Thursday 29th March 2007
House of Cards The online payment processing industry took it in the chops again this week, as the Electronic Clearinghouse, Inc (ECHO) settled with the US government over allegations that it profited from online gaming transactions by supplying Neteller with payment processing services prior to the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) last October.
Of course, since the UIGEA won’t take effect until June 2007, that would appear to be self-evident.
Nevertheless, the action is something of a letdown for the DOJ. ECHO noted that the only reason it settled was to benefit its own shareholders by sparing them the costs of expensive litigation. It established that the DOJ does indeed have the political leverage to extort money out of legitimate enterprises – a fact that most Reg readers are already well aware of.
The $2.3m settlement represents all the profits the company supposedly made off Neteller transactions prior to the date the UIGEA was signed into law. The company caught flak from the DOJ for not “winding down” its operations quickly enough after the legislation was passed – though, of course, the UIGEA still has not even gone into effect.
The main effect of the DOJ’s actions was to scuttle a planned merger between ECHO and financial software powerhouse Intuit, which clearly did not want to buy into a potential lawsuit.
Online gamblers, however, are not dismayed, as American retail monster Walmart is providing a safe and secure alternative to shady payment processing options.
Moneygram is widely available at your local Walmart, and is currently accepted by Pokerstars.com, though it does require a very unWalmart-like hefty processing fee of $9.95 per transaction.
Nevertheless, for those who want to play, Walmart is clearly the convenient place to go. Thanks, Sam. ®