Neteller announces it will pull the plug

by Lou on October 19, 2006

Neteller today announced that they are pulling the plug when it comes to funding online gaming accounts for US citizens. You can read the entire announcement at: http://investors.neteller.com/neteller/upload/Pressreleaseupdate19oct06Final.pdf.

In their announcement, Neteller says that they will comply with the act, just as if they were within its jurisdiction. They also indicated that they intend to monitor the regulatory development process and determine what action to take during the 270-day rulemaking period.

For the time being, “US-resident customers are able to use the NETELLER service as normal. The funds of US-resident customers are held in trust accounts and will be available for withdrawal, on demand. The ability to withdraw funds will exist regardless of the customer’s location or ability to transfer to any site.”

Neteller is a publicly traded company, and this action will ensure that they can continue to operate with the support of their bankers and commercial partners, while protecting shareholders, employees, and their reputation.

While I understand the reason for the action they have taken, I’m sorry to see them take it. Neteller has no physical presence in the United States, no assets located here that I’m aware of, and is located on the Isle of Man, far beyond the jurisdictional reach of US law.

We’ll see what transpires as the rulemaking process moves along, but Neteller does provide a valuable service to anyone who has ever funded an online gaming account. On the other hand, they are a financial intermediary, not the game itself.

If they do pull out of the market, I’m sure there’s enough business out there to motivate a privately held financial intermediary to offer the same services.

Having said all that, I’m still disappointed to see them go for two reasons. One, they do a good job and I’ve had good experiences with their services over the years. Second, and perhaps more important, it just angers me to see this silly law have the reach and effect it does.

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