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The Plea Agreement

The rumors about the pending Party Gaming settlement have proven true despite a statement earlier in the week by Party Gaming that the rumors were unfounded. The Financial Times headlined the information at the beginning of the week and alleged that one of the four founding members of the company, Anurag Dikshit, plead guilty to a Wire Act charge and agreed to pay a huge $300 million fine. Dikshit did appear in a New York US court on Friday and plead guilty to the single charge for Party Gaming’s online casino gambling activities prior to the passage of the UIGEA. Foreign online casinos are strictly banned from the US industry as a result of the UIGEA, but the Department of Justice (DoJ) has asserted that pre-UIGEA activities were also illegal because of the Wire Act – an outdated piece of legislation that was drafted in reference to the telephone rather than the internet specifically.

Regardless though of whether the US ought to prosecute online casinos and gambling companies for pre-UIGEA activities, the DoJ is doing just that. Now that the Dikshit has appeared in court, the initial speculation is spot on. Dikshit has already paid the US government $100 million in fines, he now owes $200 million more payable in two installments and all paid before September 2009.

Interestingly enough, as a part of the plea agreement Dikshit is now also out on bail until 2010 for his online casino gambling related actions and the charges. There is a chance that Dikshit could be forced to spend as long as two years in a US prison – he is out on $15 million bail – but likely as not if he pays the fines and adheres to the bail rules he will be free and clear by his 2010 sentencing hearing.