he settlement relates to PartyGaming's activities in the US prior to the industry being effectively outlawed by legislation introduced in 2006. The group said it has agreed to pay us$ 105 million, in semi-annual installments over a period ending on 30 September 2012, and expects to report a related charge of us$ 100 million when it reports its interim results. "We are now well-placed to seize organic as well as strategic opportunities that previously were beyond our reach," CEO Jim Ryan said.
The firm also reported trading figures this morning. The group said the significant strengthening of the US dollar and competitive pressures in its core poker division were the primary factors behind the drop in quarterly revenues.
Group revenues fell to us$ 100.1 million in the three month ended 31 March compared with us$ 128.9 million last time. Poker revenue declined to us$ 53.6 million from us$ 80.7 million due to foreign exchange movements and competitive pressures from US-facing sites. Casino revenue dropped to us$ 40.9 million compared with us$ 42.3 million, though average daily casino revenue was up 5% versus the previous quarter.
“Whilst the business environment remains challenging, our strong poker sign-ups together with the addition of 60 new games to our casino by the end of the first half, further B2B deals in the pipeline and our strong control of costs, mean we are well-placed to capitalize on our great products, great brands and strong cashflow,” said CEO Jim Ryan.
“Having successfully resolved our discussions with the US authorities we are actively reviewing consolidation opportunities that, if concluded successfully, are expected to provide new and additional sources of growth,” he added. On a conference call with reporters, Ryan said the company had already approached a number of banks regarding financing and received a positive response.
PartyGaming's agreement is likely to be followed by other deals between online gaming companies and US authorities. 888 has been involved in similar discussions and has previously said it expected a deal involving PartyGaming would likely be a catalyst for the rest of the industry. Last month, Sportingbet told Reuters it is confident of striking a deal with the US authorities by the end of 2009.