An online gambling group based in Gibraltar works to clarify its position vis a vis the United States

Party Gaming plc, which known throughout the world as being among the largest online gambling companies has this week announced that it has commenced discussions with the US Department of Justice. The discussions are said to be directed toward the clarification of the company’s position as it existed prior to October 2006. It was at this time that financial transactions carried out with online gambling companies were pronounced to be illegal through passage of the Unlawful Internet Gambling Enforcement Act.

As soon as this law was passed, Party Gaming got out of the US market and suffered substantial financial loses as a result of this.

As a result of this, the company announced to the media that it is The "voluntarily'' responding to an information request on the part of the U.S. Attorney's Office for the southern district of New York.

According to Bloomberg, online gambling industry executives were arrested in the U.S. last year, including David Carruthers of Betonsports plc and Peter Dicks of Sportingbet plc. Last month the company agreed to cooperate in actions against company founder Gary Kaplan after pleading guilty to U.S. racketeering charges as well as other co-defendants including Carruthers.

Sportingbet worked out a deal in March of this year to have charges by the state of Louisiana against Peter Dicks its prior chairman, dropped.

It appears that what Party Gaming is doing is trying to clean the slate regarding its American activities before the advent of the UIGEA, thus making a way for business initiatives that are possibly being currently impeded due to the legal uncertainties revolving around their past US operations.

Julian Easthope who is an industry analyst is reported as saying that if Party Gaming can resolve this problem it will definitely help its share price. This is because of the anxiety about legal issues that has been blocking potential merger and acquisition activity. Those who might otherwise buy the company and lend to it are concerned about the possibility of future legal action or the possible costs linked to their to past United States activities.

Meanwhile Party Gaming shares during the past half year have gained 37 percent. This follows their losing more than half their value on the first trading day after passage of the UIGEA. When President George W. Bush signed the bill into law last October, PartyGaming lost about three-quarters of its income.

It has also been reported by the Reuters news service that analysts have suggested that Ladbrokes plc in its attempt to buy 888 Holdings plc earlier this year, called it off because of concern about US legal involvements. Those familiar with the situation say that Party Gaming had been discussing the possibility of a merger with 888 at that time.

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