PartyGaming, the online poker and casino operator, has agreed a landmark settlement with the American authorities that could pave the way for an eventual return to the most lucrative gaming market in the world.

The group withdrew from America in October 2006 after online gambling was outlawed when Congress made it illegal to make payments to online gambling sites.

It revealed yesterday that it had agreed to pay a penalty of $105million in eight instalments over the next four years as part of a “non-prosecution agreement” with the US Attorney's Office for the Southern District of New York.

In the deal, PartyGaming has put its name to a “statement of facts” in which it admits for the first time that, before October 2006, it had targeted US citizens, resulting in the processing of transactions that were “contrary to certain US laws”.

The lenient settlement was greeted with relief by the market, and PartyGaming's shares rose 31p, or 14 per cent, to 247p.

In its heyday PartyGaming was the world's biggest online poker company and was a member of the blue-chip FTSE 100. Shares of 888 Holdings and Sportingbet, both of which have been negotiating settlements, jumped by more than 7 per cent and 5per cent respectively.

The US authorities had originally sought jail sentences for some senior executives and founding shareholders.

Jim Ryan, the chief executive of PartyGaming, said that the agreement had drawn a line under the matter, represented the “best of all outcomes” for the company and paved the way for it to drive consolidation and seize “opportunities that previously were beyond our reach”.

In a first-quarter trading update yesterday, the company reported a 22 per cent fall in net revenues to $100.1million, a rise of 2 per cent compared with the previous quarter.

Casino revenues were up 5 per cent on the previous quarter and sports betting was up 19 per cent. Poker was down1 per cent and bingo by 27 per cent.

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