Online Casino News and Information

DIGITAL TRANSACTIONS

(March 27, 2007) Merchant processor Electronic Clearing House Inc. and accounting-software giant Intuit Inc. on Tuesday announced that their planned $142 million merger is off. ECHO chairman and chief executive Joel M. Barry laid much of the blame on a federal investigation into Internet gambling that will involve a $2.3 million settlement from ECHO…

In its own release and in a Securities and Exchange Commission filing, ECHO simultaneously announced the end of the merger and that it is a cooperating witness in a federal investigation into the activities of its so-called “Internet wallet” customers that provided services to Internet gambling sites. While admitting no wrongdoing, ECHO said it has entered into a non-prosecution agreement with the U.S. Attorney for the Southern District of New York in which it will pay the federal government—“disgorge” in the company’s terms—$2.3 million. That is the amount of ECHO’s estimated profits by providing U.S. processing and collection services through the Internet wallet business from 2001 until it ended all Web-gambling processing services this February.

Camarillo, Calif.-based ECHO also agreed not to provide automated clearing house processing services to any U.S. Internet gambling business as long as Web gambling is illegal in the U.S. The processor also said it will cooperate with investigators from the U.S. Attorney’s office, the Federal Bureau of Investigation, and other agencies for a year. U.S. authorities have long looked with suspicion on Internet gambling… “We felt like the time and the money spent to get into lengthy discussions and such with the government would have been much more harmful to the shareholders than getting this behind us at this time,” Barry said in explaining the settlement at an investor conference call Tuesday. At its peak, the Internet-wallet business provided less than 10% of ECHO’s revenues, according to Barry.

…in prepared remarks at the start of the investor call, Barry said, “The federal investigation was one of a few reasons that the Intuit transaction did not close….

ECHO said the $2.3 million payment along with other expenses related to the investigation, as well as the aborted merger, would have a negative impact on its near-term financial results…

READ THE COMPLETE ARTICLE AT DIGITAL TRANSACTIONS

Ledger-Enquirer
Wed, Mar. 28, 2007
Associated Press

LONDON - Online gambling company Sportingbet PLC, forced to quit the U.S. after lawmakers effectively made the business illegal, said Wednesday it will transfer the group’s operations to the Channel Islands.

The company said it is making the move offshore because there remains uncertainty surrounding the precise operational requirements of the 2005 U.K. Gambling Act. The Channel Islands are subject to different laws and financial regulation than the mainland U.K.

“With ever-limited time remaining to adopt the eventual requirements, the board has now concluded that its most prudent course of action is to transfer those activities that it anticipates may be covered by the Act to a jurisdiction that has a more defined regulatory environment,” Sportingbet said in a statement.

The company will move all licensable activities from the U.K. to the Channel Islands by Sept. 1.

Sportingbet expects to incur a 13.5 million pound ($26.6 million) charge in the year to July 31 as a result of the move.

Sportingbet has been reorganizing the business since the passage of the Unlawful Gaming Enforcement Act forced out online gambling operators from the U.S.

Its shares fell 3.4 percent to 64 pence ($1.26) on the London Stock Exchange.

Giro Bank received a letter from it’s sister bank in the US telling them they have to stop doing gaming business or lose the or lose the correcesponding relationship, reports Gambling911. In response to that letter, Giro is sending out their own letter to their gaming clients to let them know. It’s not known what gaming companies might be affected, although VIP.com and Pinnacle Sports base their operations from Curacao.

Gaming companies doing business through Giro Bank needs to take note.

GamingIntelligenceGroup
March 26, 2007

NETeller Plc, the British online money transfer business, today announced that it was withdrawing its payment services to online gaming sites for Canadian and Turkish customers.

The move is in response to recent regulatory developments surrounding online gaming in Canada and Turkey, which have significantly increased the risk to the Groups ongoing business in those markets.

From Monday 9th April, NETeller will no longer process online gambling related transactions to gambling merchants from Canadian residents, and from today, no longer accepts deposits using their instaCASH service, either directly or via any online gambling site. Non-gambling transactions continue unaffected.

Following legislation passed in Turkey on 28 February 2007, which prohibits certain forms of online gambling to be offered by unauthorised domestic or foreign companies to citizens in Turkey, NETeller has decided to implement a voluntary phased withdrawal of payment services related to online gambling in the Turkish market. Local bank deposit options for Turkey-resident customers were withdrawn on Friday 9 March 2007 and the Group has ceased processing online gambling related transactions for Turkey-resident customers from today.

According to the NETeller, the Canadian business would likely have contributed significantly to the Group’s revenue and profitability during 2007 and the loss of this business is now likely to have a material negative impact on the Group’s results for the full year ending 31 December 2007. The Turkish business of the Group does not represent a material proportion of the Group’s overall customer base, revenue or profitability.

The Group’s shares will continue to be suspended from trading on AIM in view of the continuing uncertainties the Group faces.

REUTERS
Fri Mar 23, 2007 12:54 PM BST20
By Huw Jones

BRUSSELS, March 23 (Reuters) - German regions have been told by the European Commission to rethink plans to ban online gambling or face possible legal action, an official at the EU’s executive arm said on Friday.

It is the latest clash between Brussels and European Union countries over the betting industry, which is restricted to state-owned monopolies in some EU member countries.

EU Industry Commissioner Guenter Verheugen wrote to German regional state governments on Friday, giving them a month to change a draft treaty on the issue, the EU official said, confirming an earlier Reuters story.

“We asked Germany to reconsider the total ban on lottery and sports betting on the Internet. We think a proposed total ban is disproportionate and there are less restrictive measures, such as mandatory prior registration and strict guarantees on identification,” the Commission official said.

Britain and Austria, two countries with online gaming industries, have challenged the ban.

Shares in Austrian online betting firm bwin (BWIN.VI: Quote, Profile , Research) erased sharp losses after the news Brussels would challenge the ban. Germany is the biggest market for bwin.

ATE Online reports Commission steps up proceedings against discriminatory states.

The European Commission has launched the second stage of legal proceedings against Denmark, Finland and Hungary over what it sees as measures to restrict the free movement of sports betting services. It has demanded, in the form of reason opinion, that the EU member states amend their laws, after calling them unnecessary and discriminatory.

The Commission also added that existing national operators could not be counted as non-profit operations, as they are subject to strict annual revenue targets and often rely on commercial retail outlets to market their services.

If the three countries do not give a ’satisfactory’ reply within two months, the matter will be referred to the EU courts.

eGamingReview reported the Remote Gaming Association (RGA) has expressed disappointment at the 15% rate which the UK chancellor Gordon Brown has set for the new remote gaming tax.

The remote gaming tax rate has been set at the same rate as gross profits tax payable by UK-based bookmakers.

John Coates, RGA chairman, said the 15% rate means the UK government has “effectively turned its back on the industry”. “Under this regime, with the additional VAT and corporation tax for most companies, it would be almost impossible for a UK-based operator to compete with offshore businesses, especially those located in other EU jurisdictions.”

However, Clive Hawkswood, chief executive of the RGA, did say there was some good news for the industry from the budget. Contrary to some fears that the chancellor had plans to levy VAT on participation charges, such a measure was not introduced.

In a seperate article eGamingReview reported in part: The Remote Gaming Association (RGA) was quick to add that the new remote gaming tax rate of 15% effectively closed the door to any online gaming companies returning to the UK. Chairman John Coates said: “Quite simply, under this regime, with an additional VAT and corporation tax for most companies, it would be almost impossible for a UK-based operation to compete with offshore businesses, especially those located in other EU jurisdictions.” Martin Dane, tax principal at BDO Stoy Hayward, said the 15% rate was a “real bolt from the blue”. He added: “Together with no indication that the corporation tax regime will recognise the potentially huge tax cost of becoming regulated, this sounds the death knell for the UK government’s aspiration to be the world leader in regulated remote gaming.”

There are a lot of sites on the internet devoted to political discussion, debate and satire. A new site fast gaining in popularity is SorryAboutOurPresident.com

The site invites visitors to post an apology for the US President to the rest of the world and as can be expected in a forum of this type, there are some pretty heated comments. Some of the posts are humerous, some well thought out, many are sincere. But be aware there are also some ranting and raving with the usual 4 letter and higher curse words. Blatant cursing is filtered but never underestimate a person’s creative abilities when it comes to politics!

Neteller today updated their Frequently Asked Questions section to reflect the announcement made that March 20, 2007 they had struck a deal with the US Department of Justice for the repayment of held funds.

When will US customers get their money back?

The recent agreements between NETELLER, Navigant Consulting, and the US Attorney’s Office (USAO) represent an important step in the process of an orderly distribution of funds to US customers. These agreements outline the terms and a timeline under which NETELLER will work toward distributing the funds. As a result, the Group anticipates that within the next 75 days it will be able to announce the plan by which the funds will be distributed to US customers.

What hasn’t been clarified is the terms Neteller agreed to and what that entailed. Many Neteller customers have a concern that Neteller is voluntarily handing the US Dept of Justice information on US accounts that should be held private.

REUTERS UK

Wed Mar 21, 2007 9:40 AM BST137

LONDON, March 21 (Reuters) - British payment processor NETeller (NLR.L: Quote, Profile , Research) said on Wednesday it expected to announce a plan to distribute funds seized by U.S. prosecutors to its U.S. customers within the next 75 days.

NETeller quit the United States in January, abandoning 65 percent of its business, after authorities there arrested its two founders in a crackdown on online gaming.

A month later, NETeller said U.S. prosecutors had seized funds, stopping U.S. customers from accessing their money.

The firm said on Wednesday it had signed agreements with the United States Attorney’s Office for the Southern District of New York (USAO) and consulting group Navigant Consulting Inc to outline terms and a timeline under which it would work towards distributing funds to its U.S. customers.

“Per the agreements, the group anticipates that within the next 75 days it will announce a plan by which the funds will be distributed to U.S. customers,” NETeller said in a statement.

The firm said in February that the amount of funds seized by the USAO or otherwise restricted by third parties did not exceed $55 million.

The legality of Internet gambling in the United States was ambiguous for many years, but it was effectively banned last October when U.S. President George W. Bush signed legislation outlawing gaming financial transactions.

The big UK stock market-listed companies pulled out just ahead of the ban, although some privately owned Web sites such as Bodog.com and Pokerstars continued to take wagers through payment processors.

NETeller requested its shares be suspended in January, after its Canadian founders, Stephen Lawrence and John Lefebvre, were charged with handling billions of dollars in illegal gambling proceeds.