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Last Updated: Thursday, 16 June, 2005, 12:50 GMT 13:50 UK
Shadow cast on Partygaming sale
A number of people play online together at Partypoker
Online betting is legal in many countries
The sale of shares in online gambling group Partygaming has been overshadowed by fears that the group could fall foul of US laws.

The firm is set to be valued at between 4.4bn and 5.1bn when it debuts in London on 27 June, the biggest UK flotation in more than four years.

The firm has been warned its owners could face prosecution in the US, according to a Guardian report.

Partygaming insists that its services do not contravene any specific US law.

"No warning naming Partygaming or its founders has been issued by federal prosecutors," a spokesman for the firm said.

However, fears persist that uncertainty could deter investors from buying shares, forcing the price lower.

US worries

Online betting is legal in many countries, including the UK.

But, the US Department of Justice has said Partygaming's business is prohibited by US laws - designed to cover telephone betting - which outlaw cross-border gambling.

[Businesses] accepting bets or wagers from customers located in the United States ... are violating federal laws
US Department of Justice

Owners Ruth Parasol, her husband James Russell Deleon, Anurag Dikshit and Vikrant Bhargava could face between two and five years in jail if prosecuted in the US.

However, a Partygaming spokesman told BBC News that previous cases in the US "clearly showed" any legal action needed to be linked to sports betting - a service not offered by Partygaming.

"No US court has ever applied the statutes to companies offering an online service in the same way as Partygaming," he said.

He added that no "specific legislation" in the US covered its activities and the company was operating "legally under the terms of its licence" issued by the government of Gibraltar - where the firm is based.

Gambling crackdown?

Some internet betting firms have been prosecuted in America and some states have taken action against internet gambling.

New York - where unauthorised gambling is illegal - has agreed a deal with Citibank and internet payment service PayPal to block credit card payments for online gambling transactions.

However, significantly for Partygaming, all cases brought in the US against online gambling have been against US citizens with operations based overseas.

A case brought to the World Trade Organisation (WTO) by the Caribbean state of Antigua and Barbuda could also support their cause.

In November, the WTO ruled that US laws prohibiting cross-border gaming broke trade rules.

The US has appealed against the decision.





SEE ALSO:
Poker firm in bumper share offer
15 Jun 05 |  Business
The human cost of online gambling
07 Jun 05 |  Business
Poker firm bets on 5bn flotation
02 Jun 05 |  Business
Bets on for poker site to float
27 Jan 05 |  Business
Betfair expands with Yahoo deal
25 Jan 05 |  Business
WTO rules against US gambling ban
11 Nov 04 |  Business


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