Thursday, January 18, 2007
Neteller Abandons Gambling Sites for U.S. Residents
In October 2006 the US adopted a law that aimed at crippling internet gambling by attacking payment intermediaries. Credit card companies and PayPal had been scared off years ago, leaving Neteller as a major player in the field. Neteller's initial response to the new US law was to continue to serve the US market, at least until the Treasury Department unveiled its enforcement plan, due by July 10. But the arrest of two of Neteller's founders earlier this week hastened the move -- announced in a Neteller press release today -- to cut the e-gambling link of US residents, including almost 500,000 US customers who were active in Neteller during the fourth quarter of 2006. Today's move by Neteller followed (by one day) the US internet gambling exit by a major Canadian payments intermediary, Citadel Commerce Corporation. Other "e-wallet" firms remain active, but the effective closure of Neteller and Citadel to Americans will cause at least a short-term dent in internet gambling.
Both Neteller (British-based) and ESI Entertainment Systems, Inc. (the parent company of Citadel) are publicly-traded companies and hence more susceptible to US legal pressure. The financial records required of public firms can be used as evidence, and such information formed part of the prosecutorial package against the Neteller founders.