British online payment processor NETeller said it would shed 250 jobs, mostly in Calgary, Canada, following its withdrawal from the U.S. market.
“Staff reductions will total around 220 employees across all levels, from the group’s contact center and security teams as well as related support functions in marketing, processing and IT,” NETeller said on Friday of its Calgary-based operations.
The company is cutting 30 jobs in Britain.
NETeller quit the United States last month after U.S. authorities arrested its two founders and charged them with handling billions of dollars in illegal gambling proceeds.
“The events of the past months have led to challenging times for the group, and the board has taken these measures to ensure the group has a sustainable business going forward,” said President and Chief Executive Ron Martin.
Internet gambling in the United States was effectively banned last October when President Bush signed legislation outlawing online gaming transactions.
Last week prosecutors seized some company funds, stopping U.S. customers from accessing their money, the latest move in the online gaming crackdown.
A spokesman for the firm said customers were still unable to access funds worth up to $55 million, and he could not say when the cash would be returned.
NETeller is cooperating with an investigation by the Attorney’s Office for the Southern District of New York. Founders Stephen Lawrence and John Lefebvre no longer work for the firm but still have significant shareholdings.
“Its (the company’s) hands are tied by the Department of Justice … This is a probe into the two founders of the business, so it is not in any way affecting NETeller Plc,” the spokesman said.
“But clearly at the same time, the DOJ has taken a very firm stance by saying you can not gamble online if you are a U.S. citizen. It is illegal, and you guys (the accused) have built a platform for many people in the U.S. to do that,” he said, explaining the background to the seizure.
NETeller said rationalisation would also include a review of the group’s property requirements and may involve the sale or partial lease of some of its Calgary-based facilities.
It reiterated that total cash costs associated with staff restructuring were expected to be around $1.1 million in 2006 and a further $3.7 million in 2007.
NETeller said its shares would continue to be suspended from trading on AIM in view of the continuing uncertainty. It requested its shares be suspended in January, just after the arrests.
Source: Canada.com

Gambling software producer CryptoLogic Inc. said yesterday its fourth-quarter profit dropped 70.6 per cent to $1.7 million (U.S.) in its first financial performance report since the U.S. government declared a ban on online gambling.
For the ended Dec. 31, the company’s earnings were equivalent to 12 cents per diluted share, down from $5.8 million, or 43 cents per share, in the same period last year.
Source: Toronto Star

Nobody does a party like this gambling town, a big reason why the NBA picked it for an All-Star celebration that threatens to add a new definition to the word excess. There are so many A-list happenings on the glittering Las Vegas Strip that Sunday’s game seems almost an afterthought.
It’s the first time the NBA has held the annual exhibition in a city that doesn’t have a team. Already there’s talk about a return All-Star appearance in a few years.
What Las Vegas really wants, though, is something more permanent _ a team of its own. So far, the glitzy city has struck out trying to land one from the four major sports.
Las Vegas may have the biggest hotels in the world, including a $7 billion resort complex under construction that other cities could never match. But it still looks with envy at more sedate places like Indianapolis that have teams _ and titles.
“I think Las Vegas is the next great world city, and a component part of that has to be a major league team, be it NBA, NHL, baseball or football,” said Mayor Oscar Goodman. “That’s what makes great American cities.”
A big part of the problem for Las Vegas is that other American cities weren’t built on gambling. Other American cities don’t have neighborhood casinos that make it as easy to bet on a game as it is to go to the supermarket for a gallon of milk.
Leagues already wary of betting scandals are even more wary of committing a team to play in a place where betting is not only tolerated, but encouraged.
“It’s not about a moral crusade about gambling,” NBA commissioner David Stern said when announcing the All-Star game would be in Las Vegas. “It’s just about betting on basketball games.”
To land the All-Star game, casino sports books agreed not to accept bets on it, a concession easily made since it’s an exhibition that hardly anyone bets on anyway. The casinos, though, made it clear they won’t do the same for an entire season.
Goodman has made it his mission in recent years to lure some sort of team to town, even going so far as to show up at baseball’s winter meetings a few years ago with two showgirls and an Elvis impersonator in tow.
He’s been rebuffed for both moral and financial reasons, but the fast-growing city now has a relatively affluent population of 2 million and might eventually prove so attractive that it can’t be ignored.
Stern hasn’t budged from his insistence that there be no betting on the NBA as a condition for any team to locate in Las Vegas. But he had no problem bringing the All-Star game to town and seems to have softened his stance recently by saying it would be a decision made by the owners.
Stern met with Goodman on Wednesday and signaled he may be ready to move further, asking the mayor to come up with a proposal to deal with the betting issue. Stern said he hoped to have the proposal in hand when the NBA’s Board of Governors meets in April.
At least one of those owners believes the NBA will be in Las Vegas in a few years.
“I think within five years,” said Gavin Maloof, whose family owns both the Sacramento Kings and the Palms hotel-casino in Las Vegas. “Certainly within the decade, absolutely. The city has too much going for it. It’s very large, there’s a lot of money here, there’s a huge local population, and they love basketball.”
The NBA isn’t the only league hesitant to commit. Baseball flirted with moving the Montreal Expos to the city, but the betting issue and a better offer prompted the league to choose Washington, D.C., instead.
The NFL, meanwhile, is so unfriendly to the city that it won’t even allow Las Vegas to be mentioned during the Super Bowl telecast, much less advertise on it. That policy apparently won’t change under new commissioner Roger Goodell.
“I think it’s a real issue,” Goodell said earlier this month at the Super Bowl. “I have my personal views about gambling, and I don’t think it’s in the best interests of the NFL to have any association with sports betting.”
The city’s best hope for the immediate future might be the NHL, which is struggling with both attendance and television ratings and doesn’t appear nearly as dogmatic about betting.
“Certainly there has been interest expressed since the lockout ended by people wanting to own a franchise in Las Vegas,” deputy commissioner Bill Daly said. “At the appropriate time I think we have to look at that interest.”
Daly said he believes an accommodation could be made on the betting issue. More important, he said, would be the willingness to build a new arena since the 19,000-seat UNLV campus arena where the NBA All-Star game will be played wouldn’t satisfy a basketball or hockey team.
“It’s an intriguing market for a host of reasons. The demographics are strong, there’s wealth in the market and interest in the market,” Daly said. “But it’s essential there be a state-of-the-art arena before we have a franchise there.”
That could be more difficult than getting casinos to stop taking sports bets. Local leaders formed a committee to study building a new arena, but there is little appetite for tax money to pay for one.
Casinos, for the most part, see a team as competition for the entertainment dollar, not a lure for tourists.
“There isn’t a movie company in Los Angeles that would expect the government to pay another movie company to come to town. And we shouldn’t be doing that for a sports team,” said Alan Feldman, vice president of public affairs for the powerful MGM Mirage casino operator. “In this state and community we pay for everything. We get no breaks.”
Pro teams and big-time athletes are no strangers to Las Vegas. The U.S. Olympic team made up of NBA stars trains in the city and will host an Olympic qualifier this summer, while Michael Jordan, Charles Barkley and Tiger Woods are regulars in the casinos.
Kareem Abdul-Jabbar broke Wilt Chamberlain’s career scoring record in the city in 1984, when the Utah Jazz played 11 games at the UNLV arena, and the Oakland A’s played their first six home games of the 1996 regular season in Las Vegas.
Maloof said he isn’t planning to move his family’s team to Las Vegas, despite arena problems in Sacramento.
Still, he said, he believes the city needs a team to be complete.
“There needs to be one of the four major sports,” Maloof said. “All I can say is that Vegas has everything, yet it has nothing when it doesn’t have sports. There really is a need for it.”
Source: Times and Democrat

Liberty Media’s deal to acquire Major League Baseball’s Atlanta Braves could hit a hitch because the Douglas County-based company owns one of the Internet’s premier sports-betting information website.
Liberty’s ownership of DonBest .com – which provides gamblers with betting lines, “expert” picks and other information to help them win money on sporting events – presents a conflict of interest, said sports-business expert Dave Smrek. Only one or two of the experts rise to the level of OffshoreInsiders.com stable of handicappers.
“I think Major League Baseball would have to take a long, hard look at it,” said Smrek, principal of Denver-based Adrenalin, a sports-consulting firm. “In one way or another, it needs to be addressed.”
Liberty’s agreement to acquire the Braves from Time Warner as part of an asset swap requires approval from 75 percent of major-league team owners.
Major League Baseball has long abhorred its teams’ having ties with gambling operations. MLB spokesman Rich ard Levin said Wednesday he couldn’t comment about what impact Liberty’s interest in DonBest might have on the approval process.
In response to an e-mail questioning DonBest’s operations and its potential impact on the Braves deal, Liberty spokesman John Orr wrote, “We have no comment.” DonBest is operated by Toronto-based Fun Technologies. Liberty paid $195 million last year for a 51 percent stake in Fun.
Described in a 2003 New York Times article as the “Bloomberg of sports betting,” DonBest charges users $600 a month for up-to-the- minute betting odds on games in every major sport, including baseball.
“It’s definitely the No. 1 sports-betting-line service online,” said gambling expert Ken Weitzner, president of EyeOnGambling.com. “There’s not even a close second; it’s that popular.”
Betting on major sports such as baseball in the United States is legal only at casino sports books in Las Vegas.
DonBest features betting lines from offshore sports books such as TheGreek.com and Sportsbook.com. The U.S. Department of Justice last year launched a major crackdown on online gambling, arresting executives of sites such as Bet OnSports.com while they traveled in the U.S.
It’s unclear whether DonBest, which hasn’t been targeted by the U.S. government, receives revenue from illegal sports-betting websites.
“Obviously, any direct ties with illegal gambling presents a problem for baseball,” said Levin, the MLB spokesman.
DonBest also offers picks from its sports experts that are guaranteed to make money for users or they don’t have to pay the fees, which range from $25 to $40 per package of daily picks.
Liberty shouldn’t have a problem divesting DonBest if it is asked to do so to get the Braves deal approved, Smrek said. “For them, this is a pretty small play,” he said.
Source: Denver Post

The waiting game for thousands of U.S. patrons with money tied up in an online payment service under federal investigation just got longer.
The U.S. Attorney’s Office for the Southern District of New York late Wednesday said it extended the deadline until March 16 to decide whether to indict the co-founders of Neteller, an Internet money-transfer service popular among gamblers. Stephen Lawrence and John Lefebvre were arrested in January on a charge of conspiracy to transfer funds with the intent to promote illegal gambling
For U.S. customers of the site, it was another delay in their efforts to recoup their money, which remains in Neteller accounts until the legal matter is resolved.
Neteller says U.S. authorities have frozen access to about $55 million in U.S.-based accounts.
“As a result of the restrictions placed by third parties, court-ordered seizures and related legal concerns, (Neteller) is unable to make payments to U.S. customers,” says a posting on the company’s website.
FBI agent Neil Donovan has said funds are being held in court as potential evidence. He did not provide a timetable on when customers may get their money back.
Though money-transfer companies such as Neteller do business with financial institutions and merchants, many also allow gambling companies to transfer money collected from U.S. gamblers to bank accounts outside the USA. Neteller last month closed its U.S. Internet gambling services, erasing about two-thirds of its business.
A law signed by President Bush in October bans the use of credit cards, checks and electronic fund transfers for Internet gaming. U.S. residents place more than half of all bets to major offshore casinos in an estimated $10.6 billion industry. However, most online gaming sites are based offshore, outside the reach of American law enforcement.
With Neteller’s financial future teetering in the balance, consumers might choose less reliable money-transfer services instead, says Ken Dreifach, an Internet attorney.
Source: USA Today

lacing bets and buying lottery tickets via a mobile phone is projected to grow into a $16.6 billion industry by 2011. Europe and Asia currently lead the way, but American carriers and lawmakers have been reluctant to climb on board. Could careful regulation and better age verification approaches give the U.S. a toehold on the market?
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Handheld computers have simplified many activities. Individuals can surf the Web, text message their friends, buy a new pair of pants, and, increasingly, try to hit the jackpot in the lottery.
Market research firm Juniper Research expects the worldwide mobile gambling market to grow from US$1.35 billion in 2006 to $16.6 billion by 2011 — and the increase is coming outside of the U.S., which currently prohibits the activity.
“The mobile channel will push gambling services out to a broader, lower stake market than existing channels, offering significant opportunities for market growth,” Bruce Gibson, research director at Juniper, told TechNewsWorld.
Convenient Casinos
Mobile gambling is rising because of the ubiquity of handheld devices as well as the convenience these devices offer. In 2006, the number of handheld devices sold worldwide passed the 1 billion mark, indicating a gigantic pool of potential users.
Mobile gambling functions rely largely on text messaging, which has become simple to use and quite popular. These features gel with the impulsive nature of playing games of chance and allow gamblers to go online and wager when they are sitting in a restaurant, waiting for a bus or even working at their desks.
These gamblers find a growing number of gambling outlets. Sports betting is currently the largest sector in mobile gambling, and fans now wager on a variety of professional leagues, with soccer being the most popular. Lotteries are the second most popular segment, but Juniper Research forecasts it will take the top spot by 2010 as related games, such as bingo, become more widely available. Casinos offer virtual games like poker, blackjack, roulette and craps, and they have also achieved wide popularity.
Europe, Asia Lead the Way
Gambling services attract a variety of customers, according to Gibson. “The typical mobile gambler will be [a] young, upwardly mobile professional with disposable income,” he said. While most gambling has been male oriented, the availability of games like bingo and skill games will attract more women and make it popular to both genders.
Mobile gambling enterprises started to evolve at the turn of the millennium and have become well established in certain areas. Europe has been a hotbed for mobile gambling, with Juniper Research estimating that users placed $665 million in bets there in 2006.
In the Netherlands, Sweden, Germany, Britain and Austria, mobile phones are regularly used to buy lottery tickets, bet on sporting events or enter sweepstakes for prizes. These services are also rapidly gaining ground in Asia. In fact, Juniper Research expects Asia to become the market’s largest segment, accounting for $6.7 billion by 2011.
Vendors have had to address various technical issues in order to spur market acceptance. Security is at the top of the list. After people dial in and enter their wagers, wireless e-mails are sent back asking them to confirm all the details.
Typically, winnings or losses are logged into an account the bettor has set up, and more authentication is required in order to make changes to the account. Content monitoring and filtering technologies enable cellular operators to monitor gambling traffic as it passes over their networks, and additional checks are in place in case of suspicious activity, such as unusually high numbers of bets.
Age Verification
Sequestering these services has been another concern. “Regulators want to make sure that young children do not take part in these services and then become gambling addicts,” Neil Strother, an industry analyst with market research firm The NPD Group, told TechNewsWorld.
Technological advances and new processes have been put in place to address this issue. Around the world, mobile network operators have imposed age verification procedures to ensure that users are old enough.
“Sometimes age verification is implemented by operators as part of a voluntary code of practice covering mobile content, such as in the UK,” Juniper’s Gibson noted. Many operators issue users PIN numbers to access special accounts, which are based on credit cards.
Because it is electronic and instantaneous, mobile gambling presents new logistical challenges, such as making sure that odds are fair. Betting equipment now includes software that determines dynamic odds, or odds that change as the betting process progresses.
Illegal Since 1934
Currently, the biggest inhibitor in the mobile gambling market has been a reluctance to offer these services in the U.S. In the summer of 2006, federal legislators put in place restrictions to keep mobile gambling illegal. U.S. regulators have been disinclined to embrace online gambling and are now thwarting mobile gambling as well.
The main problem is how the wagers are made — a 1934 law makes betting over a phone line illegal, and that law has halted gambling expansion in the online world.
This restriction has also made it more difficult for gambling companies to get paid. As part of its purchase of online bill payment service, for example, PayPal discontinued its online gaming business due to the uncertain legal status around online gaming. Financial service companies such as Citibank followed suit and no longer processes credit card payments from offshore gambling operations. Gibson sees this as a short-term rather than long-term problem and projects that North America will account for 6 percent of the mobile gambling market in 2011.
As the mobile gambling market takes shape, the question arises — how will it impact the current state of gambling?
“Initially, mobile gambling will be an additional channel for existing gamblers,” concluded Gibson. “In the longer term, the market will attract a significant number of new users as the inherent advantages of the mobile channel become apparent and as mobile gambling develops into a mass-market application.”
Source: E Commerce News