LONDON (MarketWatch) -- Shares in PartyGaming climbed almost 7% Tuesday after the online gambling group said any settlement it pays to the U.S. Department of Justice is likely to be "significantly lower" than the $300 million that co-founder Anurag Dikshit is reportedly set to hand over.

The statement came after a report in the Financial Times that Dikshit has agreed to make the payment to U.S. authorities and plead guilty to a charge related to online betting..

The newspaper said Dikshit is due to appear in a New York court Tuesday, where he will admit the offense and agree to cooperate with the Department of Justice. The FT added that no plea bargain has been agreed, meaning Dikshit risks a jail sentence of two years, though he's hoping to avoid imprisonment after going voluntarily to the Department of Justice.

PartyGaming (PRTY) began talks with U.S. authorities in 2007 with the aim of removing any uncertainty over its legal status. The talks revolve around its operations prior to October 2006, when it allowed U.S. customers to gamble on its Web sites.

"The company's discussions with the Department of Justice have made good progress and it is currently negotiating the final terms of a possible settlement," it said Tuesday.

"On the basis of the discussions to-date, PartyGaming expects any settlement with the Department of Justice to involve a payment by the company of an amount that is significantly lower than that reported to be paid by Mr Dikshit," the statement continued.

"In addition, the company believes that any such settlement is unlikely to include a criminal plea on the part of the company or any director," it added.

Shares in PartyGaming rose 13.9% in afternoon London trading. Other gambling companies involved in similar talks with the Department of Justice also rallied strongly, with 888 Holdings (888) adding 10.4% and Sportingbet (SBT) jumping 14.8%.

Deutsche Bank analyst Jon Tarasewicz said the developments should be taken positively for both PartyGaming and the sector as a whole as they provides clear evidence that the Department of Justice is prepared to reach settlements.

"We note that the company's statement is more definitive about the likely outcome than previously, from which we would infer a high degree of confidence from the company," Tarasewicz said.

He added that settlements with U.S. authorities will remove some of the uncertainty hanging over the company and could also be a catalyst for further consolidation involving PartyGaming.

The Dikshit case is the highest-profile prosecution so far in the long-running U.S. crackdown on online gambling.

The clampdown on Internet gambling began back in 2006 with the arrest of David Carruthers, then-CEO of BetOnSports.com, and the detention of former Sportingbet Chairman Peter Dicks. See archived story.

That was followed by the introduction of new legislation that barred firms from receiving funds related to online gambling, and effectively forced PartyGaming, 888 Holdings and others to shut their U.S.-facing operations.