The NETELLER OUT, US INTERNET GAME MARKET IMPACTS

NETeller founders Stephen Lawrence and John Lefebre have been arrested and charged with money laundering, and the popular e-wallet NETeller has not allowed American players to use its services to transfer money to internet gambling sites.

According to a 2006 interim report by NETeller, a publicly traded company listed on the London Stock Exchange, NETeller processed more than $7 billion in financial transactions each year. The Isle of Man-based NETeller said 75% of its sales came from the U.S., and most of those transactions are related to internet gambling. The decision prompted several popular internet gambling sites to scramble to promote alternative third-party payment processors on Thursday.

“It’s going to be hard for (Internet gambling sites that allow American players) to continue doing good business without Neteller,” said Jez San, president of Internet poker room PKR.com , which decided not to allow real money games for American players when it was released last fall. “Whatever they end up using to replace them in the short term, it’s definitely not going to exist in the long run.”

NETELLER isn’t the only payment processor pulling out of Citadel Commerce in the U.S. Both Central Coin and Nexum Financial (Full Tilt Poker’s “Instant eCheck” provider) have decided not to allow U.S. players to do business with internet gambling companies.

According to a press release from the parent company of Vancouver-based Citadel Commerce, “ESI Board of Directors is a recent decision taken by the U.S. Department of Justice in light of enforcement actions against financial processor executives.” 안전 토토사이트

Internet gambling giants such as Party Gaming and Sporting Bet voluntarily exited the U.S. market when the Enforcement of Illegal Internet Gambling Act was passed in October 2006. FirePay, a third-party payment processing company similar to Enteller, decided to stop allowing Americans to trade on Internet gambling sites in the aftermath of UIGEA, and Enteller and others took a wait-and-see attitude.

“It doesn’t seem to have really affected how much gambling people do,” said David G. Schwartz, director of the Center for Game Research at UNLV. “It has hurt publicly traded companies or companies that are legally more exposed, but I don’t know if it has really changed behavior that much.”

Sites such as Poker Stars and Full Tilt Poker actually benefited from UIGEA as the player base surged when party poker left the market. However, while many internet gamblers were willing to switch to new platforms, it remains to be seen whether they are willing to switch to new third-party payment providers. Most sites that still operate in the U.S. are trying to limit any damage that could be caused by NETeller’s exit.

“NETeller’s decision has no impact on our business at Full Tilt Poker, and we remain committed to American players,” the Full Tilt website said Thursday morning. The site also highlighted other money management options that are still available to American players. However, San believes that the reduction of options for payment processors will continue to have an impact on internet games in the U.S.

“Anything that is ‘illegal’ can also be extradited at the federal level,” San said. “No executive is ‘safe’ in a First World country that has an extradition treaty with the United States, which is most First World countries. And for good reason, banks in Third World countries will not be trusted by their customers.”

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