After pulling out of the US online gambling market, on March 26th Neteller announced that it would also be withdrawing most of its’ services for their Turkish and Canadian customers. Recent regulations and uncertainty surrounding online gambling were cited among the reasons for this development and Turkey has just passed laws forbidding unauthorised companies from offering online gambling services to its’ citizens. Less sure are the reasons for leaving the Canadian market especially as it was Neteller’s largest customer base after the US. Adding to the uncertainty for the future of the company, it was announced on April 3rd that executive director and president of the group’s Asian and Pacific operations had retired from his position.

The implications for Turkish and Canadian customers are similar with members of both nationalities unable to transfer funds to and from online gambling merchants but non-gambling services remain open for customers from both countries, although InstaCash transactions have been suspended for Canadians. In contrast to the US situation both sets of customers can still withdraw their money from their Neteller accounts as no funds have been seized by either government.

The reason for the decision over Turkish customers is because of a law passed on 28th February which bans unauthorised companies, domestic or foreign, from providing online gambling services within the country. The ruling which is part of the legislation titled ‘Law for amending certain articles of the law on bookmaking organisation concerning football contests’ will protect its’ state-owned gaming company Iddaa and can lead to up to three years imprisonment if broken. The law clarifies the official position after a recent controversial censorship bill that included online gambling was introduced. The bill has powers to censor or block any site seen as ‘denigrating Turkishness, the republic, the institutions and organs of the state’ and will be monitored by the Turkish Information Technology Security Agency.

Conversely, the thinking behind the decision about Neteller’s Canadian customers is somewhat unclear. Before leaving the US market, it was estimated that US members made up 65% and Canadians 30% of their customers, so it would seem unwise to lose such a high proportion of income without good reason. There has been no change on the Canadian statute books and no publicised proposed moves to do so. Despite this, internet gambling is effectively banned in Canada as all gambling has been illegal since 1892. Since then, the ban has been gradually lifted throughout the country, beginning with charitable lotteries and more recently allowing casinos in all but four provinces. Nevertheless, internet gambling has never been mentioned in any of the gambling amendments and has not actually been legalised although, as it stands, the Canadian government has not pursued any prosecution as there are no online gambling companies within their shores barring one. This is run by the Kahnawake tribe in Quebec, who are in effect a sovereign nation, although the provincial government of Alberta in South West Canada are considering bringing a case against the Alexander First Nation, who intend to follow the example of the Kahnawake tribe in starting an e-gambling operation. Still, these internal disputes should have no bearing on Neteller’s legality as they do not operate gambling facilities and are involved only in money transfers.

While Neteller’s position relating to their Turkish customers is understandable given the law change and their recent problems in the US, their withdrawal of services to Canadians appears baffling. Furthermore, the recent retirement of company executive director Dale Johnson who was in charge of an obvious area of expansion in the Asian and Pacific region, sends out a worrying message. Additionally, the fact that Neteller has lost an estimated 95% of their customers within six months may mean that further job cuts are inevitable. Rumours are rife on internet forums that the company is about to go bust and although this is pure speculation, Neteller’s reputation has been further damaged through these recent events.

© Directory of Online Poker. April 2007

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