Unlawful Internet Gambling Enforcement Act of 2006

[AussieDave]

NETELLER US Member Update: 1st October 2006

To protect its customers money, all deposited, in-transit, and un-cleared funds are held in Trust Accounts.

Hypothetically if a wire transfer was sent from Country A to Country B (Neteller)

But had to pass thru an intermediary Bank in Country C (USA), could this bank refuse to forward these funds on?

Could it also choose to confiscate these funds?

Just some food for thought.

 

[Lord_Have_Mercy]

Online gaming in crisis over U.S. ban

Online gaming firms faced their biggest-ever crisis on Monday after U.S. Congress passed legislation to end Internet gaming there, threatening jobs and wiping 3.5 billion pounds ($6.5 billion) off share prices.

Britain's PartyGaming Plc , operator of leading Internet poker site PartyPoker.com, and rivals Sportingbet and 888 Plc said they would likely pull out of the United States, their biggest source of revenue, and warned on future profits.

"This development is a significant setback for our company, our shareholders, our players and our industry," PartyGaming Chief Executive Mitch Garber said.



The House of Representatives and Senate unexpectedly approved a bill early on Saturday that would make it illegal for banks and credit-card companies to make payments to online gambling sites.

The measure was sent to President George W. Bush to sign into law, which most analysts see as a certainty.

"We believe that this will have a very material impact on the long-term prospects of online gambling, and in particular poker," said analyst Julian Easthope at UBS. "This will lead to a rapid decline in the use of online poker sites."

PartyGaming generates about 78 percent of its revenue from the United States, while Sportingbet gets about 62 percent there.

Shares in PartyGaming, which rakes in nearly $4 million a day from its 19 million customers, fell 58 percent by 0905 GMT.

Sportingbet, which owns sportsbook.com and ParadisePoker.com, lost 58 percent, 888 was down 35 percent and Austria's bwin.com fell 16 percent.

CRACKDOWN

Online gaming exploded in 2005 with a string of high-profile company flotations in London, which has become the industry's corporate center.

The bulk of revenue has always come from the United States, but operators were located in offshore jurisdictions like Costa Rica and Antigua due to fears of prosecution in the United States, where gaming and betting laws had been ambiguous.

Shares in Sportingbet and BETonSPORTS have been hammered recently after senior executives were arrested on charges of illegal gambling in individual U.S. states.

Meanwhile, big American gaming corporations like Las Vegas-based Harrah's Entertainment Inc. (HET) were forced to sit on the sidelines as gaming money streamed out of the country.

PartyGaming said in a statement, "If the President signs the act into law, the company will suspend all real money gaming business with U.S. residents."

"Any such suspension would also result in the group's financial performance falling significantly short of consensus forecasts for 2006 and 2007," it added.

Sportingbet said a ban would hit trading, and said it had scrapped a planned merger with World Gaming as a result.

888 Plc said the move would hit its results, as did gaming software provider Playtech , whose shares fell 51 percent.

But analyst Paul Leyland at Arbuthnot Securities said Playtech was relatively well positioned. "The only company for which you could categorically say that redeployment is easy is Playtech," he said. "But for the others it's much more difficult."

Any ban would also hit payment processors like Neteller Plc and Optimal Group's (OPMR) FireOne subsidiary.

Neteller Plc said the legislation would have a "material adverse effect" on its U.S.-facing business, and its shares also more than halved in value.

 

[paul02085]

Last i heard Party stock was down almost 60%. The sky has fallen.

 

[Westland Bowl]

All I can say is ..." It's darkest before the dawn ". Many people were in fear of the Y2K computer meltdown but it turned out to be just a pfffft of fear smoke. I believe the same in this scenario.

 

[Westland Bowl]

Meanwhile, big American gaming corporations like Las Vegas-based Harrah's Entertainment Inc. (HET) were forced to sit on the sidelines as gaming money streamed out of the country.

So Las Vegas and other land-based casinos think that online gamblers would have gone to their casinos if it were not for online casinos??? Oh please!!! The travel and expense to go to land casinos is not worth it, unless maybe you count cards real well and/or live near them.

Where on earth can you find a casino that will have a minimum bet of $1???? All land-based casinos have at the lowest a minimum bet of $5 and only at off-hours of the night. Most have $10 or higher minimum bet limit.

Another thing....I wouldn't have considered going to a land casino if it were not for online casinos. Because of various strategies that I've learned in the online world, I would like to try them on "real" cards....someday.

I wonder just how much business Las Vegas, et al. are getting BECAUSE of online casinos? Because of the accessibility of online casinos, land-based casinos would have not seen any of it anyway!

 

[Casinomeister]

I wonder just how much business Las Vegas, et al. are getting BECAUSE of online casinos? Because of the accessibility of online casinos, land-based casinos would have not seen any of it anyway!

Excellent point. Before I got involved in this industry, I just went to Vegas for the buffets!

 

[Casinomeister]

Say goodbye to Crypto:

Say goodbye to Crypto:

CryptoLogic said Monday it will not take wagers from U.S.-based players in response to the new legislation, which is expected to be signed Monday by the president. The company said it has spent five years shifting revenue sources to Europe and "is positioned for long-term profitability."

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[Westland Bowl]

This article is posted on the Drudge Report. It is so one-sided, it's unbelievable! Once again, the mantra is repeated ...."online betting is illegal". Of course, they confuse the reader in that they don't mention that sports-betting online is illegal, not casino-type games.

Old / Expired Link

These Congressmen have to be the biggest hypocrites there are! To go up on a "moral" stand against online gambling while doing such sneaky tactics to get this online gambling provision into law without debate or consideration of opponents views reveals the Godlessness of these people. Foley was the tip of the iceberg.

 

[Simmo!]

Say goodbye to Crypto:

CryptoLogic said Monday it will not take wagers from U.S.-based players in response to the new legislation

So that's Intercasino gone to the US then Crypto are a publically listed company...all PLC's will follow this course I believe....they need to to stop their shares falling from investors who haven't got a clue what this all means. One of the problems with going public - your decisions can be controlled by people who don't understand your business sector.

 

[Casinomeister]

...they need to to stop their shares falling from investors who haven't got a clue what this all means. One of the problems with going public - your decisions can be controlled by people who don't understand your business sector.

Yep - that's how I'm seeing it. But it's throwing the baby out with the bath water. It pretty ironic - damn frustrating since US players are getting doubly screwed by people who don't understand this industry at all.

 

[Pinababy69]

Well, damn it Janet!!! I just typed a long ass post, hit reply and got the web page unavailable error.

I'd be interested to see an accurate representation of geographic market breakdown by software provider. I have a feeling that most online operators thought this day may come, and have prepared themselves to (at least temporarily) lose their US customer base. I really believe that eventually the US Government will "see the light" and lean towards regulation and taxation, as opposed to prohibition. Let's all hope it's sooner rather than later.

I can't remember which thread or poster, but someone brought up Larry Flynt. It struck a chord with me because I had the same thought. You don't have to like him, or his business, but you have to admire him for standing up against the Justice system for what he believed was right (and IMO, what WAS right). I thought his magazine was a total rag, but he had every right to publish it. The online gaming industry could use someone like him, someone with enough money and power of their own who isn't afraid to suffer the consequences of their actions. Someone with enough recognition to make people aware of this whole situation. I'd lay money (ha ha) that a large majority of the US population aren't even aware of what's gone on in the last couple of days. And I'd even go so far as to say that a large percentage of non-gamblers may be outraged at the Government's attempts to take away yet one more freedom, in a land that trumpets itself as the "Land of The Free".

I was also curious if any of the US posters here at CM have considered contacting their local radio or tv stations, or maybe local newspapers? Or starting a petition and then doing the above? A small part of the battle may just be getting the word out in regards to what's happening. If I were a US citizen, I'd be doing something, anything.....to try and make my voice heard. Sometimes big things get accomplished with small steps.

 

[prizewagon]

I was also curious if any of the US posters here at CM have considered contacting their local radio or tv stations, or maybe local newspapers? Or starting a petition and then doing the above? A small part of the battle may just be getting the word out in regards to what's happening. If I were a US citizen, I'd be doing something, anything.....to try and make my voice heard. Sometimes big things get accomplished with small steps.

Hi, I am not really new to this forum as I have lurked here for literally years.

I have always valued the Casino Meister's insight, and diligence in his role as a player advocate.

I have personally met him (Vancouver at an affiliate conference) and he's a stand up guy. (that has NOTHING to do with the fact that we both served in Germany, have a penchant for good beer...and it's Octoberfest time too dammit!)

Having worked for a online casino software provider from 2000-2005 precluded me from ever posting here though and frankly given who that provider was, no way was I gonna set foot in here and have everyone here go all Lord of the Flies on me.

For the record though, I was only the webmaster.


Folks that haven't seen this coming haven't seen the signs.

The online gaming industry has been BEGGING for legitimacy and regulation for years but to no avail....you can blame that not happening, in part, on US land-based concerns.

Read the bill and you'll understand.

I feel for all my former coworkers, freinds, and aquaintences that this will affect....this is gonna be tough. Hell, I have a hundred gambling related domains that I am going to have to redo. Buh-bye CPA deals. See ya affiliate checks....sniff.

On a lighter note though the situation bodes well for us here at prizewagon.com. Last year when we started putting together this no download, no deposit, cash prize, texas hold'em site folks just didn't get it.

Our keyword buys just dropped 30% in price now that the ".net" sites have quit barking up the free poker tree.

 

[Flizzin]

If any of my U.S. brothers and sisters need a Canadian Intermidiary to "manage" a few transactions for them in light of the new handcuffs, i'd be happy to help

 

[Rollo]

Good God

I go to sleep for 8 hours and it seems like half the industry has bailed out... I really was expecting a bit more fortitide.

What does Microgaming have to say? If they go wobbly, then it is totally over... it looks like Playtech is nervous. So Bush is expected to sign this thing today? Wow, I never would have expected things to happen so fast.

I guess instead of asking who's out... we should start asking, what casinos, sportbooks, and poker rooms are still in.

It looks like Sportingbet and Paradise Poker are not resigned to bailing... yet. Pokerstars is out.

I gusss Casinomeister Deutsch and BOC Guide Español will be in the offing...

 

[silcnlayc]

I was also curious if any of the US posters here at CM have considered contacting their local radio or tv stations, or maybe local newspapers?

I have been writing to the news media locally and CNN, Reuters, governors, senators, even the president...for a long time now and just finished posting on some blogs about the idiocy of this new law...

I am curious as to why the online gaming industry and the Americans, and England (due to the stock market) is just "lying down" and "taking" it without a fight...?? this is unreal..it isn't a law until it's signed and it can be removed (voided) if enough people, pressure comes around.

Why hasn't the holders of gaming stock come forward to fight this?? I am amazed and truly shocked at the lack of action from all the groups this effects..

There can be no change if no one wants it badly enough and it seems that this is holding true for everyone involved.... we are going down like lambs to a slaughter without even a whimper...geezes..

 

[Flizzin]

Old / Expired Link

CNN Article

 

[Pinababy69]

Exellent post Silc!!! And right on the money (see my post in the petition thread).

Honestly, I wish I could help you...Christ, if I lived in the States, I'd lead a friggin march down Pennsylvania Avenue, lol. At least you can say that you did something....besides whine that is.

 

[Westland Bowl]

I think I'll move to Windsor, Ontario, Canada

 

[venetian]

This is all so unreal, I'm very depressed over it. I wrote to Firepay to see what they are going to do. This is their reply;

On 30 September 2006, the United States Congress passed the Unlawful Internet Gambling Enforcement Act of 2006.

The Act, upon becoming law, will prohibit gambling businesses from accepting any financial instrument in connection with unlawful Internet gambling.

The Act will become law upon its approval by the President of the United States, which the Company expects will occur in the immediate near term.

The Act does not define "unlawful Internet gambling" nor does it make unlawful any activities by financial institutions that are not themselves gambling businesses.

The Act directs the United States Federal Reserve and the Department of the Treasury to develop regulations that would direct financial institutions to identify and block certain types of financial transactions connected with unlawful Internet gambling.

The enactment of the Act will have a significant negative impact on the business and results of operations of the Company.

The Companys Board is evaluating the situation and will provide an update when appropriate.


Regards,

Anthony
Risk Management
FirePay Personal Accounts

 

[mgibson99]

Is anyone else sitting on the sideline for now?

Should all U.S. internet gamblers hold off on making future deposits until this gets sorted out? I know that Bush is not supposed to sign the law for another 2 weeks or so, and even then it could take weeks or months before we see any action on the part of the casinos or the e-wallets, but I just don't want to get stuck with money in the bank or money in a casino. Is anyone else sitting on the sideline to see how this pans out?

I am a big deposit player (usually deposit $25-$50k per month), so I am especially concerned.

 

[Pinababy69]

Well Venetian, I can't say that Firepay's reply impresses me too much. They don't make it sound very promising. But as many have mentioned, give it some time.....ways around this will be found.

 

[Westland Bowl]

For all the bluster that has and is still going on, there are still quite a few casinos offering bonuses and specials on the Casinomeister home page!

 

[Simmo!]

My take is that it's all about the PLC thing at the moment. When you go PLC you effectively put yourself at the mercy of people (investors) who may not fully understand your industry and are really only interested in their money and as little risk as possible.

Any gambling related company that is PLC or ruled by a PLC probably has no choice in this matter. They will feel they have to pull out simply because they are answerable to investors who, without detailed knowledge of the sector, will pull their risk at the first hint of trouble thus rendering the PLC worthless. And when you are worthless you are dead. The PLC casinos are probably as likely to go out of business if they DO continue to accept US players. That's why you will probably see all the "PLC's" issue the same statement if they haven't already.

BUT when things are clearer, you can bet your last dollar that they will all have left their options open to come back,but in the meantime having minimised risk to their shareprice which is what these press releases are all about. It's how business works.

 

[venetian]

Well Venetian, I can't say that Firepay's reply impresses me too much. They don't make it sound very promising. But as many have mentioned, give it some time.....ways around this will be found.

I have a decision to make, and their reply didn't really tell me what to do. I have a few hundred dollars in my account and am wondering if I should hang in there or just send it to my bank and wait. Although it looks like we won't have anywhere to deposit it after this week, so maybe my decision has been made for me. I read the Drudge and CNN articals and this looks like another 'save the children' from their stupid ass selves bill. Or that's part of the spin. If college kids are going to gamble then they will learn just like the rest of us in the beginning...there are consequences to our financial decisions. But what I do or a 21 year old does with OUR money should remain OUR decision.

 

[prizewagon]

As a US resident, I am going to be pulling my affiliate links from all my websites--(not that I was making bank or anything)

Conversion rates are crappy enough as it is and with 70%-80% of those conversions being attributed to US residents, the business model is now abgefickt. (f'ed up )