UIGEA Fallout! Don't Worry about the eWallets: Worry about the Network

[gaboonviper]

I know you are all worried about the eWallet situation. What will happen with Neteller? Will ePassporte last? Can MyWebATM be trusted and will it last? What will be with Youteller? On and on. This is of course all valid, but of much more concern are the ACH/EFT networks. As you know these networks are used by all the eWallets to move your money to and from the pokersites. These networks are closely controlled and monitored. Very little gets by them. And to be cut off from these networks is death to any eWallet. Furthermore, despite what you may have heard, it is actually extremely easy to monitor and block transactions to and from poker, or any gambling site. With the huge amount of money transactions done by any eWallet serving the pokersites that wallet sticks out like a sore thumb to the monitors and can easily be blocked from doing any financial transactions to and from the sites. There is no way for the eWallets to avoid this. So the real questions here are: 1.) how long can any eWallet last now that we are in this new post UIGEA environment? ; 2.) How much risk are you willing to take moving your cash in and out of every new eWallet that springs up? ; 3.)How much worse will it get when the UIGEA really kicks in this June?

[EvanJC]

[img]/images/graemlins/heart.gif[/img]

[vinyard]

[ QUOTE ]
This is of course all valid, but of much more concern are the ACH/EFT networks. As you know these networks are used by all the eWallets to move your money to and from the pokersites.

[/ QUOTE ]
While this may or may not currently be trie it certainly doesn't have to be the case.
[ QUOTE ]
Furthermore, despite what you may have heard, it is actually extremely easy to monitor and block transactions to and from poker, or any gambling site.

[/ QUOTE ]
Easy or hard is debateable. Inordinately expensive is not. Small banks cannptcomfortably absorb these costs and even ahuge bank would have to reassess keeping free checking if they were forced to proactivey monitor every transaction.

[ QUOTE ]
With the huge amount of money transactions done by any eWallet serving the pokersites that wallet sticks out like a sore thumb to the monitors and can easily be blocked from doing any financial transactions to and from the sites.

[/ QUOTE ]
I think you are probably an order or magnitude or two off both in how many overall financial transactions and how few poker related transactions go on daily. Presuming that the volume of poker transactions would be enough to throw a flag is at best specious and at worst wholly ignorant.

[Billman]

[ QUOTE ]

While this may or may not currently be trie it certainly doesn't have to be the case.


[/ QUOTE ]

It does if you know anything about banking. Unless you use cash payments and/or physical checks any electronic transfer of money from a US bank to anywhere else will run over these networks.

[ QUOTE ]

Easy or hard is debateable. Inordinately expensive is not. Small banks cannptcomfortably absorb these costs and even ahuge bank would have to reassess keeping free checking if they were forced to proactivey monitor every transaction.

[/ QUOTE ]

You do realize that every bank in the US shut out Neteller in one afternoon, yeah? It's because they froze the ACH/EFT networks. Every small bank doesn't need to monitor every transaction. Small bank issues a EFT request over the ACH network and the ACH network says "Nope. Those dudes are gaming related. Transfer declined, little bank."

[ QUOTE ]

I think you are probably an order or magnitude or two off both in how many overall financial transactions and how few poker related transactions go on daily. Presuming that the volume of poker transactions would be enough to throw a flag is at best specious and at worst wholly ignorant.

[/ QUOTE ]

Yes, because banks don't practice risk management, right? They would never have anything in place to measure unusual activity. Do you think you have to be doing billions of dollars to throw a red flag? I'm glad you don't handle risk management for my bank. :-)

Lots of small transactions can set a risk management system on alert too.

[WichitaDM]

As long as we can get paper checks we can get paid. There is never going to be a way for banks to stop paper checks as long as a 3rd party check processor is willing to write them.

Whether or not the quality of games holds up is a totally different story.

[SamG]

For a while, banks wouldn't cash Bodog checks. And Stars' main check processor pulled out on them.

I don't know much about the industry, so let me ask: why can't banks simply start blocking 3rd party check processors that are known to do business with internet gambling sites?

[MiltonFriedman]

Gaboon hasa valid point. This is precisely what happened to Click2Pay with respect to their US business. (I am not saying Click2Pay is insolvent or that they will not pay everyone, just that it put an operational crimp in their m.o.)

There is a "new" third party EFT/ewallet popping up weekly, but consider what happens to your money or a site's ability to pay if it is tied to a fourth party ACH provider.

I like the OP's post because it strips down to the underlying money flow, a topic largely ignored.

[adanthar]

[ QUOTE ]
For a while, banks wouldn't cash Bodog checks. And Stars' main check processor pulled out on them.

I don't know much about the industry, so let me ask: why can't banks simply start blocking 3rd party check processors that are known to do business with internet gambling sites?

[/ QUOTE ]

Because 1)they likely won't be required to, 2)it'd take them too many resources, and 3)nobody is paying that much attention to *withdrawals*, it's the deposits that the legislation focuses on (and ewallets, of course, get screwed by this.)

Also, stopped clocks being right twice a day etc., gaboon is probably right that no ewallet is particularly long for this world if it deals with sportsbooks/poker's a gray area. But that doesn't really matter, because ewallets are a distant second for convenience to things like the WSEX debit card and others the sites are working on.

[ekdikeo]

The poker sites really need to just hook up everyone with an ATM that deposits and debits from their player account.

[fnord_too]

[ QUOTE ]

3)nobody is paying that much attention to *withdrawals*, it's the deposits that the legislation focuses on (and ewallets, of course, get screwed by this.)


[/ QUOTE ]

Is it feasible to have withraw only ewallets? If they are targetting deposits, and are not concerned with withdraws, why couldn't a company only allow outgoing transfers from sites?

I know the market is smaller, but this service is needed. I think the sites need to be pursuing a safe conduit for withdraws. The way they are doing it now, allowing deposits then withdraws, and only allowing withdraw through a conduit after a deposit has been made through that conduit, is killing the liklihood of ever having a stable withdraw medium. I can live with not being able to move money between sites easily, but I cannot live without being able to get my money with any certainty.

Also, the sites would do well to work together to form some mechanism of transfering money between sites. They should be able to do this, though it would require working together in an intelligent way to enefit their customers, so that pretty much dooms the idea.