Processors Step into the Void Left by Neteller
Payment processor Neteller PLC last week pulled out of the lucrative U.S. online gambling market, but industry observers are saying this week that other "e-wallet" vendors are now coming market, and will replace the firm quickly.
Neteller's position as a publicly traded British company forced it to stop handling U.S. betting transfers as of the end of last week. Neteller had processed $7 billion in transactions in 2005 and $5.1 billion in the first half of 2006, primarily from American clients at online betting sites.
"With the Internet gambling sites are the publicly traded ones and prominent ones are leaving," said David Stewart, an online gambling expert and lawyer with Washington, D.C.-based law firm Ropes & Gray. "The entities that are more visible and are more transparent can't take the heat. But all the rest of them are still in the business."
Private offshore site producers continue to run such, including Bodog.com, PokerStars.com and FullTiltPoker.com.
American bank regulators are coming up with rules to enforce the online gambling prohibition by this July.
Other Brands
But, brands other than Neteller are carrying on in the U.S. For example, UltimateBet.com, the online poker site backed by professional gambler Phil Hellmuth Jr., sent out an e-mail newsletter Thursday encouraging its players to use other "safe, secure and similar banking methods already available," listing such brands as ePassporte, ATMonline and CLICK2PAY. "So get UB to the top of your list and let's make some MONEY!" it reads.Internet blogs also lit up with players discussing the best ways to keep gambling online.
"Just set up both a click2pay account and an Epassporte one," wrote Bacaluk on poker forum PocketFives.com.
According to Michael Bolcerek, president of the online poker lobby group, Poker Players Alliance, the withdrawal of brand name providers would encourage the emergence of other dealers.
Poker magazine publisher Eric Morris of Bluff Media LLC said the withdrawal of PayPal and major credit card companies from the U.S. online gambling business in 2001 caused a panic that didn't last.
"The industry took a bit of a dive and came back stronger than ever before," he said.
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