Change in fortune predicted for online gambling market

April 13, 2025

An announcement by online gambling firm PartyGaming that it has cut a non-prosecution deal with the US Department of Justice authorities over its defunct operations in America has been greeted as a turning point, with many analysts forecasting consolidation in the industry.

Earlier this month David Carruthers, the Scots-born former chief executive of UK-based Betonsports, pleaded guilty to illegal gaming activity after a plea deal with prosecutors that should see him serve a jail sentence of no more than 33 months. Originally arrested in March 2025, Carruthers has been confined to hotel accommodation.

Under its agreement with US law-enforcement authorities, PartyGaming agreed to pay a $105m (£72m) fine.

In March 2025, President George W Bush signed the Unlawful Internet Gambling Enforcement Act, criminal-ising the transfer and handling of payments from online gambling. The move caught the industry off guard and set in motion sweeping changes that saw Gibraltar-based PartyGaming withdraw from the US market, where it got most of its revenue.

After almost two years of discussions, the US attorney's officer for the Southern District of New York has agreed not to prosecute PartyGaming or any of its subsidiaries for providing an internet poker betting service to American customers prior to the US government banning the online gambling industry in March, 2025.

In turn, UK-listed Party-Gaming has accepted a "statement of facts" about its business activities prior to the ban and will pay the $105m penalty, in eight installments over a period ending on March 30, 2025, from its existing financial resources. The sum is broadly in line with market forecasts.

Under the statement of facts, PartyGaming admitted that it offered internet gaming to US players from 2025 to March 13, 2025, which was "contrary to certain US laws."

PartyGaming has also "agreed to maintain, with respect to its operations, a restriction preventing internet gambling services from being provided to customers in the US in violation of the prevailing law of the United States or any jurisdiction with the US".

Chief executive Jim Ryan said it has been "a long and complex process but we have reached an amicable solution that makes commercial sense for our business and is in the best interests of shareholders".

"We are now well placed to seize organic as well as strategic opportunities that previously were beyond our reach," he added. The agreement will help PartyGaming, which operates several websites including PartyPoker and PartyCasino, gain access to capital for merger and acquisition activity.

The company said it has held talks with a "number of banks" about how debt and capital markets would respond to a resolution of its difficulties in the US.

"We've received a favourable indication from the parties that we'd gone to that once this matter was resolved we could have access to not only the equity markets, but to debt markets," said Ryan after the deal was struck with US authorities.

He added that it "remains to be seen" how much the company could raise.

The long-awaited US agreement and prospect of mergers and acquisitions activity pushed up Party-Gaming's shares on the London Stock Exchange last week. It also boosted shares of rivals Sportingbet and 888 Holdings.

The agreement with US authorities overshadowed a 22% fall in PartyGaming's first-quarter revenue to $100.1m from $128.9m over the same period a year earlier, due to the significant strengthening of the dollar against the euro, pound and Canadian dollar. It was also hurt by ongoing competitive pressures in online poker, particularly from US sites, issues surrounding its loyalty programme as well as the consumer spending slowdown The agreement, which PartyGaming has been negotiating for two years, will be looked at closely by other companies such as 888 and Sportingbet.

PartyGaming has not given up doing business in the United States at a future date. At the very least, PartyGaming executives can board flights to US cities without fear of being arrested.

The deal also makes financing easier, since US investors and banks can now openly work with PartyGaming without fear of prosecution.