US deals foreign banks gaming blow

Subpoenas cause a stir

According to public filings cited by the United States Attorney's office in a statement following the arrest, in the first half of 2006, NETeller derived approximately 95 per cent of its revenue from online gambling sites, 85 per cent of which came from North America and 75 per cent from the United States. NETeller pulled in over $5bn in revenue in the first half of 2006. The government also cited information in the filings that NETeller knew its transactions could be "illegal under current or future US law", (emphasis mine) in an attempt to satisfy the "intent" element of American money laundering charges.

The UIGEA board terror

NETeller proved to be a major thorn in the side of American authorities obsessed with staunching the flow of American dollars to overseas online gambling sites, and was frequently cited by critics of the UIGEA as an easy workaround in the wake of the passage of the UIGEA. No more. Unfortunately, as always, darker elements will move in to fill the gap, those that can pull up stakes at a moment's notice.

Although the legality of certain forms of online gaming was hotly debated in American legal circles, even in the aftermath of the UIGEA - only wire transactions involving sporting events have been explicitly prohibited since 1961 - the DOJ has seen fit to prosecute those who had previously operated in a kind of legal limbo. Anyone with any doubts about their involvement in this controversial business would be wise to stay away from the United States and its possessions for a long time to come.

Offering a flicker of hope to the online poker community, whose television popularity belies the illegality of its online presence, the gaming trade publication Gambling911.com reported last week that the National Council of Legislators from Gaming State, at a conference in the Florida Keys, responded favourably to comments by the head of the Poker Player's Alliance, Michael Bolcerek, regarding the benefits of legalised online poker.

What influence state legislators will have over federal policy is unclear, and he might well have been preaching to the converted, but legalisation of truly intrastate (rather than interstate, which would fall under federal law) online gaming could at least provide evidence that the online gambling industry can be tamed and controlled, not to mention taxed.

According to Igamingnews.com, Juniper research released a revised report last week estimating that the mobile gaming market will expand from $1.35bn per annum this year to $16.6bn in 2011. The downwardly revised forecast accounts for the American Justice Department's ongoing legal crusade against the online gaming industry, in which any transactions that touch the American market are fair game for prosecution. Caveat emptor.

Also on the cards...

The profile of the World Series of Video Games continues to rise, as College Sports TV, a subsidiary of CBS, announced at CES in Las Vegas plans to offer complete coverage of the 2006 event, which wrapped up in New York City in December. Sponsored by Intel, and promoted by CEVO, the event hopes to mimic the popularity that online poker tournaments have achieved with the coveted young male demographic in the United States.

Whether or not professional video gamers in America will achieve the rock star status enjoyed by their peers in South Korea, where professional video game players can earn upwards of $200,000 and participate in supervised training regimens, remains to be seen.

The World Series of Video Games is not the only group pushing this concept, however.

The Championship Gaming Series announced at CES that it plans to start a professional video game league in the United States, complete with team general managers, qualifiers, and a player draft. A draft? That's right, with any luck the Michael Jordan of video games could land on your local squad. Apparently, DirecTV and Sky Broadcasting have picked this one up, not to be outdone by stodgy CBS.

The competition is broken into five regions, North America, the UK, Europe/Scandinavia, South America, and Australia/Asia/Middle East. Why Asia, with the only current professional squads, gets lumped in with Australia and the Middle East, is not explained, though we suspect it doesn't want too much competition for the Americans in that lucrative American TV market. Contests include both console and PC games.

The Shinnecock Indians of New York State could well be out of luck if 17th Century land deeds hold up in court. New York Newsday reported that University of Toronto Professor Alex von Gernet testified that they forfeited "aboriginal title" to land reacquired in 1922 by inscribing Xs on documents in place of signatures, though they did not necessarily speak or read English. The professor testified that they nonetheless knowingly relinquished title.

The Gutshot Private Members Club of Clerkenwell, London, took one in the gut last week, as founder Derek Kelly was found guilty of organising poker games without a licence. Apparently, the court shot down the argument, currently being bandied about in American poker clubs and online chat rooms, that poker should be classed as a game of skill rather than luck. Kelly plans to appeal. ®