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 PartyGaming and 888.com About to Write Blank Checks to US Government?
The management of PartyGaming and 888.com met with US government officials this spring in what was believed to be a means of having both companies names cleared of any "wrong doing" following the high profile arrests of online gambling executives at both BetonSports and Neteller.
The US government contends that these publicly traded firms and others like it admit to taking millions of dollars from its citizens without a penny realized in taxation.
The plan to meet with US officials may have backfired if the idea was to walk away owing nothing. Some say the US wants a blank check and there is concern that these poker firms are prepared to give them one, especially 888.com, which is known for its "lack of backbone". 888.com essentially followed PartyGaming's lead in dealing with the US one-on-one. Both companies were once the pillars of online gambling.
The US government passed a law last October that would hold banks responsible for halting online gambling activities. That law and its implementation is currently being challenged in a New Jersey court. Both PartyGaming and 888.com, arguably the biggest online poker and online casino businesses, respectively, in the US market, fled the day after its passage.
"There is no reason why a number of these gambling companies ran out of the US," contends Eric M. Bernstein, one of the most successful first amendment attorneys who is currently representing independent trade organization, iMEGA.org in its challenge against the Unlawful Internet Gaming and Enforcement Act.
The banks were given 270 days to come up with a report on how they would monitor Internet gambling transactions. That deadline has come and gone with no sign of any progress. A hearing to have the new law made "temporarily unenforceable" will be heard on September 4.
"Maybe PartyGaming and 888.com should have just paid taxes like the rest of us who benefit from doing business in the US," said the owner of a US-based website that delivers news related to the online gambling industry. "By back peddling, all these companies are doing is sending a message out there that they were breaking US laws all along and now admit to it."
That is what transpired with Neteller, a third party payment processor whose founders were arrested last January. Both plead guilty on "conspiracy" and admitted they were essentially evading US laws.
ThisIsMoney.co.uk claimed Monday that sources claim the US Department of Justice could try to recoup all profits made by the two companies in America. This would amount to nearly $900m (£445m) in the case of PartyGaming and $120m for 888.
However, sources close to both companies said neither would be prepared to sign a blank cheque, which could effectively put them out of business overnight.
'It would be a shocking move that would be a betrayal to UK investors,' said one insider. Instead, what has been suggested is that the Americans deal with the companies to reclaim some money and then pursue the founders of both businesses, who have taken large dividends, for the bulk of the cash.
PartyGaming has paid 90% of its US profits in dividends and 70% of that went to the hands of the founding shareholders, who still have large stakes. Last October, when shock antigambling legislation went through, both PartyGaming and 888 withdrew from the US.
Considering how quick both companies were to turn their backs on US citizens, it would shock few people in the online gambling community if either PartyGaming or 888.com or both were to "betray shareholders". If PartyGaming pulls out the check book, 888.com stands a pretty good chance of following based on past trends. |
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发表于 2007-8-14 04:54