US government stealing millions from gamblers


Jun 15, 2004
A recent press release from Neteller says that up to $55 million in their way between Neteller nad gamblers were consficated by the US authorities.

They state that they are looking for ways to return money to US customers.

$55 million is not much money for Neteller. Losing this amount of money is not what will drive then bankrupt, as they should have over $150 million in cash. Not to count the small companies they own which are owrth over $50 million.

Here is the full press release:

Press Release
NETELLER Works to Return Funds to US Customers After US Withdrawal

8 February 2007 - NETELLER Plc (LSE: NLR), the leading global independent online money transfer business, today issued the following update with regard to its US business and criminal charges against two of its founders.

On 19 January 2007, at the request of the Group, the Group’s legal advisers met with representatives of the United States Attorney’s Office for the Southern District of New York (“USAO”) to clarify the Group’s position with respect to the complaints brought on 16 January 2007 against two of the Group’s founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETELLER. In that meeting, the Group pledged to cooperate with the USAO, indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to US customers.

The discussions between the Group’s legal advisers and the USAO are ongoing. The Group is, under advice of its legal advisers, commencing production of documents and intends to cooperate with the USAO in its investigation.

Following upon the complaints dated 16 January 2007, banks in the US began declining to permit transactions involving the Group through accounts maintained at one or more automated clearinghouses in the United States. Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group’s transactions. To the best of the Group’s knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa.

As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position. “The return of funds to our US customers is a top priority for NETELLER” said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.

To the Group’s knowledge, no criminal action or proceeding has been brought against the Group, its current officers or directors by the USAO. Nevertheless, there can be no assurance that the Group will not be charged in a criminal action at some subsequent time. The Group intends to work with the USAO to seek a negotiated resolution of any allegations relating to its US activities. Any resolution of this matter may lead to potential sanctions against the Group including material financial penalties, fines and forfeitures.

It is emphasized that in line with the Group’s standard business practices for all customers, funds held by the Group for US customers are held in segregated trust accounts. The Group’s own cash position remains strong and the Group currently has sufficient working capital to fund all its customers’ balances as well as ongoing requirements of the business.

NETELLER remains committed to developing its business in line with its stated strategic objectives including geographical and product diversification for all markets. The Group will focus on its continuing business and the opportunities available in the growing markets of Europe, Asia and the Americas outside of the United States. Since the Group’s withdrawal from the US market on 18 January 2007, average daily new account sign-ups of new customers from non-US markets has been around 1,400. This compares to average daily sign ups of 3,303 for the year to 31 December 2006. Daily fee revenue since 18 January 2007 has averaged over US$ 200,000 per day (excluding any revenues from Netbanx, 1-Pay and interest income). These metrics demonstrate the resilience of the Group's ongoing business. NETELLER customers not resident in the US continue to be minimally affected by this withdrawal from the US market.

In view of the continuing uncertainty, the Group's shares will continue to be suspended from trading on AIM for the time being. Further announcements will be made as appropriate.
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Yep... and it sucks...

And if G911 is right, it's no wonder our gambling friends across the pond are experiencing delays...

What a gigantic mess! NETeller continues to struggle sending out payments after Barclays Bank drops the fledgling merchant. Online gambling companies continue to do business with NETeller outside the US market however and some are hoping that the firm's securing of a new bank in Sweden will help expedite US payments.


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I was watching the Professional Poker Tournament on television tonight. The commercials were very telling IMHO. They talked about responsible gambling, gave links to gaming sites, and some local spots for poker rooms I didn't know we had in our town.

Do you think this may be foretelling what is coming? I really think the US government wants a piece of the pie at the very least or the whole pie if this administration has their druthers.

This was a US tournament btw.
It's a safe bet (imo) that the big US land gambling names will be in the online gambling business and going after US players sooner rather than later.

They're not going to let a minimum $6 billion business go to waste....and the politicians will fall into line.
IMHO, it is way more erratic than we think.

Some senator's personal agendas
polls timing, and inner party dynamics.
international etc.
Tax interests.

You can hardly know what will be next.

For the meantime, the market maybe dying quitely. I hope it will recover, but who knows.
see here for a report about the decline in USA online poler play.

It's a safe bet (imo) that the big US land gambling names will be in the online gambling business and going after US players sooner rather than later.

They're not going to let a minimum $6 billion business go to waste....and the politicians will fall into line.
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Consider this:

All Prima rooms are ultimately in the hands of MG. Prima rooms can no longer process ACH and Check withdraws. What withdraw options are left for the many thousands of USA players on Prima?


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