Party Gaming is talking to DOJ, seeks an indulgence?

[MiltonFriedman]

From egaming review ... "NEWS: PartyGaming is in the process of voluntarily responding to a request for information from the US attorney’s office for the Southern District of New York, it announced this morning. News of the discussions between Party and the US authorities comes after months of speculation about further actions by the Department of Justice towards those involved in the online gaming sector. More on this later.'

Possible topics?

1. Uncoded credit card transactions ?
2. WSOP Seat for Alberto Gonzales ?
3. Confession that "poker is illegal" as quid pro quo for getting an indulgence ?

[Soulman]

This has exciting implications indeed, although 2. is probably the most likely.

[Uglyowl]

Did Party ever offer sports betting in the United States? I don't remember. I know they offered poker and casino games.

I'd be interested to know if the DOJ is questioning a non-sports betting gambling company.

[Wynton]

I would expect the basic outline of an agreement to be the following:

In exchange for no prosecution (or no prosecution resulting in any jail), Party and its execs:

1. Pay a substantial fine/restitution.
2. Agree never to offer services in US via a consent decree.
3. Cooperate in investigations against others in the industry.

[MiltonFriedman]

I do not believe they ever offered sports gaming in the US. They did offer both poker and casino gaming.

They also reportedly processed millions of dollars in uncoded credit card transactions, the basis for the indictments recently in Utah.

I thinl this will be an interesting area to watch, primarily because I think Party will be more than willing to throw as much dirt as possible on PStars, FTP and other US facing poker operations.

The reports indicate that the approach came from DOJ from NY, same as the approaches to Firepay .... likely it is related to player deposits in some manner.

[MiltonFriedman]

"2. Agree never to offer services in US via a consent decree."

I am totally in disagreement with you on this point. This is not a Wire Act case. I think it is unlikely that Party will admit to any federal law violations, except perhaps on the uncoded transaction area. ...

Put this into perspective,

1. Party DID almost certainly accept uncoded credit card transactions,
2. DOJ wants to close off uncoded credit card transactions for the US sports bettors (and poker players),

3.the Regs are due out, and WILL cover credit card transactions

4. the likelihood has been floated that paper checks or EFTs will get a pass under the regs, DOJ will need "cover" to placate the Kyl Krew,

5. Bonus: Party is a virgin under UIGE and can "confess" that poker is covered, without liability, and throw PStars under the bus.

The payoff for Party, they get to re-enter if/when poker receives a blessing.

[Wynton]

[ QUOTE ]
"2. Agree never to offer services in US via a consent decree."

I am totally in disagreement with you on this point. This is not a Wire Act case. I think it is unlikely that Party will admit to any federal law violations, except perhaps on the uncoded transaction area. ...

[/ QUOTE ]

Milt, this is a cost-benefit analysis. Even if this is not a Wire Act case, and even if Party could prevail in a prosecution, that does not mean the risk is worth it to them. And it's possible to enter into an agreement WITHOUT admitting to criminal liability.

You asked, I thought, what the parties would be discussing. And I would be quite surprised if this was not a topic under discussion.

[Grasshopp3r]

I see this as a precursor to a sale in order to clarify their exposure to their purchaser. I don't know if this is a bad or a good thing for the industry or our goals.

[Legislurker]

Well, whatever is going on the PPA knows about it since the PPA is their(Party's) creature. You would think they would drop their crop of 542k members a crumb of knowledge about what is going on. I agree its to clear up a buyout by a private equity firm. The IRS can levy large fines or "settle" for small ones. Imagine say they clear up all liability with the IRS/Justice, then are sold quickly to a private equity group owned in large part by a country such as China(they own part of several large funds), and China sues for compensation under GATS with the value of Party to bargain with before an arbitration panel.

[Grasshopp3r]

There are plenty of private equity groups that would love to get into Party, with the potential future upside of the business. There are also plenty of countries that would have an interest in pursuing GATS claims through the WTO, whether it was through Antigua or separately.