Neteller Update...

[adios]

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\As I've stated several times, I'm fairly certain that the U.S. government will try to make U.S. banks quasi regulators. How far will U.S. banks have to go to make sure that the money leaving the bank is not going to a "gambling" site? I'm sure the U.S. government would like to put as much responsibility as they possibly can on U.S. banks for making sure it's not going to a "gambling" site. I'm also fairly certain U.S. banks will try and have that responsibility limited as much as possible. BluffThis's workaround I think is probably going to be viable more or less. It's just a question of how many people want to jump through the hoops so to speak IMO.

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My emphasis in bold: This ignores at least the last four decades of federal regulation of the banking sector. The Federal govt. even under Carter has shied away from increasing expenses and regulation for banks. The banking lobby in this country is mammoth; its niave to expect that they will deliberately increase their own expenses at the cost of their bottom line.

PS If somebody could link me to Bluffthis! workaround I would appreciate it.

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I agree with you totally about the banking industry and the lobby. In fact Sniper posted a link to some statements by Bernanke about not being careful to not have the banks incur too many costs. It wasn't about the UIGE law specifically but to me it's clear that Bernanke, the guy who heads up the key organization in developing the new regulations, that he doesn't want to impose a great deal more overhead on the banks. However, I'm fairly certain (could be convinced otherwise) that the current DOJ would like to do exactly that. I'm fairly optimistic that the new regulations for the banks won't really change things all that much. From my understanding U.S. banks refuse transactions with "gambling" sites now. Obviously the new law seeks to put more responsibility on U.S. banks to make sure that money leaving the bank doesn't go to internet gambling.

[Sniper]

adios, I think we are basically in agreement over what is likely to occur, and on understanding that we really won't know until the Regs at least start being discussed.

That said, I want to comment on this section of your post...

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I would guess that Neteller is anticipating some sort of regulation that U.S. banks can't do any direct transactions with any entities that do direct transactions with entities that run "gambling" sites. Seems complicated doesn't it? In other words, I'm guessing that Neteller is anticipating the regulations to state that if an e-wallet has direct transactions with a "gambling" site, U.S. banks will not be able to do direct transactions with that e-wallet.

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It's my opinion, that the Regs won't have to prohibit transactions with e-wallets for us to see Neteller remove itself from I-Gaming transactions. At this time, I fully expect that Neteller will act as if it is a bank subject to the Regs... and if the Regs say no business with I-Gaming sites, then Neteller will pull out of those transactions.

[BluffTHIS!]

Sniper,

I have said before in my "Phone card in and Neteller out thread" which is in the sticky, that even if Neteller chooses becauseof the regs not to facilitate deposits to poker sites, nothing in the new legislation and thus the regs can prevent them from facilitating cashouts from what I have read re the interpretations of same.

So maybe they won't even want to see if this is an option. But if they do, then should could still continue to have a big part in the business. Most players might not like longer depositing times that will result if all e-wallets get out, but what they like least is long cashout times. Neteller could still fill that role. And I think it is certain that even if the Fed puts the max burden on banks in scanning all outgoing funds, they aren't going to and don't even have a basis to, do so with incoming transactions.

[StellarWind]

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It's my opinion, that the Regs won't have to prohibit transactions with e-wallets for us to see Neteller remove itself from I-Gaming transactions. At this time, I fully expect that Neteller will act as if it is a bank subject to the Regs... and if the Regs say no business with I-Gaming sites, then Neteller will pull out of those transactions.

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Exactly. Neteller is clearly stating their intention to comply with the upcoming banking regulations as if they were a U.S. financial institution.

You are not going to see UIGEA regs requiring banks to block deposits to e-wallets. People speculating about the banking lobby blocking such regs are overlooking the obvious--they already did it. They got their protections put into the law itself. The UIGEA only provides for blocking illegal gambling sites and their captive financial institutions. Regulations that cause legitimate transactions to be blocked are specifically disallowed. Any UIGEA regulation blocking transfers to independent financial institutions such as typical e-wallets violates the plain language of the law that created it and is unlikely to last long in court.

[Sniper]

Bluff,

First, the majority of people are moving money in and not moving money out [img]/images/graemlins/wink.gif[/img]

Second, the problem for successful players is that they use e-wallets to move money from one site to another... which would not be possible in your scenario.

Of course, there may be some players that simply make large deposits into the poker sites and then only have to worry about how to get profits out... but I think this is a minority.... and the value of reload bonuses will go down significantly.

[BluffTHIS!]

You are right that the e-wallets greatly facilitate moving money between sites and allowing a shared bankroll instead of having to keep enough on any individual site to be properly rolled for a given stakes.

The big question is whether ACH transactions end up getting filtered or not. If not, then our bank accounts will just have to function as an e-wallet formerly did. The only advantage neteller has now over an e-check is quick transaction time instead of waiting for a transaction to clear.

As I have said in the past, the sports books are the ones with the biggest incentives to come up with creative ways to keep moving the money around. All they need to do is find one honest private bank in a juridiction that won't extradite for this stuff (i.e. Costa Rica, Antigua, etc.), to make a new e-wallet site or provide services just for themselves.

[Hock_]

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and if the Regs say no business with I-Gaming sites

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You don't get it. The regs aren't going to say "no business with I-gaming sites." If that were the obligation then Congress would've put it in the statute and left it at that. That's why they need regs -- more detailed rules about exactly what financial institutions must do to screen and block transactions. The whole point is that it's extremely complicated and, according to the industry, maybe impossible. All Neteller is doing is saying that it will be a good little corporate citizen, so as not to piss off the government for no reason, and then it can decide what exactly it will do once the regs are promulgated.

If I had to bet, my wager would be that Neteller is not going to roll over and right now believes that the regs will not require it to exit the market.

Everyone who says that Neteller's statements are tantamount to saying that it's going to disappear are just plain wrong.

[Hock_]

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THEY HAVE SAID THEY WILL COMPLY WITH THE LAW.

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Nobody knows what THE LAW is going to be or what it's going to require.

So much misinformation . . .

[5thStreetHog]

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and if the Regs say no business with I-Gaming sites

[/ QUOTE ]If I had to bet, my wager would be that Neteller is not going to roll over and right now believes that the regs will not require it to exit the market.

[/ QUOTE ]If i had to bet,id bet they are going to roll over and that they believe the exact opposite,but i hope your right.

[BluffTHIS!]

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THEY HAVE SAID THEY WILL COMPLY WITH THE LAW.

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Nobody knows what THE LAW is going to be or what it's going to require.

So much misinformation . . .

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Hock,

Here's the thing to me although this is a non-lawyer's opinion. Either RIGHT NOW THIS VERY MINUTE the law makes Neteller facilitating transactions to the sites remaining in the US market illegal or it does not. It isn't the regs that define what is legal, but how the law can be enforced. So whether or not the regs are effective in carrying out the legal intent of the law or not doesn't matter as far as just the question of legality. Even if Neteller were to exit the US market later, they would still have broken the law right now. Just like a bank robber who stopped robbing banks and later says since he stopped he shouldn't be considered a robber right now. And ditto for the sites still in the US market who might withdraw later.

Neteller has a good reputation for honesty and security, and if they don't want to have their business gutted or undergo the risk of the DoJ having a contrary legal interpreation than them pre or post regs, then they should be seeking to change their coporate domicile to a friendlier place, and probably as well to take themselves private again. Otherwise some other concern will rise up to fill the void and take that business.