According to an article that appeared in eGamingReview (EGR) on Tuesday and filings to the London Stock Exchange, Party Gaming Co-Founder Anurag Dikshit will sell his 28% share in the company for at least ₤188 million.
It’s a curious twist on a story that began developing last December, when Dikshit appeared in the Southern District Court in New York. The Party Gaming personality pled guilty to violating the Wire Act of 1961 and agreed to fork over $300 million to the U.S. Government. He also faces up to two years behind bars, with sentencing scheduled for 2010. Dikshit’s spokesperson, Shimon Cohen, told EGR, “Anurag has paid the $300 million fine that he was asked to pay by the U.S. authorities and has decided it is time to move away from the company.” The Wire Act has traditionally applied to online wagering on sports, not online poker. Read the entire EGR Anurag Dikshit article.
Dikshit was originally rumored to be selling two-thirds of his 28% stake in Party Gaming; however, EGR later reported that the entirety of his shares would be unloaded. PartyPoker, the online poker arm of Party Gaming, withdrew from the U.S. market in 2006 shortly after the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was attached to the SAFE Port Act in the waning moments of that year’s Congressional session at the urging of then-Senate Majority Leader Bill Frist (R-TN). The regulations of the UIGEA were approved as midnight rules by the outgoing Bush Administration and will be fully enforced on December 1st.
In a filing to the London Stock Exchange on Tuesday, where Party Gaming is traded under the symbol “PRTY,” Anurag Dikshit, under the names BT Nominees Limited and Crystal Ventures Limited, is listed as selling 75 million shares of PRTY, or two-thirds of his original total. The filing explains, “Crystal Ventures Limited is wholly owned by BT Nominees Limited who hold shares in PartyGaming Plc under a declaration of trust in favor of Mr Dikshit.” Dikshit owned 113 million shares prior to the sale posted on Tuesday in London and retained nearly 39 million “indirect voting rights.” The sale of the remaining interest has not yet been posted.
At the close of trading on Tuesday in London, shares of PRTY were fetching 240.10p and EGR noted that Dikshit expects to pull in at least ₤188 million as a result of the transaction; the sum will be donated to charity. On Monday, PRTY was trading at 284p before Dikshit’s sale, which promptly sunk the share price by 15%. All told, Dikshit’s agreement with the U.S. Government last December ballooned the firm’s stock, which sat at below 140p before quickly climbing above 200p. Exactly one year ago, shares of PRTY were valued at 123p.
Ruth Parasol and Russ DeLeon, who founded Party Gaming along with Dikshit, were not expected to follow suit, according to EGR. In the meantime, PartyPoker officials have heralded the election of its ambassador, World Poker Tour (WPT) Host Mike Sexton, to the Poker Hall of Fame. Sexton is the lone representative of the Class of 2009 and will be officially inducted in ceremonies taking place on November 7th during the World Series of Poker (WSOP) Main Event final table. Sexton is a WSOP bracelet holder and re-signed with PartyPoker in April.
In August, Party Gaming acquired the WPT for $12.3 million, outbidding a subsidiary of Playtech, which owns and operates the massive iPoker Network. Four months earlier, the company entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Southern District of New York, agreeing to pay the Federal Government $105 million. In the process, Party Gaming admitted that it solicited U.S. customers prior to the UIGEA’s passage and agreed not to do so in the future until the industry is licensed and regulated.