NETELLER PROVISION OF SERVICES TO US CURRENTLY UNDER REVIEW

31 October 2006

HEMSCOT
Todney Hobson
31/10/06 13:27

Surprisingly strong quarterly figures from the online money transfer business has helped to assuage fears over the impact of anti-gambling legislation in the US.

Surprisingly strong quarterly figures from the online money transfer business has helped to assuage fears over the impact of anti-gambling legislation in the US.

NETeller signed up 3,218 customers in the third quarter to take the total to nearly 3.19m. Active customers totalled 619,550, up 16 % from 535,853 in the second quarter, and average daily receipts rose from $4.66m to £5.31m.

So far so good. The problem is that two-thirds of customers are in the US, where President George Bush has signed a law banning online gambling, and 77% of active customers are over there. The latest figures cover the period immediately before the axe fell.

Chief executive Ron Martin says NETeller has performed well during the quarter, continuing to grow its business geographically and to attract new customers and merchants.

However, he admits: ‘The impact of the recently passed Unlawful Internet Gambling Enforcement Act in the US is likely to change the future direction and nature of our business fundamentally.’

He says he is constantly re-examining the group’s position in the US market and its provision of services there is currently under review.

NETeller launched sites in Sweden and Denmark during the third quarter, adding to existing sites in the US, UK, Canada, France, Germany, Italy,

Spain, Japan and China. Further launches into Poland, Turkey, Australia and Brazil are planned for the fourth quarter.

Since the end of September trading has continued to show ‘positive growth trends’ in sign ups and average daily receipts. However, Martin says it is difficult to predict trends or the outcome for the remainder of the year ‘given the current uncertainty regarding the company’s principal market’.

The shares hit 900p last September but have fallen badly over the summer from 840p in April on mounting concerns that it will lose revenue from transferring online gaming money. Today’s reassurance prompted a rise of 7p to 149p

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