Bwin.party Breaks Advertising Deal with Megaupload.com
The US Department of Justice (DoJ) has filed a 72-page-long indictment against Megaupload Limited, a Hong Kong based online file hosting company, in which it has mentioned Party Gaming, a party of Bwin.party Digital Entertainment Plc, the world’s largest online gambling company formed by a merger of Party Gaming and Bwin.
Recently, Bwin.party issued a press release in which it responded to the mention made of the name of Party Gaming in the DoJ indictment. In its indictment, the DoJ stated that Party Gaming has spent over $3 million at Megaupload Limited, as part of a marketing and advertisement deal signed between the two. As part of this agreement, Party Poker advertisements were published on Megaupload.com sites, which are believed to receive over 50 million new visitors per day. The contract was signed in 2009.
In its response to this indictment, Bwin.party has stated that it terminated its marketing and advertisement deal with the file hosting company as soon as it learned of the DoJ indictment. Speaking on this move on the part of Bwin.party, John Shepherd stated that the gambling company was totally unaware of the alleged illegal activities Megaupload Limited stands accused of.
According to the DoJ indictment, “PartyGaming’s advertising contract with the members of the Mega Conspiracy [the name given by the DOJ to Megaupload.com] was initiated on or about November 12, 2009 and has resulted in payments of more than $3,000,000 to the Conspiracy. This contract was still active as recently as on or about March 18, 2011.”
While admitting that it had indeed paid $3 million to Megaupload Limited to display ads for its poker services, Bwin.party states that the deal was signed on the understanding that Megaupload Limited would not host pirated content and infringe copyright belonging to third parties.
John Shepherd, the marketing executive for Bwin.party, said, “Our contract with them states that the content of the vendor websites do not infringe the Intellectual Property Rights of any third party.”
Shepherd stated that Bwin.party had no part to play in of any of Megaupload’s alleged illegal activities, adding that he has no idea why the DoJ has mentioned the name of Party Gaming in its indictment. He said, “We’re a completely innocent party. They [the US authorities] have obviously put the details of our contract in the indictment to help make their case about the amount of money that was going through Megaupload.com.”
The DoJ has indicted seven people associated with Megaupload.com of several offences ranging from money laundering to pirating to infringement of third-party copyright. According to the DoJ, Megaupload.com has raked in illegal profits worth more than $175 million.
The US law enforcement agencies arrested Kim Dotcom, the founder of Megaupload Limited, in New Zealand after the local police raided his luxurious house. Dotcom is soon to be extradited to the USA. On Jan 19, 2012, the DoJ seized Megaupload.com assets and shut down 15 sites belonging to it. Moreover, the government of Hong Kong also seized assets worth HK$330 million, which belong to Megaupload Limited.
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