NETELLER RELEASES UPDATE ON US ONLINE GAMBLING FUNDS

8 June 2007

But US players' funds will be frozen for longer, without interest and shares remain suspended

Besieged Isle of Man e-wallet Neteller issued a press release updating the public on its situation this week, but it wasn't the news many have been waiting for - in fact it followed pretty closely the wording of previous announcements (see previous InfoPowa reports)

Investors will be disappointed to learn that the company's shares, suspended on the London AIM since January this year, are to remain in limbo for the foreeable future. The reason? ".....the continuing uncertainties the company faces although the company is making progress towards achieving restoration of trading."

And the full year results ended December 31 2006 will not be immediately forthcoming, either - the announcement advises that Neteller is, surprisingly still working towards the finalisation of its audited annual results and is yet to announce some six months into the new financial year the date on which the 2006 numbers will be published to the market.

US players receive little in the way of good news, either. Interest on their frozen funds, tied up since January will not be paid by Neteller according to its announcement, which deals rather brusquely with the subject thus: "In accordance with NETELLER's Terms of Use, no interest on account balances will be paid." Message board exchanges around the Internet indicate there are many players with large balances in their Neteller accounts, and this will be an especially hard blow for them.

US players who hoped to have their funds returned within the 75 days mooted by Neteller on March 21 will be disappointed by the news that although Neteller has agreed to a plan for the distribution of funds to its US customers, it's not going to happen right away.

Advising that the firm is still "cooperating" with the US Attorney's Office for the southern district of New York, the announcement says that the big payout won't happen until the US investigation is concluded...and that could take until July 13 or longer.

On 21 March 2007, Neteller announced that it signed agreements with the USAO and Navigant Consulting, Inc. to develop a plan for the distribution of funds to US customers (see previous InfoPowa report). The current statement reports that: "Since then, in accordance with the agreements, the company has worked with the USAO and Navigant to develop the plan. The Distribution Plan is now agreed upon, and the company anticipates implementing the plan upon the resolution of the investigation."

The agreed distribution plan details the process and mechanisms for the return of funds to US customers. For now, the company advises US players that:

US customers will be able to access their NETELLER accounts online for a certain time and make a request for their funds.

In accordance with NETELLER's Terms of Use, no interest on account balances will be paid.

NETELLER will not charge fees to customers to process requests for funds.

Funds will be distributed either by electronic transfer to the bank account on record with NETELLER or by a cheque to be sent to a mailing address as confirmed by the customer.

If a US customer has a bank account already registered with NETELLER, funds transfer will be by electronic transfer subject to confirmation by the customer that the registered bank account remains valid.

US customers will receive the entire balance of funds in their account; no requests for partial payments will be processed.

US customers cannot use their accounts for any transaction other than to request the funds.

Further information will be communicated to NETELLER's US customers via email, through our website and through a press release once the date for implementation of the Distribution Plan is finalised.

Neteller has also revised upwards its estimate on how much cash has been seized by the US Attorney's Office. Neteller originally informed the market that approximately US$ 55 million had been seized by the USAO or otherwise restricted by third parties. Following further consultation with the USAO, the company currently believes this amount could be up to approximately US$ 60 million.

Ron Martin, Group President and CEO of Neteller said: "The agreement on the Distribution Plan represents a milestone in our cooperation with the US authorities. While we are disappointed not to have been able to return funds to our US customers at this point, we believe that the steps we have made in our discussions are significant and we hope to be able to announce further progress with the USAO by 13 July 2007."

Earlier this week, we reported on a further continuance in the case against Neteller founders Stephen Lawrence and John Lefebvre, who remain untried and on bail of $5 million each after six continuances since their arrest and detention in January this year. It will now be at least the end of June before they appear in court.

Online Casino News courtesy of InfoPowa