The rumors have been circulating like herpes at a fraternity kegger about who was going to acquire UK online gambling group Cashcade. For a while, the frontrunner seemed to be 888.com, but last week they backed out after CEO Gigi Levy confirmed pursuing a contract, but could not agree on a price tag. However, the dust has settled and a winner has emerged. According to a UK newspaper, Party Gaming has inked a deal to purchase Cashcade, owners of the popular bingo site, foxybingo.com.

The deal, expected to be officially announced within the next few days, is rumored to be somewhere in the neighborhood of $122 million and include further compensation (upwards of $48 million) based upon future performance of the site through 2010. Party Gaming recently settled a legal dispute with the US Department of Justice and had mentioned interest in acquiring a number of online gaming properties. They have also looked into deals with GigaMedia, owners of Everest Poker.

Independent News & Media, who owns a 20% share of Cashcade is breathing a sigh of relief as the purchase will create much needed cash flow for the indebted newspaper. Cashcade has proven to be successful since its launch in 2000, last year earning over $65 million.

CEO of Party Gaming, Jim Ryan said of this and further acquisitions, “Party plans on playing a material role in the consolidation of the sector, but that will always be contingent upon appropriate valuations and the willingness of parties to make deals happen.” he said. “I think that has been the limiting factor historically is that the gaming sector has been a growth sector, and the valuation expectations of organizations quite often don’t get reset during the softer periods like we’re experiencing right now.”

According to the UK’s Sunday Times, PartyGaming has agreed to a deal to purchase online bingo giant Cashcade. The deal, which would be officially announced within the next two days, is reportedly worth £100 million, with an initial £75 million in guaranteed money and up to £25 million depending on how the bingo site fares in 2009 and 2010. The expectations are that the site will fare very well, since Cashcade is the UK’s number-one online bingo site in terms of number of players.

Cashcade is owner of popular online bingo companies Foxy Bingo, Mirror Bingo and Cheeky Bingo. Cashcade’s companies make up 23% of the online bingo market share, making them a popular, though pricey, company for acquisition after they announced they were for sale earlier in the year.

Until it is officially announced, though, and the contract is signed, no one should assume anything. After all, until last week everyone assumed online casino 888.com was going to buy Cashcade, but they pulled out of the bidding war when the stakes got too high. And as for the Sunday Times‘ reporting, I have no experience with the newspaper to know how credible they are, but the likes of Walter Cronkite and Dan Rather have led to a general distrust of the media. Of course, we want you to know that you can trust us nice folks at GamblingReview. We’re different. In any case, the deal is said to be announced within the next two days and GamblingReview will update you when it happens.

Gigi Levy, the CEO of online casino 888.com, has announced that they will not buy Cashcade, a popular UK online bingo firm. The two parties have been in negotiations for the past three months, but according to Levy, the deal fell through because the price tag was too high. There has been speculation that no deal was made due to a lack of settlement between 888.com and the US government. Levy denies this claim, stating that they had enough bank financing to get the deal done but “we just didn’t want to pay the price they were asking for.”

 888 was believed to be the front-runner in the Cashcade bidding war, but with them out of the picture, PartyGaming and an undisclosed company will continue bidding for the firm. According to Levy, those companies “are more interested in it and are willing to pay more for it.”

 888 may have decided against purchasing Cashcade, but they will still carry their games despite a change in ownership. Gashcade, the parent company of Foxy Bingo, has a binding contract with 888 that will keep their games on Globalcom Limited, which was bought by 888 in 2007, for at least the next two years.

 Unlike competitors PartyGaming and Sportingbet, 888 has not settled with the US government regarding activities that took place, now considered illegal, before the passing the the Unlawful Internet Gambling Enforcement Act (UIGEA). By settling, the companies gained immunity from prosecution of pre-UIGEA offenses. There has been speculation that a lack of a settlement would hinder 888’s ability to purchase Cashcade, but that has been denied by Levy.