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Partygaming (the company that owns Party Poker) saw massive gains in their share price earlier this week based on rumours that they had nailed a deal with the US Department Of Justice (DOJ). The New York Post reckons this deal could cost Partygaming a cool $1 billion dollars (ouch!) which will enable the DOJ to 'forgive and forget' any past activity the company, its founders and employees conducted in the States prior to the introduction of the Unlawful Internet Gambling Enforcement Act (UIEGA).

Unfortunately it looks like those rumours were a bit premature as people in the know are now saying an agreement is months away. This has had the inevitable negative effect on the Partygaming share price although they are still higher now than it was a week ago.

So what do we think about this? Well mixed really. On the positive side, its great news for Party, they can clear the decks and get on with running their business. Many people seem to of held off investing and backing Partygaming due to the uncertainly any potential legal challenge from the DOJ might bring. On the downside, this kind of sets the price benchmark the DOJ are looking for other companies to pony up in order to get out trouble.

These other players might not be on the same scale as Partygaming was in the US but on the flipside they won't have the size of war chest that Partygaming enjoys to buy their way out of trouble. So good news for Party might not be necessarily mean good news for the other guys!

So interesting times ahead. This deal might happen this week or might happen in 3 months, either way this is certainly one of those stories to keep a good eye on.