Brace yourselves: the Implications of the G-men's war on NETeller

It has been, to put it lightly, a rough week for online gambling. Beginning with the arrests of NETeller founders John Lefebvre and Stephen Lawrence on Martin Luther King Jr. Day, and continuing through the decisions by NETeller and Citadel Commerce Corp to cease processing transactions from U.S. based customers, the world of online poker has experienced yet another massive upheaval - and this time, there may not be a way out.

Lefebvre and Lawrence, as you're probably already aware, are Canadian citizens who were apprehended by Federal agents as they happened to be passing through separate airports on American soil on Monday. Neither man has had anything to do with the company they founded - the world's largest online money transfer company - since 2005.

Lefebvre and Lawrence are now facing federal criminal prosecution on chargers that they "conspired to transfer funds with the intent to promote illegal gambling." Both men have since been freed on $5 million bail, but their situation looks grim. If convicted, the men face up to 20 years in a federal prison.

The situation is just as bleak for the online gaming industry in the United States as a whole. In the short term, the decisions by NETeller and Citadel to vacate the American market mean gamblers wishing to play on real-money poker sites will have to jump through an increasing number of hoops in order to get their funds secured.

Making access to real-money poker sites more complicated has the unfortunate side affect of drying up the avenues by which dead money gets to the tables. The more hoops a casual or neophyte player has to jump through to get into a real-money game, the less incentive that player has for doing so.

Plainly put, the absence of an easy-pay solution like NETeller means less and less fish will be entering the food chain. This means fewer easy games and a lot less incentive for your average player to continue navigating the fund-transfer minefield just to play poker in an environment where the overall skill level has dramatically increased.

While it may not mean the end of online poker in the United States, it could quite easily mean the end of the gold rush we've been experiencing. The most talented players will still be able to make a living at the virtual felt, but anyone outside the upper echelons is bound to start feeling the pinch.

The long term implications of the NETeller fiasco are the really scary aspects of this situation. Apart from the fact that the easy games will naturally dry up and the weaker sites will be forced out by dwindling levels of enrollment, the arrests of Lefebvre and Lawrence by the U.S. government signal with brutal clarity the direction in which the country's lawmakers intend to take this issue.

From Bill Frist's underhanded decision to sneak in the Unlawful Internet Gambling Enforcement Act on the back of a crucial port security bill, to the latest decision by Federal authorities to ambush and detain the NETeller founders in a smash-mouth, headline-hungry move, the government has shown time and again that it is willing to use any means necessary, however sneaky and immoral, to rid the country of online gambling.

The "moral majority," faced with an industry that without exception has professed itself to be willing to compromise and open to rational discourse in regards to regulation and taxation, has instead ignored all avenues of talk and reason in favor of guerilla tactics that aim solely to cripple the industry and ruin a game which is enjoyed by millions of wholesome Americans.

Ironically, it's the gamblers who have so far taken the high road, while the self-righteous lawmakers have stooped to the basest of levels.

If the past week is any indication, the government will aggressively fight to close every loophole in their efforts to rid America of this evil. Any means by which players can presently get money into and out of online sites are likely not safe for very long, and members of the online gaming industry who value their freedom would probably be well-served to avoid setting foot on American soil entirely.

The rest of us can and should stand behind the industry by continuing to patronize those online poker houses who have remained loyal to their American customers, and by letting the government know that we won't let our game die quietly. Keep playing online for as long as you can, and start making some noise - write your Congressman and join the Poker Players Alliance.

While it may be too early to start making professions of the coming Apocalypse, the plight of Messrs. Lefebvre and Lawrence, as well as the actions undertaken by cowardly and dishonest men like Bill Frist, make it all too clear that if we want to keep playing poker online, we're going to have to fight for that right.

Lefebvre and Lawrence, as you're probably already aware, are Canadian citizens who were apprehended by Federal agents as they happened to be passing through separate airports on American soil on Monday. Neither man has had anything to do with the company they founded - the world's largest online money transfer company - since 2005.

Lefebvre and Lawrence are now facing federal criminal prosecution on chargers that they "conspired to transfer funds with the intent to promote illegal gambling." Both men have since been freed on $5 million bail, but their situation looks grim. If convicted, the men face up to 20 years in a federal prison.

The situation is just as bleak for the online gaming industry in the United States as a whole. In the short term, the decisions by NETeller and Citadel to vacate the American market mean gamblers wishing to play on real-money poker sites will have to jump through an increasing number of hoops in order to get their funds secured.

Making access to real-money poker sites more complicated has the unfortunate side affect of drying up the avenues by which dead money gets to the tables. The more hoops a casual or neophyte player has to jump through to get into a real-money game, the less incentive that player has for doing so.

Plainly put, the absence of an easy-pay solution like NETeller means less and less fish will be entering the food chain. This means fewer easy games and a lot less incentive for your average player to continue navigating the fund-transfer minefield just to play poker in an environment where the overall skill level has dramatically increased.

While it may not mean the end of online poker in the United States, it could quite easily mean the end of the gold rush we've been experiencing. The most talented players will still be able to make a living at the virtual felt, but anyone outside the upper echelons is bound to start feeling the pinch.

The long term implications of the NETeller fiasco are the really scary aspects of this situation. Apart from the fact that the easy games will naturally dry up and the weaker sites will be forced out by dwindling levels of enrollment, the arrests of Lefebvre and Lawrence by the U.S. government signal with brutal clarity the direction in which the country's lawmakers intend to take this issue.

From Bill Frist's underhanded decision to sneak in the Unlawful Internet Gambling Enforcement Act on the back of a crucial port security bill, to the latest decision by Federal authorities to ambush and detain the NETeller founders in a smash-mouth, headline-hungry move, the government has shown time and again that it is willing to use any means necessary, however sneaky and immoral, to rid the country of online gambling.

The "moral majority," faced with an industry that without exception has professed itself to be willing to compromise and open to rational discourse in regards to regulation and taxation, has instead ignored all avenues of talk and reason in favor of guerilla tactics that aim solely to cripple the industry and ruin a game which is enjoyed by millions of wholesome Americans.

Ironically, it's the gamblers who have so far taken the high road, while the self-righteous lawmakers have stooped to the basest of levels.

If the past week is any indication, the government will aggressively fight to close every loophole in their efforts to rid America of this evil. Any means by which players can presently get money into and out of online sites are likely not safe for very long, and members of the online gaming industry who value their freedom would probably be well-served to avoid setting foot on American soil entirely.

The rest of us can and should stand behind the industry by continuing to patronize those online poker houses who have remained loyal to their American customers, and by letting the government know that we won't let our game die quietly. Keep playing online for as long as you can, and start making some noise - write your Congressman and join the Poker Players Alliance.

While it may be too early to start making professions of the coming Apocalypse, the plight of Messrs. Lefebvre and Lawrence, as well as the actions undertaken by cowardly and dishonest men like Bill Frist, make it all too clear that if we want to keep playing poker online, we're going to have to fight for that right.

courtesy of Owen Laukkanen

News Added: 21 January, 2007

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