In breaking news, Party Gaming co-founder Anurag Dikshit, who admitted to violating the Wire Act of 1961 two years ago, was sentenced to one year of probation by a New York court, according to Forbes. He has also coughed up $300 million and “agreed to cooperate in an ongoing investigation with Federal prosecutors.”
Dikshit, an Indian citizen living in Gibraltar, helped create Party Gaming, the parent company of the popular online poker room PartyPoker. U.S. District Court Judge Jed Rakoff determined Dikshit’s fate on Thursday and the possibility of two years behind bars hung in the balance. In the end, Rakoff told the court, “I am persuaded that no jail time is appropriate here.”
The Forbes article assessed the possibility that Dikshit could have received jail time for his transgressions: “It certainly would have been strange for Dikshit to wind up in jail even as other online poker entrepreneurs were not being prosecuted. Some of the most prominent are not even offshore, like the men widely believed to be behind Full Tilt Poker, the second biggest company servicing U.S. play, poker champions Chris Ferguson and Howard Lederer.”
Dikshit founded Party Gaming alongside Ruth Parasol and Russell DeLeon, neither of whom has paid any settlement fee to the United States Government nor appeared in court. Rakoff was befuddled as to why Dikshit was the only person who had stepped forward and so asked government attorneys yesterday, “Nobody else has been indicted. It has been two years since this defendant began cooperating, what’s going on?”
Dikshit’s admission marked one of the first times that online poker has ever been associated with the 1961 law, which has traditionally applied to sports betting. As such, Forbes noted that his decision elicited a harsh reaction from many in the online poker community, including DoylesRoom namesake Doyle Brunson. “Texas Dolly” commented two years ago, “It looks like he would feel a sense of obligation to online poker, the industry that made him a rich man. Instead, he folded up like an accordion and pled guilty to breaking some kind of mystery law and is paying a 300 million dollar fine and possible two-year jail term.”
In October 2009, Dikshit sold his remaining shares in Party Gaming for around ₤200 million, which amounted to a 28% stake. Party Gaming vacated the U.S. market in 2006 after the passage of the Unlawful Internet Gambling Enforcement Act, or UIGEA. The publicly traded company has since inked a non-prosecution agreement with the United States Government and forked over a $105 million fine. Party Gaming has also become a target of a lawsuit filed by the Commonwealth of Kentucky, which is seeking to recoup funds lost by state residents on PartyPoker.
Despite coming under fire in Kentucky and having one of its patriarchs admit to violating the Wire Act, Party Gaming appears to be poised to re-enter the U.S. market should online poker or internet gambling become legalized and regulated.
In a trading update issued on Friday in London, Party Gaming officials asserted, “There continues to be much movement in the U.S. towards regulating online gaming both at the Federal and state levels. Should the requisite legislation be enacted, the Group is well advanced in discussions with licensed companies in the U.S. that could create substantial value for the Group’s shareholders.” Party Gaming is also involved in an ongoing merger with bwin that will likely be completed in March.
Read the entire Forbes article outlining Dikshit’s probation sentence.
