Finally, Closure for World Gaming in Vancouver

20 August 2001
World Gaming plc has reached a settlement with Canadian authorities regarding the three-year RCMP investigation of Starnet Communications, now a virtually defunct subsidiary of World Gaming.

The company pleaded guilty to one charge of keeping a device for gambling or betting, a violation of Section 202 (1) b of the Canadian criminal code.

No company officials were charged with criminal activity. "That was a decision made by crown counsel in consultation with the police," Inspector Mike Ryan of the British Columbia Organized Crime Agency told the Vancouver Sun.

The settlement includes a payment of a CD$100,000 fine along with a $15,000 victim surcharge. The biggest cost, however, is the forfeiture of US$3.9 million from the company's $7.6 million funds that have been frozen since the RCMP raided the company's offices in 1999.

Once the charges are paid, World Gaming will regain use of the remaining US$3.6 million. These funds, CEO Michael Aymong told IGN in an earlier interview, had been basically written off.

Ryan is pleased with how the legal battle has ended. "We think it's a fair and positive solution to the case," he said.

This is the second legal matter in two months that has been settled under the direction of World Gaming's newest chief executive. In taking on the leadership role for World Gaming, Aymong made it clear that settling these problems was a top priority. He assumed the CEO mantle in May.

"This is a watershed event for the company--a major milestone. Putting an end to this matter is very positive for our shareholders," Aymong said in a press statement. "World Gaming is operating under an entirely new management team, business direction and operational structure. As we go forward, we do so with a strong commitment to compliance and a constructive relationship with governments here in Canada."

In June, the company ended its other major legal battle by settling all class-action lawsuits consolidated in the United States District Court for the District of Delaware that had been pending since late 1999. Under the terms of that settlement, World Gaming issued 1.05 million shares, valued at at least $1 each, to members of the class. The company also paid all costs and administrative charges.

With the settlement of the two suits, the company's stock prices may also benefit. When Aymong took control of the company, stock prices were hovering around $.50. Within four months, their value has risen to well over a dollar. At closing on Friday, shares were selling for $1.46. Today, the price has been up nearly 7 percent, before closing at $1.56.