PartyGaming founder sells before sentencing

The co-founder of PartyGaming, who faces sentencing next year for violating US gambling laws, is to sell his stake in the online gaming company.

Anurag Dikshit's holding company said yesterday it had sold two-thirds of his 27.6 per cent stake to institutional shareholders, taking his holding down to 9.4 per cent. A spokesman for the billionaire, who helped to set up Party-Gaming in 1997, said: "The rest will be sold down when it is appropriate to do so and that will be soon."

Mr Dikshit pocketed £188m from the initial sale at 250p a share. Shares in PartyGaming fell by 16 per cent, or 44.4p, to 240.1p yesterday, but analysts said the stock should benefit from the increased free float in the longer term. The spokesman said Mr Dikshit was selling the shares to transfer money into his charitable foundation, the Kusuma Trust, and to distance himself from that "chapter of his life". He is due to be sentenced in December 2010 after pleading guilty two years ago to breaking US gambling laws.

He paid a $300m fine in June after reaching an deal with prosecutors, and many in the industry believe he will avoid jail. James Hollins, an analyst at Daniel Stewart, said: "The assumption and informed view is that the fine will be enough of a slap on the wrist for him to be allowed to go on his way."

Mr Hollins said the main "positive" of the sale was to increase the free float of its shares on the market.

PartyGaming, which is headquartered in Gibraltar and best known for its online poker room PartyPoker.com, left the US gambling market in October 2006 after Congress enacted the Unlawful Internet Gambling Enforcement Act that month. In April 2009, PartyGaming signed a non-prosecution agreement with the US Department of Justice to pay $105m in instalments for offering internet gaming in the US from 1997.