Internet poker and casino operator PartyGaming clearly knows when to walk away from a bad hand. In paying $105m to escape prosecution by US authorities, said the FT's Roger Blitz, the company accepted it had violated gambling laws between 2001 and its exit from the US market in October 2006.
Online betting is outlawed in America and when the authorities clamped down in 2006, Partygaming and others were forced to quit the American market. PartyGaming's settlement is expected to lead to similar deals with its rivals, such as 888. Partygaming's shares gained 14% on the news.
The settlement "looks like a winner", said Nick Haskell in The Times. It is at "the bottom end of best estimates" when the internet gambling operators first started negotiations, they were asked to repatriate every dollar bet by a US citizen. And the staged payments over four years "mean that the company will be able to pay the penalty from cash flow".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
With the uncertainty hanging over the company lifted, Partygaming is now "top of the list for the long-awaited sector consolidation", said The Daily Telegraph's Richard Fletcher. "The game can begin." And "there's a bigger opportunity, too... Sooner or later, America will work out that it's better to regulate and tax this market than attempt a futile prohibition. When this happens, PartyGaming can hope to be first at the table."
PRTY: 236p; 12m change 20%
-
Half of UK homeowners will need to tap housing wealth to pay for retirementUnlocking property wealth could inject £21 billion each year into UK economy by 2040, according to new research
-
When will M&S take online orders again?Shoppers have not been able to place orders on the M&S website for more than two weeks, following a cyberattack. Meanwhile, the retailer’s share price has plummeted by 15%. When will things get back to normal?
