NETeller to Follow Jurisdiction of UIGE Act

NETeller has decided to take a more cautionary approach in dealing with the United States’ recent attempt at stemming online gambling.

In a statement released today, NETeller said it will honor transactions until the Department of the Treasury figures out how to enforce the Unlawful Internet Gambling Enforcement (UIGE) Act. It has until July 10, 2007, to figure out how it will work with banks to stop transactions from financial institutions that work with Americans from transferring money to gambling sites.

Last week, NETeller’s executive vice president Bruce Elliot told a gaming conference in Spain that the company would continue working with Americans.

“I don’t think we have a very big problem,” he said.

But today, NETeller released a statement letting everyone know that it will comply with the UIGE Act when it goes into effect. The statement reads in part:

“NETeller, a company registered outside the US, will comply with the Act and its related regulations as if it were subject to the Act's jurisdiction. This action is intended to ensure that the Company is able to continue to operate with the support of its principal commercial partners and to protect its shareholders, business partners, employees and reputation.

“Various provisions of the Act, including the obligations of financial transaction providers such as NETeller, remain unclear. The uncertainty should be largely resolved when the Secretary of the Treasury and the Board of Governors of the Federal Reserve System issue the regulations they are required to prescribe within 270 days.”

President George W. Bush signed the UIGE Act into law Friday, Oct. 13, when he put his pen to an act designed to boost security at the nation’s ports. The UIGE Act was attached to the act for port safety with the help of Senate Majority Leader Bill Frist in the last session before the Senate broke for a long election-year recess.

NETeller is a publicly traded company and the Monday after the Senate passed the Port Safety Act, its shares fell from 355 pence to 140 pence. It’s currently trading at 144 pence.

FirePay, NETeller’s rival in the world of third-party banking companies, made it clear to US customers that it planned to stop doing business with them immediately after the President signed the Act into law. FirePay made this announcement soon after the Senate passed the UIGE Act.

Although the Treasury Department has 270 days, that doesn’t mean it has to use all that time. Regulations can and probably will be in place before the deadline.

NETeller claims it moved around $7.3 billion in 2005. The company was founded in 1999 and is located in the Isle of Man with offices in Calgary, London, Hong Kong, and San Jose, Costa Rica.

News Added: 20 October, 2006

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