News

Monday, 20 December 2010 07:42

The two year long investigation by federal agents into the US activities of PartyGaming has culminated in the co-founder of the company escaping a jail term.

Co-founder Anurag Dikshit was the only person involved with PartyGaming to be targeted by federal investigators. He agreed to cooperate with the investigation as part of a plea bargaining deal which kept him out of jail after pleading guilty to his part in the violation of the 1961 Wire Act which was used to bring the company to bear. A more interesting part of that deal saw the forfeiture of $300 million of his personal fortune.

The federal net that caught PartyGaming along with Dikshit comprised that section of the Wire Act relating to the illegality of providing sports betting services to American gamblers regardless of whether the company itself is based in the US or abroad. In actuality, there is no current US law that specifically prohibits the act of gambling online aside from sports betting, which is why so many other online casino and poker site operators are still accepting US players. Not even the UIGEA specifically outlaws the players or the companies that provide the gambling services, only the banks and financial institutions that process the proceeds of those services.

For this reason, it was seen by many as a betrayal of the industry when Dikshit voluntarily agreed to cooperate with the investigation. He pleaded guilty and struck the costly deal that, interestingly, would see no other employee or director of Partygaming indicted for any gambling related felony. Russell and Ruth Parasol DeLeon who live in Europe are the other two co-founders of the company and neither has been directly involved in the case.

High profile companies such as PokerStars and Full Tilt Poker maintain that by offering online poker they are breaking no US laws. To that end, there has been no attempt ever by US lawmakers to bring any charges against them.

Many see the action of federal investigations such as this squarely aimed at acquiring substantial monetary forfeitures from the extremely wealthy bosses of foreign based gambling companies and has little to do with upholding any laws. It is this apparently blatant hypocrisy that leads many to believe that there is unlikely to ever be a successfully implemented Bill for online gambling reform in the United States as long as federal investigators can keep acquiring substantial sums for the Federal Reserve without needing to legislate to do so through regulation and taxation.