokerStars and Full Tilt, who have thumbed their noses at the government and taken advantage of the fact that many public companies chose to err on the side of caution and follow US mandates? That of course remains to be seen. However, PartyGaming will not be taking any chances.
The speculation that an agreement such as this would be reached increased greatly this past December, when PartyGaming’s largest shareholder, Anurag Dikshit, agreed to pay the US government $300 million to settle charges of violating US Internet gambling laws. The most recent agreement also fuels the belief that online poker is moving closer to being licensed and regulated by the US government. Chairman of the Financial Services Committee, Barney Frank, is supposed to introduce legislation that would repeal the UIGEA in the coming weeks. That would be a giant step in setting up legal, regulated online poker, and PartyGaming plans to be at the front of the line when that time comes.