Party Poker Co-Founder’s Guilty Plea Sets Dangerous Precedent

Dikshit Gives it Up
December 16, 2008
PPA Statement on PartyGaming Plea Deal with DOJ
December 19, 2008

The Remote Gambling Association (RGA) issued a statement urging the European Commission to take the necessary next steps to protect EU interests from WTO-violating retroactive and discriminatory enforcement by US authorities in the area of Internet gambling. Anurag Dikshit, a principal shareholder of PartyGaming, pled guilty to charges under the 1961 Wire Act. This is the first time this Act has been applied to Internet gambling beyond sports-betting. Despite never offering sports-betting and ceasing to accept US customers for its poker and casino games when the still-controversial Unlawful Internet Gambling Enforcement Act (UIGEA) 2006 was passed, United States District Judge Rakoff accepted the plea of Dikshit and a fine of $300M. The maximum sentence under the Wire Act is two years imprisonment and the date for sentencing was deferred for up to two years from today’s date.

“These events show that the outgoing US administration and the Department of Justice have demonstrated a total disrespect for the legal rights of European online gaming companies and those associated with them and a complete disregard for US international commitments under GATS,” said Chief Executive of the RGA, Clive Hawkswood.

EU Commissioner Peter Mandelson wrote to the Bush Administration’s USTR in June 2008 requesting a freeze on all enforcement actions by the US authorities against European online gaming companies on the grounds that they violated international trade rules set by the World Trade Organization. Hawkswood added, “Not only has that request remained unanswered, but now the US authorities, it seems, have succeeded in pressuring a major shareholder into making a deal. A major line has been crossed and it could set a very worrying precedent.

“That this happens while the US Internet gambling market, the biggest in the world, continues to grow and while US companies are free to develop their businesses in Europe, is quite astonishing,” said Hawkswood.

Professor Joseph Weiler who directs the Jean Monnet Centre for International and European Economic Law and Justice at NYU School of Law also commented, “In this area, the US has lost all its cases and appeals before the WTO’s highest judicial authorities. And yet in what can only be described as puzzling and haughty contempt for the rule of law, it is acting as if it won those cases. The US is pursuing European nationals and corporations and threatening them with lengthy jail time and punitive fines based on US laws which have already been unequivocally held to be in violation of American WTO obligations. This is without precedent. It deals a blow to the multilateral trade system at the worst possible moment for the world economy and to Western economies which rely increasingly on services for our prosperity. It serves no discernable American national interest and this is a bad day for the reputation of the US in the area of international law.”