Since the introduction of the Internet Gambling Prohibition and Enforcement Act (IPGEA), signed by George Bush in October 2006, the future for online gambling in the US has been in doubt. Following the high profile arrests of Neteller founders John Lefebvre and Stephen Lawrence on January 15th, the US government’s hand against online gambling was further strengthened. Following this, Neteller, the world’s largest money transfer business for the online gambling community, was effectively forced out of the US market with funds of around $55 million of its US customers’ money seized by the United States Attorney’s Office (USAO). This money remains frozen and US customers have been unable to access their funds. However, Neteller has recently announced that agreements have been signed with the USAO outlining the redistribution of their US customers’ money. Separately and perhaps more importantly for the long term future of gambling online in the US, a challenger has emerged to the IGPEA, in the shape of US congressman Barney Frank.

‘I am working on legislation to cut back on this Internet gambling thing,’ Barney Frank, chairman of the House financial services committee, is quoted as saying in the Financial Times, and confirmation that he is working on a repeal to the IGPEA was given by his press department. Frank has previously described the IGPEA as ‘preposterous’ and one of the ‘stupidest laws’ ever passed. Regarding points made that online gambling contributes nothing to the US economy, Frank suggests that the Bill advocates a ‘socio-cultural authoritarianism,’ and went on to say ‘prohibition didn’t work for alcohol’ and ‘it doesn’t work for gambling.’ It is rumoured that John Conyers, chairman of the House judiciary committee, will support Frank’s attempts to repeal the Act. The rules defining the Act’s implementation are currently being drafted by the US treasury and are expected to be presented in April or May though due to the Democrat’s mid-term victory, there may not be enough votes to pass the Bill through Congress. Many commentators expect at least a softening of the regulations.

This could be good news for Stephen Lawrence and John Lefebvre, the former directors of Neteller arrested on January 15th, and some media outlets are already suggesting that charges against them could be dropped. They were detained while travelling separately through the US despite both having resigned their non-executive director positions before the IGPEA came into effect. Also, neither are US citizens and Neteller is based in the Isle of Man. The press release from the USAO said that the pair were arrested ‘in connection with the creation and operation of an Internet payment services company that facilitated the transfer of billions of dollars of illegal gambling proceeds from United States citizens to the owners of various Internet gambling companies located overseas.’ Though both own around six percent of Neteller’s shares each, it is difficult to see how the Lefebvre and Lawrence can be considered as operating an Internet payment services company when neither man has a recognised position within the group. Their initial hearing date of February 14th has been put back twice and is now scheduled for April 16th.

Soon after the arrests, Neteller suspended all US transactions including withdrawals, peer-to-peer fund transfers and the use of InstaCash. Yet despite the fact that Lefebvre and Lawrence’s hearings are yet to start and that the USAO still holds $55 million allegedly relating to their case, on March 21st Neteller made a statement regarding the return of their US customers’ money. The company states that it has signed agreements with the USAO and Navigant Consulting and that a plan to redistribute US funds will be announced within 75 days. Navigant are an independent consulting firm, employed through Neteller’s negotiations with the USAO, that will oversee the process of returning funds to US customers and also report on the Neteller’s current financial status. Neteller attributes the amount of time they require to come up with a plan to the sheer volume of transactions involved but in their press release Ron Martin, group president and CEO, states that ‘progress, while not always visible to the outside observer, has been steady and these agreements mark a milestone in the process.’

There are still concerns around the return of the US funds from Neteller and the confused implementation of the IGPEA as the Lawrence and Lefebvre cases highlight. The Neteller Customer Coalition has been formed to put pressure on the company to return their money and remains unconvinced by Neteller’s statements whilst conspiracy theories abound that the US money was seized as part of a US Internal Revenue Service investigation. Yet it is how the IGPEA itself fares in Congress that will have the largest effect on the future for US online gamblers though a quick resolution is by no means a certainty. However, the next couple of months will prove very interesting for US gamers and the online poker industry as a whole as what was once a bleak outlook now has a glimmer of hope regarding the return of US players to the online poker community.


© Directory of Online Poker. March 2007

	Click here to choose the best poker bonus for you!