US Settlement Shaves Profits off Party Poker
Written by Matt W | Saturday, March 6th, 2010
Party Gaming, parent company of Party Poker online poker room, posted losses of $26.5 million last year, stating that a deal with the US Department of Justice shaved a significant portion off its revenues. Party Gaming reached a plea deal with the US authorities to avoid being prosecuted for offering poker and gambling services to the US market prior to the introduction of the Unlawful Internet Gambling Enforcement Act.
Despite that fact that Party Poker upped and left the market in 2006, following the introduction of the UIGEA, the DOJ still found fit to make the group cough up a total sum of $105 million. $15 million was paid out in 2009, cutting a dent in the group’s profits.
Party Poker’s profits were $66.1 million in 2008.
The UIGEA dealt a double whammy to Party Poker. Not only was the group eventually forced to pay the big settlement fee, its sales were also hit by competition from rival groups who continued to serve the US poker market. Party Gaming, a publicly listed group on the London Stock Exchange, was answerable to stockholders and therefore had no choice but to leave the US market. On the other hand, offshore poker sites who were not publicly listed or had no physical assets in the US market, continued (and continue) to serve US players.
In the meantime, the CE of Party Gaming, Jim Ryan, has not ruled out the possibility of mergers and/or acquisitions in the coming year. The group, which purchased the World Poker Tour late last year, said that they believed that the US government was seriously considering the relaxing of online poker laws in the coming months.
“We are certainly in discussions with a few parties on a number of different opportunities,” said Ryan. “There are a list of suspects who one would expect us to be talking to given that our focus is consolidating the online gaming sector.”
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· Written by Matt W · Filed Under Poker Gossip · Comments Off
