One of the founders of leading online gaming operator PartyGaming has pled guilty in the United States to violating the 1961 Wire Act and has agreed to pay $300 million in fines and assist authorities with their investigations.
Anurag Dikshit helped start PartyGaming in 1997 by creating its software platform and still remains its largest shareholder with 28 percent. According to Forbes magazine, the India-born entrepreneur became the world’s 207th richest person when the firm went public in 2005 on the London Stock Exchange. At that time, the Gibraltar-based firm behind popular Internet poker room PartyPoker.com revealed in its prospectus that the United States Justice Department ‘considers that companies offering online gaming to US residents are in violation of existing Federal laws’ and that investors could lose money if the firm was barred from this lucrative market.
Despite a statement earlier this week from PartyGaming seemingly to the contrary, Dikshit pled guilty to one count of online gambling before the Southern District Court of New York and has paid an initial fine of $100 million. The 37-year-old resident of the UK and Gibraltar will pay another $100 million by March with an equal and final instalment due in September.
“I came to believe it was in fact illegal under US law,” Dikshit told US District Judge Jed Rakoff in New York.
“I have taken full responsibility for my actions.”
Dikshit is married and has two children and voluntarily travelled to the US last week in order to enter his guilty plea. In addition to the fine, he faces a maximum penalty of two years in prison followed by a year’s supervised release. Judge Rakoff set a sentencing date of December 16, 2010 and allowed Dikshit to remain free on a $50 million bond.
Lawyer Mark Pomerantz told Judge Rakoff that his client had ‘a growing awareness of the illegality of the conduct’ before PartyGaming exited the US market in the wake of 2006’s Unlawful Internet Gambling Enforcement Act (UIGEA).