The founder of PartyGaming, owner of the PartyPoker.com website, yesterday pleaded guilty to offering illegal gambling services in the United States and agreed to pay $300 million (£192 million). He now faces up to two years in jail.

Anurag Dikshit, a co-founder and currently biggest shareholder in PartyGaming with a 27 per cent stake, yesterday appeared in a Manhattan court to enter into a plea bargain with the US Department of Justice (DoJ). Under the terms of the plea bargain, Mr Dikshit will surrender $300 million of his wealth and will be sentenced in two years’ time, on December 16, 2010. He also faces another $250,000 fine.

The plea bargain is expected to have major ramifications for other online gambling firms that also offered gaming services to Americans. The timing of the deal is surprising because it comes in the run-up to the inauguration of Barack Obama as US President on January 20. He is widely expected to be more lenient on such gaming companies.

Wrangling between the DoJ and PartyGaming and its founders is far from over. In a statement yesterday, PartyGaming, which is based in Gibraltar and listed in London, said that it was in final-stage talks with the DoJ. It added: “While these discussions are at an advanced stage, the terms of any settlement have not yet been finalised and there can be no guarantee that an agreement will be reached between the company and the DoJ. In addition, the company believes that any such settlement is unlikely to include a criminal plea.”

Analysts believe that PartyGaming’s existing cash reserves would be more than adequate to cover any settlement with the DoJ, which many City experts expect to be between $50 million and $100 million. It is not expected that Ruth Parasol and her husband, Russ Leon, who are also co-founders of PartyGaming, and who own 14 per cent of the company each, would plead guilty to any offences under the Wire Act.

Mr Dikshit appeared before Judge Jud Rakoff at a Southern District of New York courthouse in Manhattan, just around the corner from Wall Street, yesterday lunchtime. He was represented by Mark Pomerantz, a partner in the New York firm of Paul, Weiss, Rifkind, Wharton & Garrison, who also advised Frank Quattrone in the former Credit Suisse First Boston banker’s appeal against a conviction for obstruction of justice.

Although the length of any prison sentence for Mr Dikshit would be for Judge Rakoff to decide, it would be up to the US Bureau of Prisons to decide where he should serve his sentence. According to the terms of his plea agreement, Mr Dikshit is to pay the $300 million in three equal tranches, the first of which has already been deposited. Mr Dikshit, 37, is married with two children.

Online gambling firms have run into trouble in the US after America made it illegal to gamble on the internet. In 2006, Washington passed the Unlawful Internet Gambling Enforcement Act and since then the DoJ under the Bush Administration has taken a hard line with foreign gambling firms. Washington has been accused of caving in to pressure from Las Vegas and of trying to protect America’s substantial horse racing betting businesses.

— PartyGaming’s shares leapt 38 per cent in London on hope that its battle with the DoJ was near to being resolved. They have fallen by as much as 92 per cent since their peak in 2005.

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