Neteller

[SlyCin56]

These guys are not US citizens - they're Canadian citizens.

They're not US residents - they're residents of other countries.

They ran a company in Canada, not breaking any Canadian laws (an assumption).

I'm shocked & amazed at the audacity of the US Gov't. who apparently believes their laws apply to every person in the world, and who apparently believes they're going to be able to control & legislate the internet for the entire world. What is the US trying to become???

Is Canada going to try to protect their citizens? If they do, what's that going to do to US/CA relations?

[daweller]

Originally Posted by SlyCin56

These guys are not US citizens - they're Canadian citizens.

They're not US residents - they're residents of other countries.

They ran a company in Canada, not breaking any Canadian laws (an assumption).

I'm shocked & amazed at the audacity of the US Gov't. who apparently believes their laws apply to every person in the world, and who apparently believes they're going to be able to control & legislate the internet for the entire world. What is the US trying to become???

Is Canada going to try to protect their citizens? If they do, what's that going to do to US/CA relations?

Stephen Harper will probably just bow down to George Dubya, like the good little lapdog that he is.

[MichaelCorfman]

This is a serious situation both for Neteller and for the two founders of Neteller who were arrested.

It is serious for the two founders because money laundering is a serious offense, and there are reasonable grounds to say they violated money laundering laws. The US considers it a crime if you send money through intermediate banks and bank accounts for the purpose of hiding the source or destination of the funds being transfered. The government will argue that is exactly what the founders of Neteller have done. I don't know whether the governement will be successful. But I wouldn't give them good odds for being released from US custody in the near future. The transactions cited in their arrest warrants tied neteller back directly to providing funds to sportsbooks, and the US DOJ is on uncomfortably solid ground in its assertion that internet sports bets are illegal, and thus that the founders of neteller were knowingly providing money laundering services for the purpose of supporting illegal sports betting by US citizens. It does not matter that much that they are not US citizens themselves. Foreigners that commit crimes and then are present in the US are subject to arrest by US law enforcement just like David Carruthers.

It is serious for Neteller itself for a variety of reasons, starting with the fact that two important shareholders are in jail, and other directors and officers have some obvious cause for concern. But the biggest issue is that even without further government actions, banks may take proactive steps to stop funds transfers between themselves and Neteller. It is simply going to become harder for Neteller to provide the services it currently provides to the online gaming industry even if it should decide it wants to ignore the arrest of the two founders.

While the arrest of the Neteller founders was not a result of the unlawful internet gambling enforcement act, the consequences will likely be more severe given that the act is in place. Banks are naturally conservative, and generally don't like to engage in activities that may get them into trouble. The publicity surrounding the arrest of the Neteller founders together with the conservative nature of bank officers, will mean the effect will be more far reaching than would otherwise be the case.

Today was definitely not a good day for the industry. And it will not be the last bad day we will see.

Michael

[greek39]

Not a good day in the slightest. I am growing very tired of the ethnocentric attitude of the U.S administration. What else will they be pushing on the rest of the World? Perhaps slap a embargo on every country the doesn't agree with their policies.

The Grumbling Elephant a former Prime Minister of Canada called the U.S government. The world's biggest democracy I don't think so. Maybe before Bush.

greek39

[Ziggy]

Michael:

I agree with your statement about the conservative nature of banks.

Since banks cannot always determine where these funds actually are coming from through Neteller, then, are you saying that the banks will somehow prevent Neteller access entirely from the U.S. (or maybe by the government by blocking access to Neteller)?

[SlyCin56]

Ok, I'm having a hard time getting my head around the "money laundering" application in this situation - maybe you can help me, Michael?

As I understand it, when the "money laundering" law was first created it applied to "dirty" money being made "clean"; i.e., the money the anyone made with their illegal activities (drugs, illegal gambling, etc) was "dirty" so it was funnelled thru their legal activities (businesses) to make it "clean", therefore making it spendable (and taxable) without anyone (the govt.) wondering where the person's money was coming from. Correct?

But now they seem to be applying these "money laundering" charges to a much wider range of activities, a whole lot of which seem to me to be "stretching" the law.

What I really don't understand is how it applies to the money NT was transferring around. It wasn't their money, so it wasn't their income to be made from "dirty" to "clean" - so how are they being charged with that?

I know you're not an attorney, Michael (and I'm assuming you can't read the minds of the US Attys ) but maybe you understand this better than I do & have a simple way of explaining this to me/us?

[Dominique]

Apparently Neteller has already blocked instacash tansactions from US residents.

Years ago the credit cards started not allowing deposits to online gambling institutions. The industry suffered but got over it.

I should hope the casinos have been aware that current depositing methods would suffer after the recent law and haven't been sitting idle!

[greek39]

Thank you Michael, GPWA and other contributors for keeping us well informed. Without this information I would be lost.

greek39

[mojo]

If neteller is unable to hang in there, I have already received casino mails (as a player) suggesting alternate payment methods such as Click2Pay and PaySpark. I will need to research these as I havnt used them. I am also unsure if whoever steps in to fill the void will be under close scrutiny by the DOJ as well or if Neteller made bad judgements with sportsbetting?

Thanks for the updates and keeping us informed.

Mojo

[casinoranking]

Payspark is based in Lebanon so there is no way they are going to comply with the wishes of this corrupt government. But since payspark is owned by microgaming you can guess what casinos they service.

As for the other payment processors I have no idea how widespread they are or the market penetration they have.

By the way Slycin your understanding of money laundering mirrors mine. But lately this term has been abused and is used pretty much to do with anything that involves financial transactions.

This could be especially serious for affiliates. Since US affiliates are earning money from offshore casinos which could be considered dirty money and they are bringing that money in the country, they are paying tax on the proceeds of these illegal activities. They could then hit you for money laundering. But if you dont pay tax its then tax evasion. Its a catch 22 and I dont think anyone can win. This is all going to depend on how much information neteller gives away. I just hope that not too much was based out of Calgary Alberta as these financial records will be available on demand.