Inside Asian Gaming

45 Gambling Portals in Terrorism Probe Three men found guilty in Great Britain last month of using the Internet to incite terrorism were alleged to have laundered money through at least 12 online gambling portals to fund their activities. A report in the Washington Post cited by Gaming Intelligence Group stated that investigators in the United States and Great Brit- ain had tracked financial transactions of the three men across thou- sands of merchants in more than a dozen countries and discovered thousands of dollars allegedly laundered through sites including Ab- solutePoker, Betfair, BetonBet, Canbet, Eurobet, NoblePoker and Para- disePoker using accounts set up with stolen credit card numbers and victims’ identities. The report alleged the group conducted 350 transactions at 43 different online gambling sites, using more than 130 compromised credit card accounts. Winnings were withdrawn and transferred to online bank accounts the men controlled. Spain’s Online Policy Challenged The European Commission was preparing a legal challenge last month to Spain’s policy of taxing winnings paid by foreign lotteries while exempting Spanish lotteries. The progressive-rate income tax is discriminatory, the Commis- sion claims, and violates trade protections guaranteed EU Member States. Spain has responded that it exempts its own lottery organiza- tions because they are charitable, not because they are Spanish. The country’s Ministry of Finance, meanwhile, has launched an investigation into Spain’s burgeoning Internet gambling industry for possible tax liabilities.Law enforcement officials are studyingwhether to prosecute Web opera- tors for violating a statute that forbids gambling ac- tivities run by unlicensed foreign entities. Issues surround- ing the growth of Inter- net gambling also have made their way to the national legislature. The Senate, the upper house of the Cortes Generales, recently passing a bill presented by the governing PSOE to legitimize and regulate online gambling. PSOE (Spanish Socialist Workers Party) garnered the support of smaller parties such as Entesa Catalana del Progrés, a coalition of mostly Catalonian Leftist parties, and the Catalonian-based CiU co- alition on language in the bill essentially calling on government to take formal control of an industry in which Spaniards are spending an estimated €500 million a year. The main opposition party, the pro-business Partido Popular, vot- ed against the measure. The PP has labeled all foreign online opera- tors illegal. AUC, the country’s communications watchdog, has in the mean- time filed a formal request with the Ministry of Economy andTaxes for an investigation into online operator Bwin’s sponsorship of football powerhouse Real Madrid and sponsorships of the Seville and Figue- res clubs by 888 and Miapuesta. A report by Gaming Intelligence Group said the AUC (Asociación de Usuarios de la Comunicación) believes current Spanish legislation renders online gambling services illegal in Spain, and so the promo- tion of such services is also illegal. The PP also has called for govern- ment action. Neteller to Pay Gambling Penalty Neteller, the online payment processor, admitted on Wednesday that it broke US laws and agreed to pay a US$136m penalty to settle its part of the US crackdown on internet gambling. The Isle of Man-based company said it hopes to relist shortly on London’s Aim. Its shares were sus- pended in January after its cofounders,StevenLawrence and John Lefebvre were ar- rested. Both men pleaded guilty to criminal conspiracy earlier this month. The company and the US attorney’s office in New York announced last month that they had signed a “deferred prosecution agreement”. The company acknowl- edged conspiring to operate an unlicensedmoney transmitting business and agreed to co-operate with the US probe. Prosecutors agreed to drop the charges in 2009 if the company complied with all the terms of the agreement. The gambling industry had been waiting to see whether the non-US portion of Neteller would survive and the agreement fu- els hopes that the sector could start to draw a line under a dif- ficult period. Two listed gambling firms, PartyGaming and 888, have also held talks with the Department of Justice. Under Aim rules, the window to resume trading expired on Mon- day, six months after the shares’ suspension. However, the company said it was in discussions with the junior market’s authorities and hoped to return to trading after finalising its accounts. According to US officials, Neteller processed more than US$10bn in gambling payments for US customers between 1999 and 2007 and derived about 75% of its profits from those transactions. As part of the settlement, Neteller will provide details of transac- tions between its customers and online gambling companies. It has also agreed to return US$94m of funds belonging to US cus- tomers and intends to repay them over the summer.The US$136m to be paid to the US includes a sum of US$60m already seized. “We anticipate within the next few weeks that we will have fully implemented the plan for the return of funds to our US customers and are hopeful that, by that time, we will have restored the compa- ny’s shares to trading on Aim,” said Ron Martin, chief executive. “We can now begin to refocus our efforts on building and strengthening the Neteller business in the growing markets of the European and Asia Pacific regions.”