US Developments

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The position in the US continues to show some signs for optimism, but moves very slowly with no imminent change anticipated.

The criminal cases in relation to Neteller are reaching resolution after Neteller founders Stephen Lawrence and John Lefebvre pleaded guilty to charges relating to the illegal transfer of money to online gambling firms by Neteller.

Neteller itself has reached a Court sanctioned resolution in which it has agreed to forfeit US$136 million, return US$94 million of US customer funds currently held and admit to violating US laws on Internet gambling.

Mr Lawrence and Mr Lefebvre will not be sentenced until October. But have both agreed to forfeit part of the US$100 million the US government is seeking in restitution. Neteller has agreed to "cooperate fully with US authorities in all matters relating to the ongoing investigations" by the United States Attorney's Office and, in return, will avoid facing any further criminal charges of conspiracy.

It was also announced that 888 Holdings and PartyGaming have started talks with US officials, including with the Department of Justice (DoJ) and have been responding to information requests. The companies' objective in these talks is assumed to be to reach a deal which would wipe the slate clean in respect of gambling in the US before these companies exited the US market in 2006.

A resolution of the position in respect of potential past wrongdoings should leave these companies free to take advantage of any future change in US legislation which allows online gambling.

At the same time, US Congress has at least heard lobbying on behalf of the legalisation of online gambling: representatives of The Safe and Secure Internet Gambling Initiative (SSIGI) have testified before the House of Representatives Committee on Financial Services. The SSIGI promotes the principles of safe and secure Internet gambling through practices designed to protect consumers and ensure integrity of financial transactions.

The SSIGI is now endorsed by, amongst others, the Remote Gambling Association, lending the SSIGI the weight of some of the largest online gambling companies.