17th June 2005

Source: The Guardian

The U.S. Justice Department says the directors behind PartyGaming, the online poker operator behind the worlds largest Poker Portal - Party Poker which is  floating in a £5 billion pound IPO in London in the next two weeks, face prosecution under the Interstate Wire Act, the Illegal Gambling Business Act and the Travel Act in the United States, according to a report in the Guardian newspaper.

PartyGaming which operates Party Poker, which is the largest Poker Portal in the world and one of the most popular online poker sites with U.S. gamblers. A senior Justice Department official told the newspaper: "Any business offering online gambling services that are in the United States or can be accessed in the U.S. are illegal."

He added: "If they're taking bets in the U.K., and it's legal there, that's fine; but if they're taking bets in the United States, that's illegal, and they will be prosecuted."

PartyGaming disputes this interpretation of the law, though admitting "uncertainty" as to online gambling's legality. The report said the warning is likely to increase anxiety among U.S. investment institutions, some of which are said to be reconsidering whether to back the IPO.

Empire Online PLC (EOLEOL) shares, an online betting peer that debuted on the stock exchange Wednesday, closed down nearly 12%.