Online casino PartyGaming today struck a deal with the US authorities to pay a $105 million (£71 million) fine to protect it from prosecution over its operations in the country prior to the ban on internet gambling.

The owner of the PartyPoker website agreed to pay in instalments between now and September 2012 after a clampdown in the US saw draconian laws passed in October 2006 in effect banning it from its biggest market.

PartyGaming had to quit the US after the Unlawful Internet Gambling Enforcement Act was passed and it has since faced a prolonged legal battle with the authorities. One of the firm's founders, Anurag Dikshit, agreed to pay $300 million of his personal wealth in the hope of settling his role.

Today's deal with the US Attorney's Office for the Southern District of New York came as the firm announced a 22% drop in first-quarter revenue to $100.1 million while the daily average number of players on its websites declined 17% to about 68,000.

Chief executive Jim Ryan gave hope it could reinstate its dividend following the settlement and added that the firm was now ready to expand.

“The resolution of our position with the US authorities marks an important day for PartyGaming,” he said.

“We have reached an amicable solution that makes commercial sense ... We are now well placed to seize organic as well as strategic opportunities that previously were beyond our reach.”

PartyGaming shares today rose 343/4p to 2533/4p.