Online Gambling

EcoCard will cease allowing its e-wallet to be used by US customers for online gaming transactions near the end of August. I suggest that all US players make a withdrawal of all funds in their EcoCard accounts by August 20 — just as a precaution against something akin to the NETeller problems that we all just had to go through.

eWalletXpress is an e-wallet available to US players. And here are a variety of sites that accept this e-wallet and that accept US players from all states.

• Bingo: World Bingo Club – 200% bonus on your 1st deposit over $20 (no max)
• Casino: Superior Casino – 100% bonus on your 1st deposit between $25 and $250
• Poker: Rumble Poker – 100% bonus on your 1st deposit between $50 and $100
• Sportsbook: USDBET - Use bonus code OCGDMEDL to claim an exclusive bonus

If you have not already requested a payout from NETELLER, go ahead and do it. I requested mine, and two days later, I got my money. Woo Hoo! This ends a months-long struggle for US customers to be paid the funds that they were due.

As Homer would say, “Woo hoo!”. 

The NETELLER Plc Group has announced that the distribution of funds to its US members will begin on July 30, 2007.

Well, now the date is the end of July that we may be able to get our money. Read on for the announcement from NETeller.

Wednesday, 18 July 2007 – NETELLER Plc (LSE: NLR), the independent
global online payments business, today announces that the Company has
entered into a Deferred Prosecution Agreement (‘DPA’) with the United States
Attorney’s Office for the Southern District of New York (‘USAO’). The
DPA represents the resolution of the USAO’s investigation into the
Company.

Please read the full release here:

http://www.neteller-group.com/press/en/136.htm

NETELLER announced plans to resolve its investigation with the US authorities by July 13. By that date, there should be a firm plan to distribute owed funds to its US-based customers. I don’t know about you, but I could use the cash that they owe me!

EcoCard has stepped up to fill the NETELLER void. If you do not already have an account, you should sign up for one. You can use it to play at an increasing number of online gambling sites, including Villento Las Vegas and Suite 332 (my new favorite!).

Canada and Turkey are the latest markets that NETeller will no longer serve.

I wonder how they are going to stay in business?

Today, NETeller issued a press release that stated (in part) “that within the next 75 days it will announce a plan by which funds will be distributed to US customers”.

Just to make sure everyone understands, it has been two months since NETeller stopped servicing US customers. And now it will be two and a half more months before they announce a plan to pay us. I suspect that the plan will involve another 90 days before we get paid.

So let’s see… what’s 5% interest on the millions that they have in their coffers that they owe to us? I bet it is enough to pay for their legal troubles, at least.

I’ve already signed up for an account at YouTeller, anticipating that they will capture a large part of the market that was left underserviced by NETeller’s withdrawal from the United States market last month.

Read more about how YouTeller is going to service the United States market in their press release.

Effective immediately, NETeller can no longer be used by US account holders at online gaming sites. This announcement follows a similar announcement by Firepay in October 2006.

This announcement should come as no surprise, given that:

1. the NETeller Group is a publicly-traded company that needs to protect its shareholders and executives from prosecution under the UIGEA
2. the US detained two former NETeller executives earlier this week 

In fact, if you read my blog, you’ll see that I outlined why the clock was ticking for NETeller back in November 2006.

In any event, NETeller exiting the gaming market for US account holders will be a temporary roadblock for US players. If recent history is any guide — and it should be — US players will quickly find a way to play the games the want, at the stakes they want, at any site that will accept them.

I have done a fair amount of research and thinking about this issue, and wanted to share my findings and thoughts on the topic.

1) Prior to the passing of the Unlawful Internet Gambling Enforcement Act of 2006, eleven states had laws on the books that specifically ban all forms of online gambling. These states are: IL, IN, LA, MI, NJ, NV, NY, OR, SD, WA, WI. Online gambling continues to be considered illegal in these states. As for the other 39 states, the question of whether online gambling is illegal continues to be unanswered.

It bears noting that I have seen no reports of any player in the United States being prosecuted under any anti-online gambling state laws.

2) The Act did nothing to alter, curtail, or extend state laws regarding online gambling. Thus, it did not make online gambling illegal in all states.

3) The Act does place restrictions on the financial transactions that occur in connection with online gambling; it restricts electronic fund transfers and the use of credit cards in connection with such wagering. This means that players will no longer be able to make wagers, or collect winnings using electronic fund transfers, credit or debit cards, or some other online payment systems — once the US Treasury Department publishes its regulations for enforcing the Act in the summer of 2007. As a law passed by Congress, this law will apply to all states.

In response to the Act, online gambling sites have done one of three things with respect to US-based real-money players:
1) Continue to accept US-based real-money players from all states
2) Accept US-based real-money players from states other than the states in which online gambling is specifically outlawed (meaning no players from the states listed above)
3) Closed their site to all US-based real-money players

Also in response to the Act, Firepay (an online payment system) stopped handling gambling-related transactions. NETeller (another online payment system) continues to handle gambling-related transactions, and has stated that they are monitoring the situation. Blog update: NETeller has also exited the US market.

So what has the Act really done? In and of itself, it certainly did not make online gambling illegal; the state laws on this issue continue to apply as they did before the Act was passed. It has reduced the number of sites where US players can gamble, and it forced US players to find creative ways of funding their online gambling accounts. It certainly raised awareness in the United States (and the world for that matter) about online gambling, but my sense is that it still has not yet had a major impact on behavior. Depending on the enforcement parameters that the US Treasury Department comes up with next year, the Act may have little long-term impact on online gambling in the United States.