Party Gaming Founder Dikshit to Plead Guilty to Gambling Charges !!

Anurag Dikshit, co-founder of PartyGaming (the parent company of popular online poker room PartyPoker,) will fork over $300 million to U.S. authorities and plead guilty to a charge “relating to illegal web betting,” according to a report published on the Financial Times website late Monday night. Dikshit will appear in front of the Southern District Court of New York on Tuesday at 2:00pm Eastern Time.

The Financial Times states that, in addition to the nine-figure fine, Dikshit may spend up to two years in prison. He is scheduled to plead guilty to violating the Wire Act of 1961, which has typically been interpreted to apply to online wagering on sporting events. Party Gaming currently offers casino games, Backgammon, Bingo, and sports betting. However, it is best known for its online poker site, which recently revamped the look of its tables and lobby and has grown to become one of the largest rooms that does not accept U.S. players.

PartyPoker was once one of the marquee sites that catered to the U.S. market. However, with the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, the room left the country entirely. Party Gaming is traded on the London Stock Exchange under the symbol “PRTY” and, like 888 and Sportingbet, is publicly traded. The decision to leave the U.S. market meant that privately held rooms PokerStars and Full Tilt Poker would grow to become the two largest online poker sites in existence.

The article reveals that Dikshit owns a 27% stake in Party Gaming and is the largest single shareholder. Ruth Parasol and Russ DeLeon each own 14%, but have not yet made any agreement with the U.S. Department of Justice similar to the one Dikshit may have struck. The Times also notes that Party Gaming, 888, and Sportingbet have all been in separate negotiations with the Department of Justice in order to clear the air legally with the United States Government. The ruling has the potential to set the precedent for the internet gambling industry, although whether the case is aimed specifically at online poker is not known.

At the time of writing, Party Gaming’s stock was trading at ₤138.75, up ₤3.75 at the last close. The stock has traded wildly between a range of ₤87.75 and ₤312.00 over the past 52 weeks. In September of 2006, just before the UIGEA was passed, the stock was sitting at ₤107. In a span of three weeks, it dropped precipitously to ₤29 as the UIGEA was passed into law on October 13, 2006. The company went public in 2005.

The Southern District Court of New York is located in White Plains, and Judge Jed S. Rakoff will ultimately decide Dikshit’s fate. It is not known if any jail time will be announced on Tuesday or when the ultimate decision will be handed down. According to the court’s website, Judge Rakoff makes his home in court room 14B.

PartyPoker recently revamped its rewards system and is gearing up for its Irish Poker Championship, a live tournament that will take place in Galway. Last year, Jude Ainsworth pocketed €180,000 for the win in the tournament, which will take run from January 2nd through 4th, 2009. PartyPoker is doling out $5,000 packages that include the $2,800 Main Event buy-in, $1,000 in spending cash, and accommodations that are worth $1,200. The Radisson Hotel Galway will host the tournament, which will feature Irish poker pro Padraig Parkinson, World Poker Tour Host and Poker News Daily contributor Mike Sexton, and David “Devilfish” Ulliott, who is the face behind popular online poker site Devilfish Poker.

Regarding possible prison time, the Financial Times explained, “He hopes the DoJ will recommend to Judge Jed Rakoff that, having gone voluntarily to the DoJ, he should not go to jail.” A statement released by Party Gaming to the London Stock Exchange on Tuesday added, “The Company believes that any such settlement is unlikely to include a criminal plea on the part of the Company or any director.” In addition, PartyGaming officials stated that Dikshit was likely to pay far less than the $300 million reported by the Financial Times.