Sunday, January 28, 2007

NETeller Saga Continues

U.S. players seeking to extricate themselves and their poker bankrolls from NETeller in response to NETeller's expanding withdrawal from the U.S. market continue to encounter difficulties. The latest development, following the removal of InstaCheck, Electronic File Transfer [EFT] and paper checks, was the removal of fund transfers to NETeller debit cards, for whatever small percentage of NETeller's U.S. customers had that capability.

NETeller continues to take excessive heat from U.S. players seeking to remove their funds, despite the fact that in each case it seems to be the U.S. government's behind-the-scenes maneuvering that has caused the freezing to occur.

Bill Rini, always up on the technical developments, uncovered one of the memos distributed by the U.S. to its authorized Automated Clearing House [ACH] facilitators. The EFTs mentioned above go through this ACH system, and the U.S. effectively shut off this system on or about Jan. 16, hand in hand with the arrests of the two NETeller founders. In retrospect, this was clearly a one-two punch designed to cripple online gaming in advance of the upcoming Super Bowl, with sports betters and betting being the primary targets of this push.

Anyhow, the paper-check processors normally used by NETeller --- and in many cases, part of businesses operated by the arrested founders --- became useless at the same time, and for the same reasons. These check processors were set up to go through financial institutions with established U.S. presences, such as Barclays Bank and the Bank of Scotland, and hence were shut off in the same way.

The more recent debit-card situation also is U.S.-related. While NETeller seemingly maintains debit-card agreements with several banking institutions that offer cards, some of those are also within the States, and hence fell under some of the same problems as other channels. Additionally, the crush of new requests for these cards by U.S. players was itself a phenomenal stress of the system, and its quick use as an alternate channel was a sure red flag for interested onlookers, precipitating its disabling as a withdrawal method. Furthermore, NETeller has indicated its intent to comply with U.S. wishes in hopes of restoring a more direct ACH path to the States for funds currently in limbo, and stopping the flow of monies to U.S.-held debit cards may also be something of a goodwill gesture by NETeller, towards the U.S.

At present, the only thing U.S. customers can do are spend their funds with a handful of NETeller merchants not connected to gaming (and yes, there are hundreds, but no central list of non-gaming merchants seems to exist), or to find a friend outside the U.S. and do a peer-to-peer transfer to that friend, with an attendant NETeller fee attached. However, customers making excessive use of that second method are likely to see their transactions trip system flags, resulting in potential declined transactions and a temporary freezing of an account. So it's an iffy strategy, for those so inclined.

That said, NETeller cannot hold onto U.S. customers' funds indefinitely; the company must find and implement an alternate channel. Since NETeller's customer deposits remain held in escrow within other banking institutions, the chances that U.S. customers would never see their frozen monies remains extremely small. Instead, it's likely to take several weeks, until a new system comes into place that (a) involves direct oversight by the U.S. government, or (b) involves a massive issuing of paper checks and money orders by a banking institution outside the U.S./U.K. sphere of influence.

One word to the wise: Don't expect anything to change from the current situation until after the Super Bowl. I think you can figure out why.

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