Filed in archive Poker Products by David Aydt on March 29, 2007

I could almost feel that check from Neteller hitting my wallet after the announcement last week concerning a possible resolution with the United States Department of Justice. Well, not really but it was a bright turn in an otherwise gloomy outlook upon the former giant online gambling payment processor. Poker money had liquidity, and the various online poker rooms flourished upon it.

Since then the growth has been stagnant, but the rooms have managed to hold their own and their customers for the time being with a multitude of much slower, more costly processors.

Now Canadian and Turkish players will feel the same burn as US player, when their Neteller accounts will no longer be welcomed at online gaming sites.

From Maudie at Pokerworks, here's the offical press release:

Monday, 26 March 2007 - The NETELLER Plc Group ("NETELLER" or the "Group") (LSE: NLR), the leading global independent online money transfer business, today announced several significant changes to its services in a number of markets.

The Group continually assesses the risk profile and status of the markets its serves. Recent actions by regulators, payment processors, and online gaming operators have increased the uncertainty around certain activities related to online gambling in some jurisdictions. The Board of Directors of the Company reached a decision, on 25 March 2007, that the risk to the Group's ongoing business in Canada and turkey has increased in the light of such developments. The Board has therefore concluded that the Group will no longer process transfers related to online gambling sites on behalf of Canada or Turkey resident customers.

Reduced Service to Canada

* Cessation of Canadian transfers to gambling merchants: the Group will cease processing online gambling related transactions for Canada-resident customers with effect from 12.01 AM MST Monday 9 April 2007.

* Suspension of InstaCASH transactions: As of today Monday 26 March 2007, at 12:01 AM MST, Canada-resident customers were no longer able to deposit funds using NETELLER's instaCASH service either directly or from any online gambling site.

* Non-gambling services continue: Canada-resident customers will continue to be able to use their e-wallet accounts for non-gambling transactions, including peer-to-peer and pre-paid debit transactions.

* Available customer funds: Customer funds, including those of Canadian residents, are held in a pooled, segregated trust account and will be available for withdrawal by customers, on demand. Canadian customers continue to be able to use their e-wallet accounts for non-gambling transactions.

Reduced Service to Turkey

In light of recent legislation passed in Turkey on 28 February 2007, which prohibits certain forms of online gambling to be offered by any "unauthorised" domestic or foreign company to citizens in Turkey, NETELLER has decided to implement a voluntary phased withdrawal of the payment services related to online gambling that it offers customers to the Turkish market.

* Withdrawal of local bank funding options: Local bank deposit options for Turkey-resident customers were withdrawn on Friday 9 March 2007.

* Cessation of Turkish transfers to and from online gambling merchants: The Group has ceased processing online gambling related transactions for Turkey-resident customers with effect from 6.01 AM GMT Monday 26 March 2007.

* Non-gambling related services continue: Turkey-resident customers will be able to continue to use their NETELLER e-wallet account for any non-gambling related money transfers and withdrawals. Customers located in other parts of the world are not affected by this change, and NETELLER continues to service these customers in the normal manner.

Group Business Impact

The Canadian business of the NETELLER Group would likely have contributed significantly to the Group's revenue and profitability during 2007 and the loss of this business is now likely to have a material negative impact on the Group's results for the full year ending 31 December 2007. The Turkish business of the Group does not represent a material proportion of the Group's overall customer base, revenue or profitability.

The Group does not anticipate making further significant reductions in staff as a result of these service changes as the Board believes that its Calgary-based operations are appropriately sized to handle the remaining non-North American business of the Group. The Group will continue to focus on the growth markets of Europe and Asia.