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Party Poker Gives US $105 Million Present

Law, 2009-04-08, by Ozone

The United States Department of Justice received a nice influx of cash this week when Party Poker announced an agreement to settle with them for $105 million in exchange for not being prosecuted for any of its activities relating to U.S. relations. Meanwhile, Howard Lederer still casually wanders the streets of Vegas.

It is not clear why Party Poker decided to make this settlement. Some have suggested that Party thinks the UIGEA will be overturned and that this settlement will help pave their re-entry into the U.S. market. I doubt this was the reasoning behind their move... but if it is, that's just plain stupid. A more likely reason is to be able to secure mergers and acquisitions with other poker rooms and finally have the era of the UIGEA off of their back.

Party Gaming was up 16% on this news. This could be because investors speculated that Party would have paid more to reach this sort of settlement. But if the stock is up on optimism that they'll be able to re-enter the U.S. market soon, then investors are just plain delusional.

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