Anti Online Gambling: Feds Play ‘Whack-A-Mole’ With Online Payment Processors

Do you ever feel the whole world is against you?

Have you shouted, “stop the world I want to get off?”

• July 2006 David Carruthers, chief executive of BetOnSports, the AIM-listed bookmaker, is arrested in Dallas.
• Sept 2006 Peter Dicks, then Sportingbet chairman, is arrested at JFK airport in New York, on request of Louisiana state authorities.
• Sept 2006 Manfred Bodner and Norbert Teufelberger, joint chief executives of Bwin, the Austrian internet betting group, are detained in Monaco on charges of violating France’s internet gaming laws.
• Citadel, INSTAdebit, SolidPay, Moneybookers and several other e-wallets have left the U.S. after NETeller co-founders Stephen Lawrence and John LeFebvre were arrested and charged with money laundering.

How long will this persecution last….not for long! These events just makes my job more interesting….

Online Betting & Digital Currency….”I’m Back Baby!”

With the pull out of NETeller from the US market, many smaller firms are moving to pick up those clients. More and more each day I’m seeing press releases, newsletters and emails like these:

“Curacao (PRWEB) January 20, 2007 In a recent press release, USDBET has added new payment processors known as ‘Make a Deposit,’ and Ewallet Xpress…USDBET also commented that they are adding Click2Pay, and Epassporte shortly.”

“Phil Hellmuth Jr.’s UltimateBet.com (online poker) e-mail newsletter is now encouraging players to use other “safe, secure and similar banking methods already available,” such as ePassporte, ATMonline and CLICK2PAY.”

The recent flurry of legal activity against online gaming and payment processors has only served to fracture the market. Where one large processor has vanished a dozen smaller ones now are taking its place.

In the coming months, I believe, more brand new offshore payment processors in foreign locations are sure to be popping up.

It is impossible to kill off Internet Gambling. Especially–US players.

Perhaps these recent problems will slow the rapid growth (like we have seen in the past year or two) of online gaming, but ‘online gambling’ is not going away.

In fact, I’ll wager, that the tech savvy youth of today will also soon return with multiple online US betting solutions for home PC users. One possible nightmare scenario could develop if payment processors, casinos and sportsbooks start appearing from all corners of the globe and just as fast vanish a month or two later. Demand for Internet gambling is far too large for US players to just throw in the towel. Especially now, with “SuperBowl Sunday” closing in…greed will find a way.

I have a tremendous amount of respect for the online police, US federal agencies and other law makers that keep the Internet safe, but if they can’t put an end to SPAM, how are they going to stop gambling which is an even bigger money maker? Each day, my email box is full of SPAM and some of them are even casinos, licensed and not licensed. I hate it but what can you do?

Its the same with online gaming and someone has to process those payments.

With this new persecution of online gambling and payment processors, the federal agencies seem to be just playing a big game of ‘whack a mole’. They hit one and another immediately pops up. I think it would have been better just to tax them.

It almost seems that gaming operators had some indication of NETeller’s downfall. Yes, the arrests happened rather suddenly, but most of the industry seems to be taking it in stride just like when PayPal pulled out back in 2001.

For the Internet, the loss of NETeller and the others just seems like a speed bump on the road of life…it won’t stop anythong but it will slow things down. Back-up payment processors were being added to most gaming companies within days of the bad news.

David Stewart, an online gambling expert and lawyer with Washington, D.C.-based firm Ropes & Gray LLP had this to say,

“What you’re finding with the Internet gambling sites is the publicly traded ones and prominent ones are leaving,” and “The entities that are more visible and are more transparent can’t take the heat,” he said. “And all the rest of them are still in the business.”(1)

Many British based gambling operations have withdrawn from the market and we are seeing some consolidation. The following British companies have already withdrawn from the US: PartyGaming PLC, BetOnSports PLC, Sportingbet PLC and even Leisure & Gaming PLC.

However take a closer look and you will find Bodog.com, PokerStars.com and FullTiltPoker.com are still in operating from offshore locations.

(1) Quote from Maderatribune.com